Saturday, April 7, 2018
On this day in 1862,
Battle of Shiloh Ends With Union Victory
The Bloodiest Battle of the Civil War to date but with far worse to come.
On this day in 1954,
Republican President Eisenhower Argues Domino Theory For Southeast Asia
Predicts communist domination will lead to "incalculable losses to the free world."
The calculable deaths of American boys in Vietnam turned out to be about 58,000.Friday, April 6, 2018
Thursday, April 5, 2018
Wednesday, April 4, 2018
Sharyl Attkisson's Conditions for Trump Interview with Mueller
(Compiled from several Tweets)Re: Trump interview w/special counsel, perhaps all can agree it should be under same terms @TheJusticeDept gave Hillary Clinton:
1. An exoneration letter is drafted in advance.
2. Immunity is given to top Trump aides (and they’re allowed to sit in on interview). (Continued)
3. Interview isn’t recorded.
4. Lead official (Mueller) doesn’t attend.
5. #2 official’s family has received large donations from Trump political friends.
6. Prior to the interview, lead official meets privately on plane tarmac with Trump's wife (to discuss grandchildren).
7. Main interviewer has expressed disdain for Trump’s opponents, such as discussing an “insurance plan” with higher-ups to undermine them. If the same terms aren’t offered...Was Clinton’s interview process unfair? Or is the one proposed for Trump unfair? #FairIsFair
8. As long as they believe Trump didn't intend any harm, he's let off the hook for any violations.
9. If Trump becomes a target, it should be referred to as a "matter" not an investigation.
10. Trump aides should be permitted to destroy subpoenaed or relevant public records and wipe relevant servers with a cloth or something.
On this day in 2016, on Masters Wednesday:
ARNIE'S LAST INTERVIEW
On this day two years ago Arnold Palmer gave his last interview. At Augusta National. Masters Wednesday. Well worth the time. His almost last words: "This is it."
http://www.masters.com/en_US/watch/2017-04-09/49cd0d2-00c0fa51738.html?promo
On this day in 1865,
LINCOLN DREAMS OF HIS ASSASSINATION
On this night in 1865, Abraham Lincoln dreamt of “the subdued sobs of mourners” and a corpse lying on a catafalque in the White House East Room. In the dream, Lincoln asked a soldier standing guard, “Who is dead in the White House?” to which the soldier replied, “the President . . . he was killed by an assassin.” Lincoln woke up at that point. On April 11, he told one of his best friends that the dream had “strangely annoyed” him ever since.
Ten days after having the dream, Lincoln was shot in the head and killed by John Wilkes Booth at the Ford Theater.
On this day 50 years ago
MARTIN LUTHER KING, JR.
SHOT AND KILLED
On this day in 1968, the Rev. Martin Luther King, Jr. was shot in the head and killed while standing on the balcony outside his room at the Lorraine Motel in Memphis. Just the day before King had given his last sermon saying, “We’ve got some difficult days ahead. But it really doesn’t matter with me now, because I’ve been to the mountaintop . . . And He’s allowed me to go up to the mountain. And I’ve looked over, and I’ve seen the Promised Land. I may not get there with you. But I want you to know tonight that we, as a people, will get to the promised land.”
Two months later Bobby Kennedy would be shot in the head and killed while campaigning for president in Los Angeles.
Tuesday, April 3, 2018
The man who presaged Trumpism,
Pat Buchanan: Trump's Presidency will be judged not on out-of-date Republican values but on Trumpian agenda
Monday, April 2, 2018
Grant's Almost Daily Interest Rate Observer
The bond market, of course, features a different calculus. Instead of the potential for outsize returns available to stockholders, the measure of success for corporate creditors is the return of their capital, along with contractual interest payments. Necessarily limited upside trains the investor mind on what can go wrong. For par value bond investors, risk aversion is the name of the game.
The dual cases of Netflix and Tesla put those logical truisms to the test. In October, Netflix issued $1.6 billion of senior unsecured notes maturing in 2028 with a 4 7/8% coupon, a spread of 256 basis points over Treasurys. Rated single-B-plus at S&P (“the obligor currently has the capacity to meet its financial commitments on the obligation”), Netflix has achieved rapid growth and stock market riches via the incineration of cash: Free cash flow registered negative $2.02 billion in 2017, while management pegged its 2018 FCF estimate at negative $3 to $4 billion, well above the Street consensus of $2.5 billion. As the company’s borrowing needs will likely increase, CEO Reed Hastings has struck a sanguine tone, writing in the fourth quarter investor letter that: “High yield has rarely seen an equity cushion so thick.”
The Jan. 26, 2018 edition of Grant’s (“Like no business”) condensed the separate propositions implicit across Netflix’s capital structure: “It’s a speculative business, the content business, but if it works out, you, the creditors will get your money back. The stockholders get rich. Everybody’s happy.” Those 4 7/8 notes have trended the wrong way of late, breaking lower to currently fetch 96.5 cents on the dollar from 99.9 in January.
The there’s Tesla, which burned through $3.5 billion in cash last year on just under $12 billion in revenue yet enjoys a massive valuation premium to other automakers. It issued $1.8 billion (upsized from $1.5 billion) in senior unsecured notes due in 2025 at a 5.30% coupon (a 320 basis point spread over Treasurys) in August. That was up from an indicated yield of 5.25%. Reuters quoted an anonymous banker who said that the five basis point bump “was a company decision to ‘sweeten the deal’ for investors who supported the transaction.”
The bond issue, which made its first coupon payment in February, has seen its price fall sharply in recent weeks amid product recalls, another highway death of a driver who was using the “Autopilot” feature, and CEO Elon Musk’s odd April Fool’s Day jokes declaring corporate bankruptcy on Twitter. Last week, Moody’s downgraded Tesla’s rating to B3 from B2 and the rating on the 5.3% senior notes to Caa1 (“judged to be of poor standing and are subject to very high credit risk”) from B3, while the notes have fallen to 86.5 cents on the dollar for a yield to worst of 7.73%..
The Aug. 11 publication of Grant’s (“’A masterly manipulation’”) took inventory of the bond market’s accommodative stance to the offering while Tesla was conducting its investor road show, drawing a parallel with UK Chancellor of the Exchequer David Lloyd George’s exertions in support of the 3.5% War Loan of 1924. The analysis noted that operating and financial problems aside, Tesla was an issuer in the right place at the right time.
With $9 billion in high-yield sales, July was the weakest month of issuance since January 2016. “There hasn’t been much new supply and investors have cash they need to spend,” a resigned Tom O’Reilly, Neuberger Berman Group, LLC’s head of non-investment grade credit, tells the Wall Street Journal.
Time flies when you’re having fun. We can surmise the corollary: For Tesla and Netflix’s creditors, 2025 and 2028 may seem far away indeed.
Are Netflix and Tesla Worth the Risk?
Dear Mr. Fantasy
Who’s up for some reward-free risk? In recent years, investors with a high risk tolerance have gravitated to shares in fast growing but cash-hungry Silicon Valley concerns Netflix, Inc. and Tesla, Inc., with terrific results: The pair has delivered exponential returns over the past five years, as popular products and cultural cachet have trumped financial statements that could be described as less than stellar. The potential for further such reward colors the evident risks.The bond market, of course, features a different calculus. Instead of the potential for outsize returns available to stockholders, the measure of success for corporate creditors is the return of their capital, along with contractual interest payments. Necessarily limited upside trains the investor mind on what can go wrong. For par value bond investors, risk aversion is the name of the game.
The dual cases of Netflix and Tesla put those logical truisms to the test. In October, Netflix issued $1.6 billion of senior unsecured notes maturing in 2028 with a 4 7/8% coupon, a spread of 256 basis points over Treasurys. Rated single-B-plus at S&P (“the obligor currently has the capacity to meet its financial commitments on the obligation”), Netflix has achieved rapid growth and stock market riches via the incineration of cash: Free cash flow registered negative $2.02 billion in 2017, while management pegged its 2018 FCF estimate at negative $3 to $4 billion, well above the Street consensus of $2.5 billion. As the company’s borrowing needs will likely increase, CEO Reed Hastings has struck a sanguine tone, writing in the fourth quarter investor letter that: “High yield has rarely seen an equity cushion so thick.”
The Jan. 26, 2018 edition of Grant’s (“Like no business”) condensed the separate propositions implicit across Netflix’s capital structure: “It’s a speculative business, the content business, but if it works out, you, the creditors will get your money back. The stockholders get rich. Everybody’s happy.” Those 4 7/8 notes have trended the wrong way of late, breaking lower to currently fetch 96.5 cents on the dollar from 99.9 in January.
The there’s Tesla, which burned through $3.5 billion in cash last year on just under $12 billion in revenue yet enjoys a massive valuation premium to other automakers. It issued $1.8 billion (upsized from $1.5 billion) in senior unsecured notes due in 2025 at a 5.30% coupon (a 320 basis point spread over Treasurys) in August. That was up from an indicated yield of 5.25%. Reuters quoted an anonymous banker who said that the five basis point bump “was a company decision to ‘sweeten the deal’ for investors who supported the transaction.”
The bond issue, which made its first coupon payment in February, has seen its price fall sharply in recent weeks amid product recalls, another highway death of a driver who was using the “Autopilot” feature, and CEO Elon Musk’s odd April Fool’s Day jokes declaring corporate bankruptcy on Twitter. Last week, Moody’s downgraded Tesla’s rating to B3 from B2 and the rating on the 5.3% senior notes to Caa1 (“judged to be of poor standing and are subject to very high credit risk”) from B3, while the notes have fallen to 86.5 cents on the dollar for a yield to worst of 7.73%..
The Aug. 11 publication of Grant’s (“’A masterly manipulation’”) took inventory of the bond market’s accommodative stance to the offering while Tesla was conducting its investor road show, drawing a parallel with UK Chancellor of the Exchequer David Lloyd George’s exertions in support of the 3.5% War Loan of 1924. The analysis noted that operating and financial problems aside, Tesla was an issuer in the right place at the right time.
With $9 billion in high-yield sales, July was the weakest month of issuance since January 2016. “There hasn’t been much new supply and investors have cash they need to spend,” a resigned Tom O’Reilly, Neuberger Berman Group, LLC’s head of non-investment grade credit, tells the Wall Street Journal.
Time flies when you’re having fun. We can surmise the corollary: For Tesla and Netflix’s creditors, 2025 and 2028 may seem far away indeed.
Poll: 77 Percent Believe Traditional Media Guilty of Fake News
Wouldn't you like to know who the other 23% are?Sunday, April 1, 2018
Subscribe to:
Posts (Atom)