FeedPosted Jul 12th 2010 5:00PM by Connie Madon (RSS feed)
Filed under: Bad News, Management, Market Matters, Economic Data, Small Business, Federal Reserve, Financial Crisis
The lifeblood of business is credit. Unfortunately, the credit available has been shrinking instead of growing. As of June 30, U.S. commercial and industrial loans held by banks have declined to $1.24 trillion from $1.6 trillion in 2008
Ben Bernanke, Fed chairman cites that credit creation as the key to economic growth. He has prodded banks consistently to lend more. Banks, instead of loosing up. are making it harder for small businesses to get credit. Even those with a good credit rating are finding it hard to get loans. Bernanke stated: "Making credit accessible to sound small businesses is crucial to our economic recovery and so should be front and center among our current policy challenges." Again speaking to lenders he stated: "Our message is clear. Consistent with maintaining appropriately prudent standards, lenders should do all they can to meet the needs of creditworthy borrowers."
Continue reading Bernanke Cites a Persistent Problem: Small Businesses Can't Get Loans
Posted Jun 22nd 2010 3:00PM by Sheldon Liber (RSS feed)
Filed under: Management, General Electric (GE), Berkshire Hathaway (BRK.A), Brazil, Goldman Sachs Group (GS), Mexico, Canada, Serious Money, Israel

There are many places that Warren Buffett may choose to invest Berkshire Hathaway (
BRK.A /
BRK.B) capital. At the same time you can be sure there are places he will not set foot. It is not likely he will invest anywhere that does not have a vibrant, well-established stock market with a stable government. So, Mr. Hugo Chavez in Venezuela will not likely see any capital deployed from the likes of
"my pal Warren" any time soon.
As a matter of fact, I would put the chances at slim of any South American country, besides Brazil, getting a look at all. Brazil is just too big and too vibrant to ignore. I would rule out Africa entirely except for indirect investments in oil and minerals through large conglomerates. The closest thing in the region would be Israel, at the furthest western reaches of Asia. He has already invested there and there is a high probability he would again. Investors from most of Europe and Asia have done the same, although many would rather not discuss it.
He has also invested in China, Great Britain, South Korea, and Switzerland. I would expect more money to be plowed into all of them again without reservation if the right deal materialized.
Continue reading Serious Money: Buffett Looking Beyond Our Borders -- Part 3
Posted Jun 16th 2010 6:00PM by Sheldon Liber (RSS feed)
Filed under: International Markets, Management, Coca-Cola (KO), Home Depot (HD), Berkshire Hathaway (BRK.A), Johnson and Johnson (JNJ), American Express (AXP), Lowe's Cos (LOW), PetroChina Co Ltd ADR (PTR), Entrepreneurs, Wells Fargo (WFC), Israel

Stories are starting to appear that
"my pal Warren" is gearing up for a major foreign acquisition. One of my dear friends Randy S. is taking a post graduate business class at UCLA where this issue is a part of the course. He is supposed to figure out what non US companies Berkshire Hathaway (
BRK.A/
BRK.B), led by Warren Buffett, might be considering for investment.
Ahh yes, the prediction business, quite tricky indeed. Starting with some basics, in most cases I would stick to the time tested philosophy that past performance is not an indicator of future success. That said, I think in the case of Buffett, it does. There are many clues along the trail based on his past performance.
Here are some basic consistencies from the existing portfolio that I would expect to hold true going forward.
Continue reading Serious Money: Buffett Looking Beyond Our Borders
Posted Jun 11th 2010 4:30PM by Gary E. Sattler (RSS feed)
Filed under: Products and Services, Management, Industry, Competitive Strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Employees

As anticipated, there has been little to no reaction from investors regarding the retirement of the Mercury name plate by Ford Motor Company (
F). Given the resounding lack of identity which has surrounded the Mercury brand, eliminating the line seems like a prudent and timely move. Market share for Mercury has dwindled to less than 1%, and estimates put Mercury's portion of Ford's share price at something less than 2%.
Analysts estimate Mercury's value to Ford is approximately $1 billion, while the company on the whole is
estimated to be worth approximately $38 billion. When given the fact that Ford expects to transition it's Mercury dealers into the Lincoln brand line, the fundamental value impact on Ford shall be essentially nonexistent. The company has declared that this inter-company transition shall not result in any job loss.
Continue reading Ford Shutting Down Mercury Is No Big Deal
Posted Jun 7th 2010 2:10PM by Sheldon Liber (RSS feed)
Filed under: Management, Chasing Value, E*TRADE (ETFC)

One of my 2010 stock picks seems to be adrift closer to its 52-week low ($11.52 July 8, 2009) on a long slow downtrend. On June 2, 2010 E-Trade (
ETFC) did a reverse 10 for 1 stock split and is now trading back in the teens, having closed last Friday at $14.06. For the time being, it is trading under the symbol
ETFCD.
This allows many pension funds and other institutions to hold positions in the stock that they could not before when it was under $5.00 per share (significantly) due to restrictive investment guidelines.
E-Trade management may have been counting on this to inject some life in the stock or at a minimum some additional support. This has not been the case as the stock continues to erode with the other financial stocks.
Continue reading Chasing Value: E-Trade Is Adrift
Posted Jun 6th 2010 4:00PM by Sheldon Liber (RSS feed)
Filed under: Management, Rants and Raves, Scandals, Halliburton (HAL), BP p.l.c. ADS (BP), Politics, Sunday Funnies, Oil, Headline News

During the ongoing environmental disaster caused by BP plc (
BP) that is spewing thousands of barrels of oil a day into the Gulf of Mexico (only now reducing the spill rate), there have been many calls to have the federal government take over the cap and recapture effort. This is a very lame idea.
First of all, nobody has more incentive in bringing this disaster to an end then BP because no entity has suffered more financially or seen its reputation eroded faster.
Continue reading Sunday Funnies: Gov't Can't Clean Up Its Own Act
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