1. SIMG and DRAD: I recently discussed the earnings reports from these two lottery ticket purchases, and just wanted to add a few comments. The SIMG results for the second quarter did miss the consensus revenue forecast, and the guidance given by the company was below the consensus for the 3rd and 4th quarters. (item # 3: Earnings Reports: SIMG) It would be my opinion that its current market cap of the company at a $2.4 price, close to the net cash on its balance sheet, already reflects the Street's poor opinion of SIMG, its prospects, and a lot of bad news. As shown at YF, the analysts consensus revenue was 49.33 million and 50.28 million for the 3rd & 4th quarters, respectively. The company has guided to 44 to 46 million for both quarters.
The news on DRAD was far more positive. (see discussion at # 2 Digirad/). I would just add that the profit for the second quarter was driven by cost reductions. Revenues for the quarter did decline to 18.6 million from 19.9 million in the 2008 2nd quarter. The firm also posted a positive operating margin of 3.4, from a negative 7.1%. Over the past two trading days the stock has far exceeded it average trading volume of 66 thousand, hitting 494,257 on Friday. The percentage gain for those days was over 50%, moving from $1.22 close on Wednesday to a $1.89 price at the Friday close. This rise means the market cap has expanded to about 36 million which is more than the cash on the balance sheet. When I bought the stock as a Lottery Ticket in early June, the price was less than DRAD's cash on hand, and the firm's stocks was selling at a fraction of its book value and at a very low price to sales. Bought Lottery Ticket 100 DRAD I mentioned in that post that I would be happy for a double in five years. Maybe I will be rewarded with a double sooner. Though, I may allow my magic coin to make the hold or sell decision when and if it crosses $2. I certainly did better with this lottery ticket purchase than the $20 scratch off ticket that I bought today.
2. CIT Bonds: Most likely, I am going to take a hit on my 2 CIT bonds, the only question is how much. I discovered over the weekend that none of the 3 billion loan recently made to CIT at 13% or so interest could be used for the tender of the 1 billion in bonds maturing in August, unless 90% of the bonds are tendered in response to that offer. If that does not happen, then the odds of a bankruptcy filing in August would be the likely result, unless CIT could round up the money to pay off that maturing bond from other sources.
3. Using the Military to Arrest U.S. Citizens on U.S. Soil: Some may remember the Lackawanna Six, a group of six American citizens who were arrested by the FBI in Buffalo and later convicted after a jury trial of providing support to al-Qaeda. Cheney and W were not fans of jury trials, and all of that Anglo-Saxon non-sense which started with the Magna Carta, better just lock them up and throw away the key. The NYTimes.com has a story in its Saturday edition that Cheney, and the really scary Cheney acolyte in training, David Addington, wanted to use the U.S. military to arrest these U.S. citizens on U.S. soil, to incarcerate them indefinitely without a trial, in the same manner as they did with Jose Padilla. Bush and Cheney were relying on the legal opinion of John Yoo, who was willing to provide Cheney a legal opinion supporting the expansion of Presidential powers to enable such actions. I have maintained previously that Yoo's opinion would allow the President to line up citizens and fill them full of lead. There are always people who will be willing to give someone in power that kind of opinion. The only question is whether the President wants to enable that person, place them in a position in the Justice Department to render the desired opinion, and then rely on that opinion to justify virtually any action desired by the President. Yoo is what Bush and Cheney, and many in the GOP Tribe, call a conservative legal scholar. True conservatives, rather than those masquerading as such, particularly those with strong totalitarian tendencies and little if any regard for the Bill of Rights, would find the mere discussion of what Cheney wanted to do to be appalling. Torture and the Imperial Presidency: Why are those Conservative Values? NYT: Torture approved at the highest level/ Bush and Cheney did implement in other instances Yoo's tortured version of a constitutional Imperial Presidency by sanctioning the use of torture and other actions later struck down as unconstitutional by the Supreme Court. My point is simple, a John Yoo can always be found to provide cover to unrestrained exercises of executive power over the lives of citizens, in a manner inconsistent with the clear spirit and meaning of the Constitution. So, this will happen again, and next time they may not be anyone like the FBI Director Mueller to put the brakes on someone like a Cheney, Bush or Addington.
4. "Birthers": Birthers are the names given to those who are convinced that Obama is not a U.S. citizen. Egged on by their ringmaster, Clown-In-Chief, Rush Limbaugh and CNN's Rush imitator, Lou Dobbs, these individuals do not care that numerous independent third parties have examined Obama's birth certificate from Hawaii, embossed seal and all, and found it to be authentic, as discussed in this linked article in the NYT. I previously mentioned that representatives from the non-partican FactCheck.org were among those who authenticated the birth certificate.More Foolishness from the GOP in the Volunteer State/Buy FRPRK/ GLEN CASADA & OBAMA/ Ideologues Rarely See What is in Front of Them/ True Believers could care less about facts. Once a belief is formed without regard to any accurate information, any fact inconsistent with that belief is false, just that simple, and is being spread to the populace by the left wing conspiracy implemented by the mainstream media to deceive the public. This is a YouTube Video showing a congregation of the TBs confronting Rep. Mike Castle from Delaware who had the audacity to claim Obama was a U.S. citizen, rather than a citizen of Kenya. This is worth a view: YouTube - Mike Castle confronted over Obama's birth certificate
This is a link to Jon Stewart's take on the Berthers: Jon Stewart (this is a link to the Huffington Post that has the Stewart video, just need to click the arrow to start it)
Having said all of that, I wonder what worries me most. The TBs taking power again with someone like Sarah as Commander in Chief. Or, is it better to have an intelligent leader from the Democratic party who is intent on passing a trillion dollar new social program (probably twice that amount over just the next 10 years) at a time when nothing has been done to shore up the medicare and social security system for the baby boomers now starting to retire, and at a time when the nation will be running yearly budget deficits greater than the total U.S. debt from 1776 to 1980? It is just madness. And the Democrat health plan is being sold as a "cost saver" which is a hoot.
Almost 45 million Americans are now receiving Medicare benefits. This is about to accelerate big time. The trustees for Medicare currently estimate that the fund will be exhausted by 2017. http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2009.pdf
(see the chart a p. 213). This forecast of when the Medicare fund will be depleted keeps moving closer when a new forecast is made. It is estimated that Social Security will run out of money in 2037: Medicare Depleted By 2017 : NPR
Thanks so much for all your research and insightful commentary. Just a small request though: can you please use the correct word when referring to the Democratic Party? "Democrat" Party is a juvenile affectation of some in the Republican Party, and your use of it takes away from your otherwise stellar commentary.
ReplyDeleteI will change the usage. A Democrat is a member of the Democratic Party or an advocate of democratic principles. I looked it up in the dictionary. So if I understand the point correctly, which is always a question mark for someone who matriculated partly in the Alabama public schools, I incorrectly used the term "Democrat Party" in the sentence about desiring to pass a new social program. On the other hand, I will keep the reference to "Democrat" health plan, since that reference is more to members of the party rather than to the party itself. Tennessee has a several "blue dog" Democrats who are not as enthusiastic for the current plan offered by their more liberal colleagues, though more real cost cuts could swing someone like Jim Cooper (D) from Nashville.
ReplyDeleteSome of the GOP affectations are bound to rub off on me, though, since I am surrounded here in the SUV Capital of the World by members of the GOP tribe, with the largest number of SUVs with "W" decals still on the bumper, anywhere in the known universe.
"...the Democrat health plan is being sold as a "cost saver" which is a hoot."
ReplyDeleteI agree about the hoot, but you have to ask, cost saver for who?
For the manufacturing industries that are being crippled by the ever-rising costs of covering their employees' "health care" (using the term loosely, given the poor outcomes of the present American system)? Rising costs that are caused by drug prices and insurance premiums that are controlled by the pharmaceutical and insurance industries?
To me this is a turf war between two very large and powerful segments of the private sector, using government as a referee and shill.
Certainly whatever the outcome, it will not be a "cost saver" for you and me.
Cathie: I mentioned you to my brother this afternoon as some one who found my blog doing research on a Dutch insurance companies preferred stock and found his "spiritual" stuff more interesting, or whatever it is that he writes about in "AwakenToTruth".
ReplyDeleteFor me, since I have not had even a common cold in over a decade, I am presently contributing to the bottom line of BlueCross BlueShield with a 5 grand deductible, and have been doing so for many years now. Sort of like paying for insurance on my home since 1982 with no claims yet. While BlueCross is supposed to pay for a physical, my Doc, part of the Nashville Medical Group, coded my last visit as an office visit, rather than a physical which is what I had done. BlueCross refused to pay anything. After a couple of hours of trying to get the coding changed to a physical, I just gave up and paid the $180, as an easier, less frustrating way to deal with the "billing bureaucracy".
Some of the old manufacturing firms, like GM, will benefit from the Dem plan. Even some small businesses with less than 25 employees which already provide insurance could benefit with a tax credit for the premium. There are always winners and losers.
For as long as I can remember, two categories of cost have risen faster than the inflation rate every year, one is medical costs and the other is college tuition. The medical cost problem has many fathers. I would agree with the CBO analysis that nothing is being done now to contain the rise in those costs.
Private school college tuition is the other category that has proven resistance to cost increase containment. Someone paying full freight on tuition now to a private school like Northwestern or Vanderbilt would be paying around 35 grand, and around 50 grand all-in after the odds and ends. When Mike, my much older brother started Vanderbilt in 1964, tuition was $1,100 and had risen to $2,200 for my first year at Tulane in 1969, a double in five years.
The democrat plan will in my judgment accelerate, rather than contain, medical cost inflation, as substantially more demand is placed for medical services in a system already starting to show strains in dealing with current demand, let alone demand soon to be placed on it by aging baby boomers.