“General Motors Corp., the biggest U.S. automaker, said it still has enough liquidity through 2008.” And then what?
If you say you have enough liquidity through the end of the year, you don’t have enough liquidity.
Recommendation: What’s good for GM (subprime loans, CLOs, etc.), is not good for the country.
You know, the usual: supreme power, undue influence over others, world domination.
-David Harding of Winton Capital Management when asked about what drives him in Traderdaily
This report on seals has us further concerned about the prospects of the entire species.
After 45 minutes the seal gave up, swam into the water and then completely ignored the bird it had just assaulted, the scientists report.
Walruses are models of efficiency. Can you see a walrus ignoring a bird it assaulted? Or do you think he’d make sure the assault was properly finished and the bird either consumed or appropriately stored for later consumption at his Balrus pad?
But the scientists who photographed the event speculate that it was the behaviour of a frustrated, sexually inexperienced young male seal.
Again, a walrus is a model of efficiency. Can you see a walrus doing this, or more apt, a walrus not getting his balrussing on regardless of his experience level? When your species specializes in getting it done, there is never any frustration. There are also no excuses. This is the code they live by.
Recommendation: There is a reason that the movie Andre sucked, and it wasn’t due to the all-star human cast, or the incredible cinematography or the director who shares the same name of the director of Mad Max, but is not actually the director of Mad Max. Hell, you can’t even blame Maine (in this case). No, the problem with that movie was that it wasn’t called Rufus, and wasn’t centered around a walrus with the same name. That movie would have won critical acclaim and probably been so good that just having seen it would get you laid. Additionally, we can’t see seals being a credible species in the context of Global Squidding. Short the seal.
HT to girl
In February, we pointed out Steve Wynn’s colorful and frank commentary on his company’s quarterly call. Today, we follow up with more from the CEO of Wynn (Nadaq: WYNN).
First, if you recall, Wynn issued $660mm of shares at $154 at the end of September after his stock had doubled in 6 months. Explaining his reasoning, he said at the time:
“No company gets to be worth twice as much in 60 days as it was before to any intelligent person, so when that happens, we take advantage of it.”
Smart. Now, one quarter later Wynn has repurchased 2.4 million shares. As he said on this quarter’s call:
“Look, we issued 4.4 million shares for 660 million and promptly distributed it, which was really nice for us shareholders. And a return of capital. We have now bought back at 50 or $60 a share [cheaper] those shares that we issued.”
Translation: You were idiots to buy my shares at $154. But I appreciate you selling them back to me at $95. Thank you.
Additionally, while most companies talk up their own business and exaggerate the prospects and profitability of the business, Wynn opts for honesty.
We report and talk about these EBITDA numbers with our chest puffed out as far as we can get it as an industry. I suppose it tells you how much money you can afford to pay in interest. But the public needs to understand that the profitability, the real profitability of these businesses are much, much less than these puffy EBITDA numbers. Interest expense is very large. And depreciation, I know office building guys and shopping center guys and apartment guys, they get to spend part of the depreciation. But, believe me, in my 40-year history and in the history of every other gaming company here, Kerkorian would agree with me. We spend depreciation. It is a real expense. And when you take the profitability of a hotel like the Venetian or Wynn or Bellagio or any of us it’s a much smaller number when you subtract depreciation and interest. And amortization. We have to pay back the people who lend us the money eventually. It’s a much smaller number. But I know the Wall Street folks, you all like to talk about EBITDA.
Translation: I don’t understand why you think my capital intensive company should be valued on metrics that exclude any measurement of capital intensity. I would use a different approach than you muppets, but then again, your approach is lining my pocket and I will restrict letting you know this explicitly such that no one will pick up on it except those who can parse my words with some kind of proprietary translation algorithm for corporate speak.
I think that a man should not live beyond the age when he begins to deteriorate, when the flame that lighted the brightest moment of his life has weakened.
-Fidel Castro
When America had the desire to prop up corn prices a need for cheap sugar what did it do? Make sugar out of corn.
When America had the desire to prop up corn prices a need for an alternative source for cheap liquid gasoline? Make gasoline (ethanol) out of corn (and out of pigs via piganol).
Now America has a floundering real estate market and the need for cheap domestic financing to prop it up. What should she do? Make mortgages out of corn. Turn what is plentiful into what is scarce. Simple.
Corngages can be produced by converting corn into cheap financing by a special process invented by Orville Redenbanker. The best part is that it is a green friendly and renewable source of mortgages, an important point in a world where sustainability is stepping to the forefront. While there are some side effects (including but not limited to: a large amount of emissions which melt the ozone and an increased price of corn, which means an increased price of everything for which corn is an input or a substitute), they can be “offset” by employing other corn products such as cornbon-offset and corn price deflators.
Recommendation: We recommend being long corn, long real estate and long any problem which can be solved by corn, which as far as we can determine is EVERY problem.
