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Posts Tagged ‘automotive industry’

NoQuarter Radio’s Sense on Cents with Larry Doyle Tonight at 8PM

Posted by Larry Doyle on May 3rd, 2009 7:38 AM |

UPDATE: The show has concluded, but you can listen to a recording of it in its entirety by clicking the Play button on the audio player below. Once the playback has started, you can fast forward or rewind to any portion of the show by clicking at any point along the play bar. Topics this evening included: the Chrysler bankruptcy situation, Bank Stress Tests, and Auction Rate Securities.



Please join me Sunday evening from 8-9 p.m. ET for NoQuarter Radio’s Sense on Cents with Larry Doyle. The developments in the markets, economy, global finance, Wall Street, and Washington are occurring at breakneck speed. I will try to slow things down a bit and provide a sense of perspective. What did we learn in the markets over the last week and what does that mean for the weeks and months ahead? We will address a wide range of issues, including: the auto industry, government bond market, and economic statistics.

These are truly historic times in the global economy. Let’s “navigate the economic landscape” without the pandering or nonsense found elsewhere! What is on your mind? What would you like to address? Please share your questions and thoughts by calling in to (347) 677-0792, and also join our live chat room, which I’ll start up about 10 minutes before the show begins.

Many thanks to Larry Johnson and the rest of the team at NoQuarterUSA blog for providing such a vibrant vehicle as NoQuarter Radio. I look forward to having you join me Sunday evening as we collectively navigate the economic landscape!!


Is The Economy Turning The Corner?

Posted by Larry Doyle on April 21st, 2009 7:05 AM |

Markets correct by price (both up and down) and time (extended). Despite the 3+% price declines in equity markets yesterday, the markets are up approximately 20% since the market lows seen on March 6th. Some analysts believe this upward move signals an improvement in the economy largely due to the fiscal and monetary stimulus provided by Uncle Sam. I am not in that camp.

A few emerging economies, specifically China, have improved. Can the rest of the world, including the U.S., expect those economies to be the engine for a global turnaround at this juncture? I do not think so. I still see the following issues on our domestic horizon:

1. continued deterioration in loan performance on bank books

2. a banking system woefully capital deficient

3. an automotive industry which must downsize

4. municipalities which are faced with the predicamant of capital shortfalls and underfunded pensions

5. commercial real estate just starting to experience real defaults

6. a housing market with increased foreclosures pressuring prices

7. an unemployment rate clearly headed toward double digits

Earnings reports for the first quarter have been mixed. I view the recently reported bank earnings as largely “managed” via accounting gimmicks. Meredith Whitney believes the earnings for major money center banks will turn negative in the 2nd quarter. The regional banks, without the benefit of large capital market activities but facing credit writedowns, report earnings today. Key Corp just reported a loss of $1.09 eps (earnings per share) versus an estimate of -.21. I suspect we will see losses from other regional banks of a similar magnitude. (more…)

How Many Investment Bankers and Campaign Aides Does It Take to Turn a Lug Wrench?

Posted by Larry Doyle on March 26th, 2009 5:16 PM |

In light of the hundreds of billions of dollars allocated to the financial sector, I never thought for a second that Washington would not bail out Detroit. While details are being finalized, rest assured there will be tens of billions of dollars injected into the automotive industry.

The question regarding the automotive industry’s viability has always revolved around the level of annual sales. These sales had run at an annual rate of 16 million during the “good” years. Sales in 2009 are now projected in the 8-9 million range. How much does the industry need to downsize and what rate of sales are necessary in order to breakeven? Will the capital injected be the proverbial “good money after bad?”

There are so many variables in the automotive equation (rate of sales, merger possibilities, debt covenants, union and pension obligations, dealerships, autoparts suppliers) as to make the entire equation untenable. (more…)

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