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Caterpillar Inc. Message Board

richoncat 38 posts  |  Last Activity: Dec 18, 2014 6:06 PM Member since: Nov 24, 2006
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  • Reply to

    The Feds Conundrum

    by richoncat Dec 17, 2014 5:37 PM
    richoncat richoncat Dec 18, 2014 6:06 PM Flag

    Thumbs up. I'll buy that logic. My initial question is however does the FED move at all if the rest of the world is still stuck in the mud? My point about the 8 meetings next year is simply to point out they'll have to move in bigger steps the longer they wait or they'll be well behind the curve. I don't think you'll see any dampening of the economy until they get to 3-5%. That's a lot of small increments for fewer big ones. Duh!

    Sentiment: Hold

  • richoncat richoncat Dec 18, 2014 12:16 PM Flag

    Huh? CAT got out of the on highway Truck engine business years ago. They announced in 2008 that they wouldn't produce a '10 compliant engine. How is that relevant now? They never made any money on those engines they sold to Freightliner and Peterbuilt anyway. Cummins and Volvo own that business now. Mining in Asia and Latin America are still the weak areas. Europe starting to show some life. North America is carrying the load.

    Sentiment: Hold

  • Reply to

    The Feds Conundrum

    by richoncat Dec 17, 2014 5:37 PM
    richoncat richoncat Dec 18, 2014 8:55 AM Flag

    I agree that the Fed is usually behind the curve when it comes to raising rates. But at what level do interest rates start to actually quell inflation? If they were to start in January with a 0.5% increase and matched that in the 8 meetings scheduled through next year, that would leave us at 4.0% at year end. I don't expect them to start that early nor do I expect them to raise rates at every meeting. If they did and we get to 4%, that's still a historically low rate. So we're well into '16 before the Fed actions become effective. Maybe they'll delay any action and then hit the brakes hard with 1-2% increases per meeting mid year. If they do that I'd expect and nasty reaction in the market. Interesting dilemma.

    Sentiment: Hold

  • richoncat by richoncat Dec 17, 2014 5:37 PM Flag

    Finally something interesting about the Fed's long held low interest rate issue. Now they have to wrestle with the conditions in which the US economy is continuing to gain serious momentum and the Fed's classical response would be to start cautiously raising interest rates to keep the threat of higher inflation in check. But, they're faced with recessionary conditions in Europe and Japan, stagnant growth in China and the implosion of counties with oil based economies. If the Fed raises rates does it make it more difficult for the weaker economies to recover, thus suppressing US growth as well? If they postpone rate increases do they run the risk of higher than desirable inflation? Oh my, what is a Fed governor to do. It'll be interesting to watch this play out over the next couple years.

    Sentiment: Hold

  • Reply to

    Shorted Caterpillar

    by rjjones11 Nov 1, 2014 6:47 AM
    richoncat richoncat Dec 10, 2014 5:59 PM Flag

    Got to give Mr. RJ Jones his props. I sure didn't expect to see these options in the money before expiration. I encouraged him to close his position before it expired worthless. I hope he stuck to his guns. These are worth $2.71 tonight. Not a bad return in 7 weeks. Well done Mr. Jones.

    Sentiment: Hold

  • Reply to

    kmp

    by dburger32 Dec 3, 2014 1:31 PM
    richoncat richoncat Dec 3, 2014 8:54 PM Flag

    Are you aware you' probably have a sizable tax obligation on the transaction?

    Sentiment: Hold

  • Reply to

    kmp

    by dburger32 Dec 3, 2014 1:31 PM
    richoncat richoncat Dec 3, 2014 4:49 PM Flag

    I got exactly 2.1931 shares and $10.77 cash per share of KMP. I had 1550 shares of KMP and received 3399 KMI and $16693.50 plus $12.70 for the 0.305 fractional shares remaining. The math works out perfectly. I wonder how they figured who would get less shares? Maybe first come first served. You might want to recheck your math. I'd be surprised if you got more shares and less cash than advertised.

    Sentiment: Hold

  • Reply to

    Our new shares of KMI have appeared.........

    by azgrannym Dec 1, 2014 1:20 PM
    richoncat richoncat Dec 2, 2014 3:41 PM Flag

    I stand corrected. There is an article on Seeking Alpha that addresses the KMR to KMI transaction.

    "There does not appear to be any changes in the tax effect on Kinder Morgan Management (NYSE:KMR) nor on Kinder Morgan, Inc. (NYSE:KMI) with one exception. There is a requirement that prior to KMR's merger that KMI receive an opinion of counsel that the KMR merger will qualify as a reorganization under Section 368A of the IRC and thus be tax-free to KMR shareholders. Section 368 has five criteria for determining if a reorganization is tax free. (Note: I personally don't see a problem in complying.) Thus there is a only a very slight chance that the KMR merger wouldn't be tax free. Since this will be known before the merger I assume an adjustment in the exchange rate would be made. Also, only full shares of KMR will be exchanged for KMI shares and thus any cash received for fractional shares held would result in capital gain."

    You are correct.

    Sentiment: Hold

  • Reply to

    Our new shares of KMI have appeared.........

    by azgrannym Dec 1, 2014 1:20 PM
    richoncat richoncat Dec 2, 2014 3:37 PM Flag

    My bad. I missed the reference to KMR, I assumed it was KMP. But I think there will still be some tax implication of surrendering your KMR shares. I'm not tax expert but I don't see how it will be a tax free event unless the shares were held in a Roth IRA.

    Sentiment: Hold

  • Reply to

    Our new shares of KMI have appeared.........

    by azgrannym Dec 1, 2014 1:20 PM
    richoncat richoncat Dec 2, 2014 3:10 PM Flag

    You're going to need the cash to pay the taxes on the transaction. Be prepared for a surprise at tax time. Fractional shares will be the least of your problems.

    Sentiment: Hold

  • Reply to

    KMi

    by donnak138 Nov 29, 2014 6:46 PM
    richoncat richoncat Dec 1, 2014 9:15 AM Flag

    I don't think this is the correct answer. The KMP transaction will stand wholly on it's own. Kinder Morgan should send you a K-1 early next year just like they have in the past. Only this one will show you selling the KMP shares. It will handle all the distributions you've taken over the past years and likely leave you with a fairly significant tax bill. That's the reason there was a hybrid, stock and cash, option for the merger proceeds. The cash was intended to cover some of the tax bill KMP holders will face. Thank you very much Rich Kinder. Your cost bases for the newly distributed KMI shares will be $42.32 as epholder detailed above. Consult your tax accountant for further advice.

    Sentiment: Hold

  • Reply to

    What just happened ?

    by beethovenspint Nov 28, 2014 2:08 PM
    richoncat richoncat Nov 28, 2014 5:08 PM Flag

    Thanks. The CAT board is s**t. I've held KMP for several years.

    Sentiment: Hold

  • Reply to

    What just happened ?

    by beethovenspint Nov 28, 2014 2:08 PM
    richoncat richoncat Nov 28, 2014 4:17 PM Flag

    It's just an accounting exercise. You have full legal ownership of 1096 shares of KMI. They're yours relax.

    Sentiment: Hold

  • richoncat by richoncat Nov 28, 2014 1:37 PM Flag

    It'll be interesting to see what happens Monday. Obviously just second lieutenants in the chairs today with no authority to buy anything. The Boss Man will be back from holiday Monday. We'll have to be patient and see what happens.

    Sentiment: Hold

  • Reply to

    Bids will disappear on all stocks

    by againscammed Nov 28, 2014 12:57 PM
    richoncat richoncat Nov 28, 2014 1:31 PM Flag

    Sorry "Imagine..."

    Sentiment: Hold

  • Reply to

    Bids will disappear on all stocks

    by againscammed Nov 28, 2014 12:57 PM
    richoncat richoncat Nov 28, 2014 1:30 PM Flag

    Another nutcase visits our board. Image all the businesses in the S&P 500 being worthless. No sales, no profits, no employees. The Great Plains reverts to prairies. Chicago is a swamp. Manhattan is sold back to the Indians for $22 in trinkets. California drops off into the ocean. Texas is handed back to Mexico. Don't laugh it could happen. Right.

    Sentiment: Hold

  • Reply to

    John Deere Warns !!!!!!

    by kored35 Nov 26, 2014 12:21 PM
    richoncat richoncat Nov 26, 2014 12:59 PM Flag

    Deere reported better-than-expected earnings and revenue for its fiscal fourth quarter. But the farm and construction equipment giant's shares were down sharply early Wednesday after it reported a slowdown in the U.S. farm economy and Q1 guidance was well below Wall Street views. The company said its construction and forestry gear sales were holding up well.

    So why would this affect CAT? They don't sell farm equipment and Deere said construction is holding up well.

    Sounds like another Chicken Little moment.

    Sentiment: Hold

  • richoncat richoncat Nov 25, 2014 3:40 PM Flag

    Patience grasshopper.

    Sentiment: Hold

  • Reply to

    Would a CAT and FDML merger make sense?

    by jpaulgettytoo Nov 25, 2014 2:25 PM
    richoncat richoncat Nov 25, 2014 2:48 PM Flag

    CAT would have no interest in getting into the automotive parts supply business. However, they might consider selling some of their components business to FDML. I personally think that would be a big mistake. They got out of the axial piston pump business years ago and lived to regret that move. High pressure, heavy duty pumps are a wear out item. CAT basically gave that business away to Rexroth and it didn't take the market long to figure out they could get replacement pumps and parts from Rexroth distributors. There is significant revenue and profit in the replacement parts business. CAT would be wise to learn from that lesson and keep as much of the differentiated components business as they can.

    Sentiment: Hold

  • Reply to

    Wait for pullback to 95.00

    by melodias23 Nov 24, 2014 12:23 PM
    richoncat richoncat Nov 24, 2014 1:18 PM Flag

    I'd mortgage my house at $9.0

    Sentiment: Hold

CAT
91.71+0.74(+0.81%)Dec 19 4:01 PMEST

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