We all know that these better results are from cost cutting. It means people being fired, demotion (lower salary overall), less benefits, no more vacation paid if not used, etc.
So while the executives will see once again their bonus and perks getting higher because of better results, most employees are seeing the oppposite, and we are talking about thousands of people.
Reproduce this kind of process throughout corporate america and you can see the net impact: Wealthy executive getting richer, while most citizens (employees) getting nowhere or down, again.
Do you really think that the country as a whole can get out of this economic slump when most people, who are consumers, feel poorer?
And I am not talking about all the other things that are costing more like education, health care, etc.
In 2007, at the peak of the financial bubble, when most countries were in a frenzy housing construction bubble and China was growing at 12% its GDP, the price of copper reached a peak under $4/lbs
Now with most countries in the doldrums, China growth of GDP at 9.6%, the price of copper is way over $4/lbs. Does it make sense? The QE of our national bubble in chef Bernanke is creating another frenzy into commodities that will once again burst on taxpayers face.
If there is any money to be made with CHK, McClendon will be the one who will grab it.
Anyone looking at a chart of CHK since they began selling assets can see that the stock went down constantly, while Aubrey compensation went up.
McClendon and the directors have only one goal: Filling their wallet at the expense of shareholders.
He got into a big debt when he was on margin to buy CHK stock few years ago. Shareholders lost a bundle.
He got CHK into a humongous debt when he bought all shale acreage at highest price he could in the country. With NG at it's lowest price, shareholders are losing a bundle.
He got into a large loan with his reckless drilling interest. Shareholders are losing a bundle.
He got now into another big debt with Goldman, just to be able to gain some time to sell assets. Shareholders are poised to become losers again.
With that kind of serial debt gambler, shareholders can only lose on any deal that will come from him.
Every single day that the Aubrey leech stays at the helm of the sinking boat, the more money he can get from shareholders.
It's not by paying a higher price for new shares that investors will make money, it's by getting out while there is still some value at what they already own.
When the price of oil was climbing to $147, the pundits were saying that $200 was inevitable.
When the price of oil started its correction and went to $120 very fast, a new wave of pundits came to say that oil at $90 or $80 was inevitable.
When two days ago the price of oil went up somewhat, another wave of pundits said that the high price of oil was here to stay.
Today, the price of oil is down and another kind of pundits are saying that it is poised to go down.
Let me guess: When it is sunny, a pundit will say that the sun is poised to shine, and when it rains, another one will say that we are aimed to be wet.
Airlines increasing constantly their fees, Banks increasing their rates to credit card holders and fees to their customers, Healthcare HMOs increasing their fees to all customers, Oil companies increasing the price of gas to throught all their stations, Universities increasing their tuitions by thousands, etc.
But the FED is saying that there is almost no inflation. Certainly no inflation of intelligence at the FED, that is for sure.
You know we are in deep trouble when the stock market can go up only when there is a government intervention every month for six months.
How having to pay a dividend of 8% to new preferred shares will be helpful to common shareholders in coming months?
Citigroup was already losing money, this new bail out means they won't make any money for quarters and quarters to come.
When your true earnings go from $120M to $57M, over a three year period, while your debt jumped from $1M to $322M, you look more like a cheap hot dog than caviar.
More disturbing, the company said that their earnings from last year alone were not $40M but less than $9M ($31M overstatement): That makes $0.42/sh for the whole 2008. At current price of $12/sh that makes a whopping trailing P/E of 28.5
You like hot dogs? Good, then buy and eat as much as you want, but don't expect that this hot dog will produce anything but more cholesterol and fat around your belly and at $12 each hot dog, smart gourmet don't pay that much.
These investors own 8M shares so if BCE gives $10/sh as dividend they receive $80M, but why would BCE accept such a strange deal and drain their cash?
Is this another creative financial weapon of mass destruction?
Last quarter was only the beginning of the significant decrease in drilling for natural gas. CRR saw a drop of revenue of around $10M, not that big.
But the problem is by how much it will continue in that trend, or will they compensate enough with oil to stabilize their revenue. Usually investors don't like the complete unknown.
Some investors look at the drop from $182/sh to $87/sh and says wow, more than 50% drop. On the other hand they seem to forget that even at $87, it is still 300% higher than what it was 2 and half years ago ($25).
As long as we won't know the real impact of low natural gas price and the movement to oil for drillers, the CRR stock price could very well stay between $80 and $90 for a while.
Why each time a CEO appears on TV, like DOW's CEO did last fall, it is a sure sign of big troubles coming.
The guy last fall that the company had paid a dividend for decades and it won't be under his tenure that it will change. Well, guess what humble man, you will have to swallow that dividend stance because your cash is dwindling and you have lot of debt.
Never believe a CEO, in particular when they show their ugly face on TV for the first time in years to pump their next coming flat tire.
And he is right.
Only idiots would believe him when he says that his staff didn't understand the risk they were taking. It's like saying that a driver speeding at over 120MPH with his car, and crashing, was not aware of the danger of his behavior. Give me a break.
If the FED could stop feeding these saprophytes at the savors'expense with such low interest rates they would starve to death, because they don't know how to work for a living.
Two CEOs change in Alliance in recent weeks spooked many investors. The main one at Alliance and the other one at what was their growth division, Epsilon. And it was done in a very behind-the-curtain fashion in both cases.
Are we really in the biggest credit bubble in decades? Not by looking at BIDU.
When something floats like a bubble, is clear like a bubble and is empty like a bubble, it must be a bubble ready to pop any time.
Plus all litigation fees that will run into millions $, for a company that has a very low cash amount available and more than $500M in debt.
Life will be tough for months to come for shareholders who want to hold on.
"In the last three years, total compensation for all of Chesapeake's directors was valued at $13.3 million. That is far above peers Devon Energy Corp's $4.5 million and EOG Resources Inc's $7.5 million, according to data compiled by Reuters."
Yes Aubrey, whatever you want Aubrey, a coffee with that Aubrey?
He is wondering why the unemployment stays high after all that money he injected into the system for months.
Can't he see that all that money goes into loans at peanut rates to finance mergers and acquisitions, commodity speculation, share buybacks, increased dividends, etc., and that none of those things create jobs?
Churning money between wealthy people, that is the only role of the FED in the last several years.
The two biggest banks in the country, BAC and CITI are in deep trouble, this is very reassuring.
In the same situation, the three main auto manufacturers, GM, Chrysler and Ford.
Also, to make sure that we can all sleep well, the two biggest mortgage holders, Freddy and Fanny, are also in deep trouble.
I won't speak about AIG, what was the biggest insurance company until last year.
And to make sure that we won't have any nightmare, the government's debt keeps rising while the problems are still not resolved.
See you all tomorrow after a very good night sleep.