Based on the US Market situations that were seen during regular trading hours on Monday April 28th, 2008 and with the ongoing worldwide situations concerning both oil and the US Dollar, the Kangaroo Money Team do not expect the Fed to cut or raise US Interest Rates on Wednesday April 29th, 2008.
The Kangaroo Money Team reached this conclusion based on the weakness of the US Dollar around the world and the apparent belief of investors in the United States that a bottom has been reached in the US stock market. While the KM Team does NOT believe a bottom has been reached, the KM Team DOES believe the overall weakness of the US Dollar worldwide is driving the wide upward pricing of oil and thus the impact on the economy both here in the US and around the world.
To repeat, the Kangaroo Money Team does not believe that the US Fed will cut or raise the US Interest Rates on Wednesday April 29th, 2008.
You will find our weekly comments here on this page with fuller opinions and reasons following after you hit the ( click here to read more ) highlights. ( Currently, we have turned this feature off so that one and all can get a feel for our openings and read all that is available. In the future, this feature will be turned on. ) Anyone can tell you a one or two sentence blurb but we like to back up our comments with our views so that you can understand where we are coming from. Down lower, you will find our Definitions of the Week. These are items that will be complied into a term dictionary at a later date but that will help you now as we explain some of the power phrases of the week just passed. Below that you will find our Person of the Week feature, representing the one person that the KM Team thought was most responsible for moving the USA markets and / or economy last week. And starting this week another new feature has been added called Updates and Comparisons. In the U & C section, the KM Team will give you some of the latest information concerning some of the previous comments published here as well as compare the KM Team take on things to other counterparts. The U & C section will be a nice way to see if the KM Team is staying the true course in the ocean of Economy.
Because we are writing for everyone, don’t be afraid to let us know how we are doing. This is an ongoing work-in-progress where we hope to bring fresh changes, new site additions and page features as we go forward. As the days go by, we won’t forget to tell you we think we are doing — so don’t YOU forget to tell US how you think we are doing! For now, enjoy, learn and earn!
Kangaroo Money Team
They tried to warn us…We should not be surprised when well-managed companies like Coke ( KO, traded on the NYSE ), IBM ( IBM, traded on the NYSE ), Google ( GOOG, traded on the NASDAQ ) and Caterpillar ( CAT, traded on the NYSE, stock owned by Kangaroo Money Partners ), forecast a slow down in their US business and refocused on their foreign business then came back to report a profit, even in this slowing economy. These companies developed long-term plans and focused on global expansions into new markets. Now, it’s paying dividends. ( click here to read more ) “What about taking the Financial Sectors out of the equation?” is the latest spin. Caterpillar is a good example of this. The only problem with that subterfuge is that these companies could tell with their reduced orders from their dealers that a slow down was coming, that the housing sector had a slow down coming. Without counting the Financial Sectors, yes there gains in the US Markets. But how can you NOT count those sectors?? I’ll tell you how — when you’re trying to spin Billions and Billions of dollars of losses. Financial houses have been losing Billions of dollars because it now appears that some of the banks and brokerage houses were not all that forth coming about their losses. Caterpillar for example, had reduced orders in the United States for building equipment back in October 2006 ( see below article notes ). Hats off to Caterpillar and others who tried to warn us.
Once again the Nanny Government is rearing its ugly head. Because people lack the basic math skills necessary to realize that by making $8 per hour they really can’t have a $2000 per month mortgage AND they also lack the basic intelligence necessary to know that the phrase “Don’t worry about it” means you SHOULD worry about it, all of us that are financially capable must now bail out those that should pay the price of their mistakes. How will that impact other, more desired, Government spending? ( click here to read more ) There is an ongoing hue and cry going up in the US government to save all of the people who made “bad deals” with their mortgages and who now will not be able to meet their payments and keep their homes. Funny that no one tried to save these people from themselves when they were making the deals 3,4,5, years ago. And this seems to have nothing to do with unskilled, low paid, on-the-edge economy people, whom these people who are losing their homes seem to be. No. The whiners and the Nannies of the government, which is to say not everyone currently in office, don’t want to send these people to school ( grade, high or college ) to get a basic education to allow them to get a better job and make more money so as to allow them to keep their homes. No. The Nannies want to take your money and mine and give it to the people who made a bad deal so as to keep things the way they are NOW, with no consideration at all about the current or future market conditions. And by the way, the future market conditions was EXACTLY how and why the Adjustable Rate Mortgages or ARMs were written for to start with. Do we allow the free market economy to work as it is designed to? Or do we open ourselves up to a true Nanny Socialism Government and let them control the free markets so that they cease to exist? Look for the strong banks and the loudest critics of this attempt to carry the day. Think of today as allowance day when you were a kid — no work, no pay, no matter how hard the work was.
Attack of the Clone…The other day at work, I heard someone listening to what I thought was an MP3 player, up until it rang. Then I thought that it was an iPhone, but no, wrong again. It was a clone of an iPhone that cost half the money. ( click here to read more ). Now my Kangaroos, there are two downsides of the iPhone: the high price of the service contract and the price of the iPhone itself compared to other “regular” cell phones. But in all fairness to the Apple Company ( AAPl, traded on NASDAQ ), it is a nice phone and so if you’re going to copy something, copy the best! The iPhone is listed as: “iPhone is a revolutionary new mobile phone that allows you to make a call by simply tapping a name or number in your address book, a favorites list, or a call log. It also automatically syncs all your contacts from a Windows PC, Mac, or Internet service. And it lets you select and listen to voicemail messages in whatever order you want — just like email. iPhone is available in an 8GB model for $399 and a new 16GB model for $499. 2008 Apple Inc.” I searched for the company that was making this clone phone and found that I already had some of their products in my house. Here is some of what they make: 1.1-inch KeychainPhoto Frame with1MB Flash Memory, supports Alarm, Calendar and Time Display - ER-F01; Photo Album with 10.4-inch LCD Display and DivXPlayer Function - ER-F104B; Shuffle Screen MP3 Players with Built-In Lithium battery and SteroFM Radio - ER-M22B; Sunglasses MP3 Player with Capacity of 256MB, 512MB, 1GB and 2GB - ER-S01; MP5 Player with 2.8-inch QVGA Screen, Supports RM/RMVB, AVI, 3GP and MPG Video Files without Convert - ER-M636; GsmPhone with Triband Band Frequency, Supports Bluetooth Function and T-Flash Card - A88; USB 2.0 Flash Drive with 11Mbps Writing and 12Mbps Reading Speed, RoHS and CE Compliance - ER06 –The name of the company is E-Ran Technology Co., Limited. (company data can be reviewed at the site below) E-Ran is a high-tech enterprise specializing in the R&D, manufacturing and marketing of digital electronic products. Its main products include MP3/MP4 players, USB flash disks, digital photo frames etc. It has a work force of about 280 staff and a factory housing three production lines, with an output of 80,000 to 100,000 units monthly. Eighty percent of their output goes to overseas markets outside of their native China, benefiting clients in the Americas, Europe and the Middle East. Now, it’s not known if E-Ran has any plans to go public now or in the future, but Kangaroos, this is one company to watch. We at Kangaroo Money will keep an eye out for an IPO and let you know.
Some of you have written to ask Kangaroo Money how we think that you, the questioners, have any time to think about stocks, bonds, investing and your financial future. Don’t you realize just how busy and filled our daily lives are, you write. Well, we do know just how busy you are and we say that there are spare hours in everyones’ day that can be put to good use. (click here to read more) Kangaroo Money has used the following example before and we are happy to pass this on to you, our valued reader. You get up on a workday morning and head off to work. On the way you stop by your favorite fast food place to get a breakfast something or other. Or maybe you stop by your local doughnut shop to pick up goodies for the gang at the Office. Still going along your way, you hit the next drive through for your morning coffee fix. Realizing you need gas, you stop at the local filling station for your weekly amount of pain. And then its onto the Expressway to finish out the commute. Along the slow winding way, you notice several 18 wheeler trucks and some local garbage trucks intermingled in the traffic. The trucks remind you to call to the Office to make sure that the cleaning crew took care of the break room the night before. Before you know it, you are parking the car and heaving a sigh as you climb up to your office. This is how your morning commute usually goes. Allow Kangaroo Money to suggest something slightly different. You get up on a workday morning and head off to work. On the way you stop by your favorite fast food place to get a breakfast something or other ( McDonalds*, MCD, traded on the NYSE or Burger King, BKC, traded on NYSE ). Or maybe you stop by your local doughnut shop ( Krispy Kreme, KKD, traded on the NYSE ) to pick up goodies for the gang at the Office. Still going along your way, you hit the next drive through for your morning coffee fix ( Starbucks, SBUX, traded on NASDAQ ). Realizing you need gas, you stop at the local filling station for your weekly amount of pain ( ExxonMobile, XOM. traded on NYSE or Hess, HES, traded on the NYSE ). And then its onto the Expressway to finish out the commute. Along the slow winding way, you notice several 18 wheeler trucks,( Heartland Express, HTLD, traded on the NASDAQ or J.B.Hunt, JBHT, traded on the NASDAQ ), some local garbage trucks ( Waste Management, WMI, traded on NYSE ) and several local delivery vans ( United Parcel Service UPS, traded on the NYSE or Staples, SPLS, traded on NASDAQ ) intermingled in the traffic. The trucks remind you to call ( Motorola, MOT, traded on NYSE ) to the Office to make sure that the cleaning crew took care of the break room the night before. Before you know it, you are parking the car and heaving a sigh as you climb up to your office,aware that you now have a dozen companies to review, and compare against each within their fields, during your hour at the library on Saturday. — The same trip, the same routine, the same looks out the car windows. But such a different view! Use the lesson wisely Young Kangaroo and your future will be bright, bright, bright!
As promised, the Kangaroo Money Team has reviewed the Pay Day Loan situation. Here is the KM Team take on the issue. — Pay Day Loans– From Wikipedia, the free online encyclopedia, ( www.wikipedia.org ) - “A payday loan ( also called a paycheck advance or payday advance ) is a small, short-term loan that is intended to cover a borrower’s expenses until his or her next payday. Typical loans are between $100 and $500, on a two-week term and have interest rates in the range of 390 percent to 780 percent ( APR ). ( definition continued inside ) ( click here to read more )The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Though payday lending is primarily regulated at the state level, the United States Congress passed a law in October 2006 becoming effective on October 1st, 2007 that caps lending to military personnel at 36% APR as defined by the Secretary of Defense. The Defense Department called payday lending practices “predatory”, and military officers cited concerns that payday lending exacerbated soldiers’ financial challenges, jeopardized security clearances, and even interfered with deployment schedules to Iraq. Some federal banking regulators and legislators seek to restrict or prohibit the loans not just for military personnel, but for all borrowers, because the high costs are viewed as an unnecessary financial drain on the lower- and lower-middle-class populations who are the primary borrowers.” FDIC Guidelines for Payday Lending - Payday lending raises many consumer protection issues and attracts a great deal of attention from consumer advocates and other regulatory organizations, increasing the potential for litigation. Regardless of whether state law characterizes these transactions as loans, they are considered extensions of credit for purposes of federal consumer protection law. Laws and regulations to be closely scrutinized when reviewing payday lending during consumer compliance examinations include: Community Reinvestment Act (CRA)/ Part 345 ( more can be reviewed here: http://www.fdic.gov/regulations/laws/rules/2000-6700.html ) Kangaroos, this is one of the reasons we started writing this blog and site. The Kangaroo Money Team have been saying from day one, “Kangaroo Money is going to help you with getting a grip on the world of business, finance and money in general.” So you don’t have to use something that looks like and works like a Payday loan. The KM Team wants you to build up your bank account or maybe invest in the stock market. The point is to help change bad financial habits to good ones. I was so surprised when I found out that some of my co-workers went to the local payday loan offices. While driving home, I saw that one of these places has opened in my neighborhood. Which tells me it is not just the working poor who are using these places. Please, get your finances under control. Seek help from professionals if you need to. It doesn’t matter what your income is. Here’s a simple warning sign if you live paycheck to paycheck–your finances are out of control. The KM Team Partners have lost jobs, been broke, been down and out. We have been there where you are now and we are never going back again. You can do it too!
Two items came out of the jumble of the economy news this week. The first one was the final agreement by Triarc Company ( TRY, traded on NYSE ) to purchase the long turmoiled Wendy’s International company ( WEN, traded on NYSE ) after a full two years of dancing to the bank. The second one was the Boeing Company ( BA, traded on NYSE ) again reaffirming its outlook for the remainder of 2008. (click here to read more) For Triarc and Nelson Peltz, the $2.34 Billion purchase not only solved a long two year stormy courtship but also beat out a competing offer that most of the Wendy franchisees and employees had wanted. Mr. Peltz and Triarc already own the Arby’s chain, so this purchase will only add to the power that Mr. Peltz expects to use to change the fast food landscape. He is known as a “changer” and has been very vocal in several of the companies that he has taken an interest in or has a position in, trying to get their Board of Directors to see his point of view for their companies. Watch Mr. Peltz and watch the fast food industry as all of belts begin to really tighten. For Boeing, it has been a rough ride so far in 2008. Imagine if the Swiss Guards were told they would have to use American Army knives instead of their own in country made Swiss Army Knives? That is what happened when Boeing found out that Airbus, their main competitor in building airplanes and primarily supported by the French government “wink, wink”, won the major US Air Force contract for refueling tanker planes. On top of that, the long and getting longer awaited 787 Dreamliner, promoted almost as long as the Democrats have been running for the 2008 Presidential nomination, is still 15 months behind schedule and not showing any signs of being built any time soon. Boeing blames their suppliers, and rightly so, but they were also in charge of those suppliers so Boeing and their Mr. Fixit Chairman and CEO Jim McNerney are taking the heat even as they rack up record orders and record profits. Boeing has been a favorite of the Kangaroo Money Team for over 2 years now and will continue to be so. Two of the reasons for this: they are one of the major players in a very uncrowded field and they make a product that is dependable and recognized the world over for being so. Boeing will solve their problems going forward, continuing their success and keeping the Kangaroo Money Team flying high on them.
Concerning They Tried to Warn Us:
New York (MarketWatch, www.marketwatch.com) - Caterpillar Cuts Outlook for 2006 and 2007; Function of Slowing in Housing and Economy, Blue Chip Says; by Padraic Cassidy Market Watch Last Update 4:11pm EDT Oct. 20, 2006
Champaign Ill. (AP) 10/19/07 - Heavy-equipment maker Caterpillar Inc. said Friday that its Third-Quarter earnings rose 21% but lowered its outlook for the year based on slow US economic growth.
Chicago (AP) 04/19/08 - The heavy equipment maker Caterpillar parlayed an increased reliance on international markets to surprisingly strong sales and a 13% jump in First-Quarter profits, impressing investors who had expected the company to be slowed more by the weak American economy and dollar.
Concerning Attack of the Clones: Star Wars Episode II: Attack of the Clones is a 2002 space opera film directed by George Lucas and written by Lucas and Jonathan Hales. It is the fifth film to be release in the Star Wars saga and the second in terms of internal chronology .( http://en.wikipedia.org/wiki/Attack_of_the_Clones )
The * identifies stocks owned by Kangaroo Money Partners.
A Young Kangaroo is called a “joey”, but we figured that might confuse the KM Team!
Concerning Payday Loans:the Consumer Federation of America (CFA) is a non-profit organization founded in 1968 to advance the consumer interest through research, education and advocacy.
(only 6 this week Kangaroos, but they filled with the good stuff — read, learn and earn!)
Updates and Comparisons:
In Week 15 ( Beginnings ), Kangaroo Money wrote about Ford Motor Company, a stock owned by the KM Team, and how an infusion of cash from the sale of its Jaguar Land Rover operations to Tata Motors would allow the company to return to making American Style cars again. Ford and its Chief Executive Alan Mulally followed this news up with a First Quarter income of $100 Million. Kangaroo Money still believes that Ford is a very good long term play, more than 12 months holding, as like Ford & Mulally the current good fortune does not seem to be sustainable through the rest of 2008. Racing forward or idling?
In Week 15, ( Beginnings ) Kangaroo Money wrote about the impact of the sub-prime mortgage situation in a Big Picture way, addressing the bail-out of Bear Stearns. Now comes news that even in areas where there were not a high amount of sub-prime loans made, the impact is being felt. New Hampshire, via the Manchester Union Leader newspaper, is reporting a total of 6% of mortgages are now going delinquent. This marks the first time since 1992 that New Hampshire is matching the national average in that area. The KM Team notes that 16 years to sink ( rise? ) to the national average is pretty damn good. Those who know nothing of History are doomed to repeat it.
In Week 16, Kangaroo Money wrote that 2008 would be a down year for movies all the way around. Now comes word that a possible Actors strike is in the making as the current Screen Actor Guild contract expires on June 30th 2008. Productions are stepping up the pace to complete current movie productions and them wrapped so as to avoid costly delays and re-accounting’s should movies run past the June 30th deadline. The Alliance of Motion Picture and Television Producers have been talking for 10 meetings now and will begin negotiations on May 5th, 2008 with the American Federation of Television and Radio Artists also. HOW much for popcorn???
In Week 16, Kangaroo Money wrote not once but twice about the airline industry and its onging struggle to remain “afloat” shall we say. On top of the previous mentioned airlines that had folded tent in 24 hours or less, we can now add the New York City to London business airline Enos to the list. The 3 year old company has announced that as of Sunday April 26th all flights will be the last and the operation will cease on Monday April 27th. At this time, most of Enos Airline employees will be let go as of the 27th. Who’s next?
And lastly, in Week 16, Kangaroo Money wrote that the Have-Nots will begin to grow in much greater numbers than the Haves. This will lead to the Have-Nots to once again start taking what they want. There are growing reports nationwide that gas station non-pay drive offs are going up. Here at Kangaroo Money, we feel that this is the precursor to the night time driveway theft of gas not seen since the mid-1970’s called siphoning. The Kangaroo Money Team suggests that you prepare now by going out and buying a lock gas cap. It’s money well spent when you consider that tomorrow morning you might find $50 gone from your tank and you’re calling into work late. Honest, I filled it up last night Dad!
MARKET MOVER OF THE WEEK: The original candidate was Senator Barack Obama but with a big loss in Pennsylvania this past Tuesday, Senator Obama failed to move much of anything except even with Senator Clinton. Hil-Rod also did not move the economy despite getting over $10 Million in donations the day after her big win and so fails to get this weeks MMW honor. This weeks winner is Alan Mulally, CEO of Ford Motor Co., despite his “it’s not going to last” warnings. Ford put together a strong First Quarter with earnings of $100 Million dollars and this does not include their Jaguar Land Rover profits. Mr. Mulally and CFO Don LeClair both warn that they expect Ford to lose money the rest of 2008. But the announcement helped to move the US Markets upward against reason and reality. Or should we say, helped to drive the US Markets upward?
Week 18 2008 Market Mover of the Week? Look for the Dalai Lama to try to sooth the Tibet - China waters over the upcoming 2008 Summer Olympics and how Tibet is being handled. How could the Dalai Lama be a MMW? Anyone want to guess how much money is on the line for the sponsor companies of the Olympics this year? Test our opinion next week!
DEFINITIONS:
Jumbo Mortgage: a mortgage with a loan amount usually above the industry standard; as of 2006, the loan amount is defined as being above $417,000 in the lower 48 United States and as being above $625,000 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
Super Jumbo Mortgage: a mortgage with a loan amount above the definition of Jumbo Mortgage; as of 2006, the loan amount is defined as being above $500,000 to $1,500,000.
Fannie Mae: what the Federal National Mortgage Association (FNMA) is commonly referred to; a US government sponsored organization, it is a shareholder-owned corporation that is to authorized to make loans and guarantees; there is no US government funds used by the FNMA.
Freddie Mac: what the Federal Home Loan Mortgage Corporation (”FHLMC“) is commonly referred to; a US government sponsored organization, it is a shareholder-owned corporation that is to authorized to make loans and guarantees; there is no US government funds used by the FNMA.
IPO: Initial Public Offering; when a public company first offers stock in its company to the general public; usually a small, growing company that needs cash to expand or an older company looking to become a public institution start IPO proceedings.
Kangaroo Money is happy to see that we have a worldwide readership! What better reason for us to keep doing what we enjoy doing? Keep those comments coming in, we do appreciate hearing from you. As the days go by, we won’t forget to tell you what we think we are doing — so don’t YOU forget to tell US how you think we are doing!
You will find our weekly comments here on this page with fuller opinions and reasons following after you hit the ( click here to read more ) highlights. ( Currently, we have turned this feature off so that one and all can get a feel for our openings and read all that is available. In the future, this feature will be turned on. ) Anyone can tell you a one or two sentence blurb but we like to back up our comments with our views so that you can understand where we are coming from. Down lower, you will find our Definitions of the Week. These are items that will be complied into a term dictionary at a later date but that will help you now as we explain some of the power phrases of the week just passed. And below that will our Person of the Week feature, representing the one person that the KM Team thought was most responsible for moving the USA markets and / or economy last week.
Because we are writing for everyone, don’t be afraid to let us know how we are doing. This is an ongoing work-in-progress where we hope to bring fresh changes, new site additions and page features as we go forward. As the days go by, we won’t forget to tell you we think we are doing — so don’t YOU forget to tell US how you think we are doing! For now, enjoy, learn and earn!
Kangaroo Money Team
This will be a down year for movies, both at the theaters and from the rental stores, as we turn into homebodies and couch potatoes, while we conserve and save our pennies. That should mean a new Golden Age for television and the Networks as a whole as we see a new “have to see TV” era. The culprit in all this? Oil. Of course. ( click here to read more ) This travel season should become more dismal as the days progress from Spring into Summer. The reason will be seen as gas prices but the real reason will be diesel prices. The price and cost of moving anything in this country is going up each day. That is because the price of diesel is about to break $4 a gallon, if it hasn’t by the time you read this. And it will stay above $4 a gallon from this day forward. So, did you think that this cost wouldn’t be passed on to you, the consumer? Wrong. It’s already being passed on to to you in the form of higher food prices, higher retail product costs and higher base material costs at your place of business. Did you think that your potential raise this year, estimated to be about 3.2% of your current income base on the national average, would cover those increases? Are you kidding? You’re already paying more than that in gas prices just from the 1st of this year! Does this mean that you’ll be taking a vacation this year like you did the last several years? I think probably not. I think that you will be looking to make cuts in any way that you can just so that you can drive back and forth to work every day. Do I think you will be throwing those regular back yard barbecues this year? No, not at the current price of food if you can help it. So, going to the movies, going at about $20 a pop per person these days when you add a movie ticket, a drink and a snack to the total, will be almost out of the question. Well, how about renting a movie? Most likely not from Blockbuster or Hollywood Video as they watch On Demand services, Netflix and computer downloading take over the markets they once dominated. Look for Blockbuster and Hollywood Video to begin “consolidating their assets” — what you and I call closing unprofitable stores and selling off the properties. Look for the movie studios to start scaling back their big action movies and their large location shoots as well. You’ll probably see more 4-5 character “talking heads” movies and less “Die Hard” style blockbuster, building blow-up movies along with just less movies period. So, what does that leave us? 57 channels and nothing’s on. Pass me the TV guide and the couch potato dip, will ya?
In keeping with the training aspect of Kangaroo Money and in the spirit of the Tax Season, if you are one of those people who get a large tax refund every year then we want to talk directly to you. In these difficult times and the continuing economic situations, it will be ever more critical to keep a ready supply of your money under your control. ( click here to read more ) If your withholding tax choices allow you a multi-thousand dollar tax refund every March-April-May, you have made an interest free loan to the USA Government and allowed them to decide how to use your money while you carry extra debt and scrabble for your weekly gas money. Your comeback to that argument is that there is almost no other way for you to save any money from year to year. We at Kangaroo Money disagree with that and point out that you probably don’t put that refund into a savings account when you get it anyways. If you were to reset your withholding alignment to allow for the minimum amount to be taken out of your paycheck, that will cause your filing in the next tax year to show you receiving or owing about $200.00 total. Enough debt that you can afford it from your paycheck in April when you file or enough rebate to enjoy a small luxury like a grand night out or some new toy for the rumpus room. By reducing your withholding payments, you will have more money in your pocket directly each paycheck to deal with these difficult times. But what about my savings??, I can hear you cry out. Check with your employer about your company and it’s 401K plan. Most companies with more than 50 employees have a 401K plan in place that will allow you to make payments out of each paycheck pre-tax, usually allowing an input of 3% to 6% of your income. Also, your employer will also usually match a percentage of your input, about 1/2% for each 1% that you put in above a threshold amount that they determine. The breakdown plays out typically in numbers of–you put 3 1/2% into the plan and your employer will add 1/2% to your total. The amount increases typically up to your contributing 6% and your employer adding 3%. It is all pre-tax money on your part ( taxed only when money is withdrawn ), it is an extra bonus from your employer and it is all much more easily managed via the Internet than it was even just 10 years ago. Research your employer plans and options, taking care to understand the choices that are given and to understand that investments go down the same way that they go up. Talk with your company Benefits Counselor about the plan, as that is their job as assigned by your employer and they are there to help you in anyway they can. Also, understand that money paid into a 401K plan is YOUR money and that money can thus be withdrawn by you for several life situations as a pay back loan or, it if an emergency arises that you just can not handle by some other debt instrument ( see the upcoming article on PayDay Loans and how Kangaroo Money feels about them ), you can withdraw YOUR money out of the plan–but at the proverbial substantial penalties, typically 10% of the total withdrawn up front and 20% of the total withdrawn at Tax Time, which is money that would have been taken from your paycheck to begin with if you had not put it into the 401K plan. Understand that choosing this option of more cash in weekly chunks and less cash in a once a year rebate check will take a little planning and care to get used to. Kind of like understanding that next May you might be enjoying a fancy night out at Chez MicD’s downtown Hometown instead of a fancy night out at Chez Paree in downtown Las Vegas.
Rely on the strength of your Brand -OR- Dance with the Girl that brung ya…Building a strong brand name is the point of being in business. Nothing new with that idea, right? Your brand, concept, and the idea that sparked the whole thing is that entire point. In short, it is why the customer comes through the door. So why do so many of today’s companies forget what made them the leading maker or service provider in their industry? ( click here to read more ) Starbucks ( SBUX on the NASDAQ ) is the latest example of a company that got away from their roots and have paid the price. Not even two years ago, when you said Starbucks you thought coffee. What happened? They got away from their time proven business model and rapidly lost their strength of brand. Now, they are going back to what they used to do so well. Let’s face it, we don’t go to Starbucks to pay five bucks for a cup of coffee. We go for the experience, to meet people or to watch your coffee being handmade in front of you. You go to while away the hours reading or whatever at the shop. The point is that they lost “it”. ( see The New York Times www.nytimes.com article located at–http://www.nytimes.com/2008/03/20/business/20sbux.html?scp=3&sq=starbucks&st=nyt . The man who built the chain, Howard D. Schultz, has retaken the reins in an effort to revive it. Mr. Schultz has said he wants to refocus on the “customer experience,” recapturing some of the magic of the chain’s early years, when employees–who had heard the term “barista” before Starbucks came along?-made the drinks by hand and customers were excited by top-notch coffee. ) McDonald’s ( MCD on the NYSE;a stock owned by Kangaroo Money partners ) saw a hole and exploited it. All that McDonald’s had to do was to improve the quality of their own coffee. Add a less expensive price to the cup and at the same time you can get breakfast, lunch or whatever and still make it to work on time. AND McDonald’s stayed within THEIR business model of quality food fast. ( see Associated Press ( www.ap.org ) for November 18, 2007 — Coffee clash: McDonald’s takes on Starbucks: McDonald’s executives came out swinging when they announced their assault on the comfy world of coffee shops. After the success of its upgraded drip coffee, which even managed to snag a thumbs-up from testers at Consumer Reports–the fast food chain known for super-size meals, is gearing up for a massive expansion into the world of lattes. Restaurants will offer lattes, mochas, cappuccinos and espressos with a choice of different flavorings and milk. Industry watchers say the drinks will cost about 50 cents less than Starbucks. ) As investors we need to always be on the lookout for those businesses that do “it” right. Just chugging along month in month out, steady increases. Up seven cents then down two cents then up fifteen cents, the next thing you know, they are up dollars and expanding globally and paying a dividend. Then one day, you look back over the two-year chart and start to smile.
Aloha went aloha. ATA went another typical airline. And now, Skybus has hit the happy Trailways. In one week, the airline industry showed us that traveling is going to get a great deal more expensive and, more importantly, a great deal longer to complete. Traveling is about to become less of a spur of the moment and credit card based weekend type of an event and go back to being the year in advance, planned to the Nth degree, save your money up to do it, type of thing again. The culprit in all this? Oil. Of course. ( click here to read more ) People are just waking up to a serious fact that has been going on since September 2007 - the price of food has been going up at an alarming rate. Oh, and by the way? So has everything else that is trucked to a store. All items have to pay for their ride on the diesel gulping trucks which means that WE, the customer, have to pay for their ride. And the fact that all items are going up, from groceries to gasoline to home furnishings, means that the family entertainment “budgets” will be severely squeezed. As the cost of travel, particularly air travel, begins to spiral upwards, a natural shrinkage in entertainment destinations will begin as well. The deals for those remaining fun spots will begin to disappear. And, at the bottom of this, people will need to go back to planning and saving in order to go on vacation, which will reduce availability of air travel instead of expanding it. This has already been mentioned by the Delta & Northwest people as they seek to combine into the world’s largest airline, i.e. as Delta & Northwest look to cut any plane, route, airport, employee not making a positive buck for the new company. So, which airlines will make it out alive? Believe it or not, it won’t be the ones with the best price or the most flights. Look for customer service and employee attitude to win the day.
Thornburg Mortgage is almost out of moves. Founded in 1993, Thornburg Mortgage ( TMA on the NYSE ) is a publicly traded, single-family residential mortgage lender operating in all 50 states in the USA, focusing principally on the jumbo and super-jumbo segment of the adjustable rate mortgage market, lending directly to clients as well as through relationships with lending partners across the country. But are margin calls on Thornburg limiting mobility? ( click here to read more ) Thrornburg Mortgage reported on Thursday March 20, 2008 that it faced more than $300 Million of margin calls in the last two weeks following a sudden deterioration in mortgage market conditions. They are trying to raise cash and avoid bankruptcy. The company reports that it will commence a private placement of up to $1.4 Billion of seven-year senior subordinated secured notes with an interest rate of 18.0%, which could be knocked down to 12.0% if the company is able to buy most of its preferred stock back at a fifth of its face value. The company is applying to the New York Stock Exchange for a waiver that will allow it to seal the deal without shareholder approval, arguing that any delay could “seriously jeopardize the financial viability of the company.” My friends, this mortgage crisis is going to get a whole lot worse before it gets better. Do not buy this bad paper! You should be looking at long play investing. There will be no quick fixes to what took a long time to get this way. We’re going to have to ride this one out with sound basics of investing ( which will be found here going forward ). You remember a previous installment about the “Secrets of Magic Exposed! The Fed, J P Morgan Chase and Bear Stearns.”? Well, at least Thornburg didn’t get a hand out from the Fed, taxpayers or another company. Not yet anyway. They are going to earn money the old fashioned way, by screwing the shareholders, of course. ( KM note: As reported by the Forbes internet service on March 29, 2008:”Thornburg Gets Another Break–Creditors have given the firm a third extension to raise $1 Billion of capital to stave off bankruptcy.” And then, as reported by the Forbes internet service on April 1, 2008:”Thornburg Mortgage Saves Itself–The beleaguered mortgage lender raised the necessary capital for its repo lenders.” The dates of when this news came out were 3 days for the latter and 12 days for the former after Kangaroo Money first pointed out that a problem was brewing at TMA. As of February 19, 2008 their share price stood at $11.87 per share - on March 20, 2008 the price was at $1.13 per share - on April 18, 2008 the price stood at $1.31 per share. Is Thornburg really in the clear now? Kangaroo Money does not believe so but keep watching and keep reading. )
There is a very big misconception about financial planning, that it is all just for the Rich. That is just not true. No matter what your income level is, good solid planning is essential, meaning short, intermediate and long term plans for a changing world are required by all. (click here to read more) A good way of getting your finances under control is to write down on paper all of your expenses. Everything you buy should also be recorded. A small 3 x 5 inch pocket sized notebook is easy to carry around and keep a handy record in. Know where your money is being spent and keep all of your receipts ( make sure to ask for a receipt for each transaction! ) Do no more unnecessary spending, dining out, no movies, etcetera and above all, do shopping a “cash and carry” basis only. No credit card charging until you get expenses and spending under control and you start reaching some basic benchmarks. Some other basic plans and goals: a) Pay off credit card debt completely over whatever time you feel comfortable without adding additional debt to the total. b) Have an emergency savings fund, six months of your income is a good rule of thumb. c) If you have a mortgage, pay it off completely, not just pay it down and then borrow against it again. d) Find out if your employer offers a Retirement Savings 401K plan or a company stock plan. Some of these plans have a percentage of matching employer funds based on how much you, the employee, defer to the fund up front. Everybody’s personal situation is different and these suggestions have covered only some of the basics. Kangaroo Money strongly suggest that you develop a personalized and realistic plan to meet YOUR needs and goals. Seek advice from your own financial or investment adviser. Remember that there are no instant fixes. It took a period of time to get in to financial trouble — it will take a period of time to get out of it.
Airlines are going out of business on a weekly basis. Most of the “legacy” carriers have at one time or another operated under Chapter 11 Bankruptcy Provisions or they have flat gone out of business. If you are a frequent flyer of the past few years, you have been putting up with delays, cancellations, sudden bankruptcies and / or restructuring of airlines that mean you can’t get there from here. For the airlines, if a few of them can manage to stay in business long enough to outlast their rivals, then he who survives the high fuel costs, the plane maintenance, the expensive labor and all of the other expenses, will win out. ( SIDE BAR: Standing up in a news conference and taking the blame for some or all of the above situations does not absolve your responsibilities to the employees, the investors and the FAA. ) The quality of management in the airline industry has been lacking for some time now, as evident by all of the defunct airlines. These are the guys who in some cases ask the employees to give back salaries to keep the airline afloat and, when they get it, they vote to give Management bonuses. How does an airline win when others fall by he wayside you ask? How about having your pick of the good airline routes, the terminal gates in the right spots, laying off airline workers who need to be gone and retiring planes. Retiring planes your ask? Oh yes, especially the planes. Here is how that will work: sell off your old but still serviceable planes to a foreign country ( which I believe I saw in a movie once ), then put in a low-ball bid with Boeing ( BA on the NYSE ) or Airbus who are both having problems getting their newly designed planes out of testing and into the market place so that maybe they are ready to cut a deal; get newer planes with better fuel rates and snag more customers. As a pointed and obvious view of the at least the USA airline industry, the following airlines have either already gone out of business or have announced that they are going out of business ( in no particular order ): April 3, 2008 ATA Airlines announce Thursday morning it is shutting down all operations and canceling all current and future flights, only a day after…March 31, 2008 Aloha’s owners, who pulled the airline out of its last bankruptcy in 2004, have lost an estimated $200 Million and the company has been shut down…the TWA name went away as it was acquired by American Airlines in 2001…Midway Airlines out of North Carolina went away…Hooters Air disappeared but it’s parent company Pace Airline is still flying…the short lived Legend Airlines out of Love Field…the original Pan Am completed it’s final payment to former workers only after a lawsuit was settled and the second Pan Am has ceased regular operations and has gone over to a total charter business…Skybus shut down in April 2008. As investments, I don’t like airlines at this time. That being said, there will be opportunities for investing if you can correctly pick who will be the last man standing. ( Sources: CNBC, MSNBC and www.flyertalk.com )
As the economy begins to turn further downward, coasting at a lower level than even in 2007, the Have-Nots will begin to grow in much greater numbers than the Haves. This will lead to the Have-Nots to once again start taking what they want instead of even trying to work for it. And we, the Me-Now-Screw-You generation, have taught that value to the soon to be Have-Nots. So, are security firms and associated companies places you should be looking at for the future? ( click here to read more ) People are going to discover very quickly that they are not going to be able to go out and buy new stuff like they have been doing for the last 10 years or so. That means that they are going to need to protect what they already have, be that cars, household items, yard equipment and / or entertainment items. Can people all afford to lock down their homes and apartments under 24 hour guard ala Brinks ( BCO on the NYSE ) or ADT? Can all items be etched, detailed, cataloged and bugged to keep the insurance up on them? Can every car in every city and town be Lo-Jacked ( LOJN on the NASDAQ;a stock owned by Kangaroo Money partners ) so that people will not lose what is quickly becoming their largest asset? Can people who are now paying more for any and all daily items really going to be able to afford this type of massive record keeping and the additional associated costs just to keep the items they already have? Are people even familiar with what they are going to have to do as far as locking up things like their cars, their garages, their tool sheds and their homes just to keep all their stuff? The answer to all of these questions is “doubtful, at best”. So, the security firms that keep things as simple as possible, that offers hands on service to identify and track peoples’ valuables, that keep their insurance cost reasonable and explainable, and that keep their expenses as low as possible, THOSE are the companies that will do well in the next 3 to 4 years. Begin your research now because the money will be made by getting in at the low end now rather than on the up-tick after the fact. And it wouldn’t hurt to do a little a research for your own pieces of the American Dream that you might want to keep around a while longer, too.
MARKET MOVER OF THE WEEK: The original candidate was Pope Benedict XVI, chosen by Kangaroo Money because of his visit to the United States during this week, including a visit to the White House. However, the Market Mover of the Week has to go to IBM Chairman and Chief Executive Sam Palmisano who on Tuesday night after the closing bell at the NYSE announced first-quarter net income at more than expected 26% or net income of $1.65 per share. Mr. Palmisano set in motion the current “rally” with that announcement as well as getting a very nice 3.5% increase, or $4.23 per, on IBM shares in the Tuesday overnight, aftermarket trading. It’s good to be the King.
Week 17 2008 Market Mover of the Week? Look for Senator Barack Obama to be the big mover and shaker during Week 17 as the primary contest in Pennsylvania comes to a head on Tuesday April 22nd, 2008. Test us next week on our choice!
DEFINITIONS:
ARM: abbreviation for Adjustable Rate Mortgage: a mortgage that allows for periodic changes in the interest rate, based on changing market conditions; most ARM’s had started at a low percentage rate due to the 2005 through 2007 USA economy conditions allowing a number of applicants who would not normally have qualified for a mortgage to secure loans; the “adjustable” part of those ARM’s have been going up as the USA economy has been sinking, driving those holding such ARM’s to seek default as they can no longer afford the higher rates
DJIA: abbreviation for The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. In 1896, Charles Dow invented the DJIA as the Gilded Age economy in the United States began and financial information became critical to the country as a whole.
401K: a savings plan set up an employer through a financial institution that allows employees to contribute a fixed amount of income directly from their paychecks into a retirement account and to defer taxes on that contribution until the funds are withdrawn; the employer typically contributes some amount to employee fund if certain thresholds have been met.
NYSE: abbreviation for the New York Stock Exchange; world’s largest dollar volume stock exchange at current figures, it’s main trading floor is located in New York City, NY USA at 11 Wall Street; created by 24 stock brokers on May 17th, 1792 who all signed what is called the Buttonwood Agreement outside of 68 Wall Street under an actual buttonwood tree.
NASDAQ: abbreviation for the National Association of Securities Dealers Automated Quotation System; founded on February 8th, 1971 it was the first electronic stock market, starting as not much more than a computer bulletin board that did not connect buyers to sellers of stocks: as of 2008, it is the largest electonic equity securities trading market in the USA, with approximately 3,200 companies, it currently lists more companies and on average trades more shares per day than any other USA market
Thanks to all that have read us so far. And thanks to those that are just coming over to read us for the first time. Keep those comments coming in, we do appreciate hearing from you. As the days go by, we won’t forget to tell you what we think we are doing — so don’t YOU forget to tell US how you think we are doing!
For now, enjoy, learn and earn. R, S & D…
DISCLAIMER:
All opinions expressed by Kangaroo Money are the sole views of the authors. You should not treat any opinion expressed by Kangaroo Money as a specific inducement to make a particular investment or follow a particular strategy but, only as an expression of Kangaroo Money opinions. Kangaroo Money opinions are based upon information it considers to be reliable, from many public sources but, Kangaroo Money is not under any obligation to update or correct any information provided on this website. Kangaroo Money statements and opinions are subject to change without notice. All writings, articles, comments are the sole property of Kangaroo Money and cannot be used without expressed written permission of Kangaroo Money. Past performance is not indicative of future results. Kangaroo Money nor its authors guarantees any specific outcome, profit or loss. You should be aware of the real risk of loss in following any strategy or investment situation discussed on this website. Strategies and / or investments discussed may fluctuate in price or value. Investors may get back less than originally invested. Investments and / or strategies mentioned on this website may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website. Before acting on information on this website, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
Welcome to the beginning of understanding “The Economy”.
Why “Kangaroo Money”?
There are people in the world who bounce from the Latest & Greatest to the Next Big Thing in a heartbeat, always trying to get the biggest bang for their buck without doing any work or due diligence. They will jump around from ethanol to natural gas drilling to oil pipelines, then pounce on cellphone handsets to computer microchips to data storage and then go over to water companies to home builders to real estate much the same way a Kangaroo bounds through the underbrush of its homeland looking for an easy meal. In the wild, Kangaroos travel mostly in packs which are called mobs, much the same way as the investors that are described above do. Whether these people do this type of investing through a deliberate thought process or through investment knowledge ignorance, they tend to miss an important fact of life — that understanding what is happening and what might happen in the future financially can stop you from a critical situation called making money.
Kangaroo Money is going to help you with getting a grip on the world of business, finance and money in general. Some of what you will see and read here will be:
Definitions of terms used in today’s news reports like FDIC Insurance, P-to-E, the meaning of stocks and what bonds are
Insights to companies and their information as Kangaroo Money sees it in their opinions
Commentary on the news of the time concerning companies, government and individual interactions
Where to go for more detailed information for items that you see here via the Internet, newsstands, televisions and libraries
Kangaroo Moneys’ opinion on worldwide situations and how to understand why they would impact you, your business and your career
Views spanning not only American business but the global economy and how it affects all things financial
And more of what relates to money, investing and you
What Kangaroo Money will NOT be showing you will be specific buying or selling times for any stocks, bonds or other financial instruments. We do not buy your stocks for you, we do not sell your stocks for you or, any other financial instrument. We are not stockbrokers, insurance agents, bankers, loan specialists, government agents or boiler room salesmen. Any investment made by you is MADE BY YOU alone. We encourage you to read our opinions and do whatever research you feel is necessary to make a decision. But we will not scream a bullet point that boasts 250% gains on some BuyItNow penny stock. Instead, you will find information on how to make better financial decisions as well as our opinions on the markets, companies and business of the world at large. To that end, here is our disclaimer to that effect: <click here to read more>All opinions expressed by Kangaroo Money are the sole views of the authors. You should not treat any opinion expressed by Kangaroo Money as a specific inducement to make a particular investment or follow a particular strategy but, only as an expression of Kangaroo Money opinions. Kangaroo Money opinions are based upon information it considers to be reliable, from many public sources but, Kangaroo Money is not under any obligation to update or correct any information provided on this website. Kangaroo Money statements and opinions are subject to change without notice. All writings, articles, comments are the sole property of Kangaroo Money and cannot be used without expressed written permission of Kangaroo Money. Past performance is not indicative of future results. Kangaroo Money nor its authors guarantees any specific outcome, profit or loss. You should be aware of the real risk of loss in following any strategy or investment situation discussed on this website. Strategies and / or investments discussed may fluctuate in price or value. Investors may get back less than originally invested. Investments and / or strategies mentioned on this website may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website. Before acting on information on this website, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
At the moment, your host and guides will be three of us who are going to try to help you get in step with the business of Business as we see it. There is is Ray, Steve and Daniel, who will be contributing to this newsletter our views, opinions and insights to the World of Finance as current as we can make it. Ray is the Old Dog of the trio, a cynical, pessimistic, contrarian who has a historical eye to how things are way they are and a sarcastic wit that will help you see his viewpoint. Steve is the Other Side of the Road man of experience with a steadfast viewpoint and a sardonic exacting wit and tongue, capable of making you see what has been in front of you all along. Daniel is the Young Pup with the fresh take on ongoing and emerging technology as well as a Today-In-Your-Face look on the world at large, as well as a thought process that Ray and Steve are way too old and way to past it to understand. Between us, there are over 110 years of life experience which will be of benefit to you as you try to navigate the actual world wide economy that we will be writing about. But be prepared. Some of this will force you to re re-evaluate how you think and act as a person if you begin to agree with us and our viewpoints. This will not be for the faint of heart. Please try to keep up because things change so quickly that going backwards could cost all of us not just time but money as well.
You will find our weekly comments here on this page with fuller opinions and reasons following after you hit the (click here to read more) highlights. Anyone can tell you a one or two sentence blurb but we like to back up our comments with our views so that you can understand where we are coming from. Down lower, you will find our Definitions of the Week. These are items that will be complied into a term dictionary at a later date but that will help you now as we explain some of the power phrases of the week just passed. And below that will our Person of the Week.
Because we are writing for everyone, don’t be afraid to let us know how we are doing. This is an ongoing work-in-progress where we hope to bring fresh changes, new site additions and page features as we go forward. As the days go by, we won’t forget to tell you what we think we are doing — so don’t YOU forget to tell US how you think we are doing! For now, enjoy, learn and earn!
Kangaroo Money
If you desire to have some one else do your thinking for you — and you get to pay for the privilege — then investing through a Mutual Fund is the right way for you to invest in either Stocks, Bonds or both. It does, however, turn all of the thinking over to someone else while you keep all of the responsibility. (click here to read more) This method does allow for you to seek out the best mind in the business world who has culled a group of stocks into a Fund that he or his business is selling shares in. Most likely, he has a group of people who has done, and continues to do, most of his legwork in researching the stocks that are in the fund but, you are paying for his name and his smarts to make you money. The “make you money” part is not guaranteed and neither is the Fund Managers’ skill. But because you can not seem to tear yourself away from Dumbarse Idol to spend 30-60 minutes an evening, or even a week, researching companies and stocks, you are paying fees to someone else to do what you could, and should, be doing yourself. Enjoy those profits.
This week on “Secrets of Magic Exposed!” The Fed, J P Morgan Chase and Bear Stearns team up to do an illusion that Houdini himself would be proud of. (click here to read more) Here’s how it’s done. In this hand I hold a Fed guarantee of $30 Billion for Bear Stearns — a taxpayer, funded bailout of an investment bank. Now, we are all supposed to be looking at the hand with the money in it. And in the other hand I hold an inventory of new homes that can’t be sold. Not to mention the excessive existing home inventory. I’m sorry, let me take that last statement back. It will take at least three to five years to unload these babies, we hope. To top it off the sub-prime mortgages that people never would have got in the first place if the companies involved didn’t, you know, overlook the little things like, oh, check incomes and actually look at the documentation provided. “So you and your wife make $300K a year work at McDonald’s? Oh, are you the owners of the restaurant? No? Ok. How about the general manager? No, not that either? Huh. Oh you COOK hamburgers for them. I seeeeee. Well. All of this McDonald’s talk reminds me that it’s close to lunch. And why screw myself out of the good commission over some small details. Your paper work looks good. Loan approved!” Now that’s magic. Until someone pulled the curtain back and saw all of these noncollectable mortgages. So now, this show has come to an end but not until you and me, the American taxpayer, gets to pay for it. I hope you all were entertained. Maybe next time, we can show you how a bunch of clowns can pile out of a little car. Send in the clowns, no don’t bother, they’re already here. The Fed, J P Morgan Chase and Bear Stearns, what an act — they made our money disappear.
My partners and myself are all of the same mind about the current Business Climate situation and the Experts that are spinning the news on television, the Web and in the newspapers. Our agreement is that the Experts are suddenly finding themselves out of touch with the other 325 million people who live in this country. (click here to read more) The Kangaroos are driving the Market by panic calling our Brokers on every water cooler rumor they hear and / or are acting like Daytraders on their home computers at night selling off anything that they think might be running to a fall in the coming days or hours. Yes, it is that easy today to “put a run on the bank” ala “It’s A Wonderful Life” although most, if not all of the 325 million people, have no idea what that term means. The old term was literally meaning that the local bank did not have enough cash on hand to cover all deposits and regular banking business and would have to wait until someone put money IN for some one else to take money OUT. Once word leaked out about the possible shortfall, and it always leaked out, townspeople would run for the bank to take THEIR money out, playing a sick kind of musical chair game trying not to be the last one, the one who didn’t get any money. Using the Bear Stearns Company as a textbook example, the common people lost faith in BSC and it’s future potential to make money for them, so they wanted their stock sold and cashed out. Now. And as more people lost faith ( wasn’t the stock going down? ) more pulled out and they told two friends and they told two friends and so on until the Kangaroos ran BCS out of money. Seems that only people who didn’t know this loss of faith was going on were the Experts. Why? Do you really believe that those people hang around water coolers and coffee pots at the office and trade rumors? Yeah, me either. And so, they don’t know what the Kangaroos are doing, thinking or trading. Some experts.
Ford Motor Company ( F, traded on NYSE, recommended at this time, a stock owned by Kangaroo Money partners ) announced last week the sale of its Jaguar Land Rover operations to Tata Motors of India. This sale will net Ford some very badly needed money, about $1.7 Billion between the purchase price and the pension support payback, but in our opinion this will also allow the company to return to doing what it does best — making American Style cars for Americans. (click here to read more) Ford has been suffering from a lack of imagination and a glut of the same old same old for about 5 years now. By getting back to designing the next generation cars, trucks and SUVs that will be not only more efficient but less oil and gas dependent, Ford will win back the base that it needs to survive as a company. By the end of the 2008 model year, it will become pretty clear to the other auto makers that this attitude is the only thing that will keep them in business and, maybe, making positive money. After all, it is not only car designs and MPG that will make money but also realizing that you can no longer build 3,000 cars a month and sell only 1,000 cars a month. While all of the auto makers have the same problem, more autos built than sold due to powerful unions and preconceived ideas of “that’s the way it always been done”, Ford should be the first company to come to it’s senses and successfully go forward.
So, I’m going to lose my trunk? since the introduction of the Concept Chevy Volt, the General Motors Corporation ( GM, traded on NYSE, not recommended at this time, http://www.gm.com ) has put a lot of resources in making it’s extended-range electric vehicle a showroom reality. The Volt is designed to run on common 110-volt house hold current and with a variety of range-extending onboard power sources, including gas and, in some vehicles, E85 ethanol to recharge the battery while driving. GM estimates that someone who drives less than 40 miles a day, will use zero E85 or gasoline. For extended trips, engineers, estimate a range of 640 miles for a tank and a charge. The Volt is expected to be at the dealerships by November 2010. So, as an investment, GM may be the long play but, what about the aftermarkets? (click here to read more) GM is not the only automaker trying to enter this market. Tesla Motors ( http://www.teslamotors.com/) develops and manufactures electric vehicles. The Tesla Roadster is the only highway capable production electric car of any kind for sale in the United States today. Tesla Motors regular production of the 2008 Tesla Roadster commenced on March 17, 2008, it was first unveiled as a prototype on July 19, 2006. So, again as an investment, does GM and Tesla ( if they go public at some point ), become a long play? But what about the aftermarkets? What about “Old Faithful” sitting in the driveway right now? GM’s battery is roughly 6 feet long and weighs in at more than 375 pounds. The T-shaped battery will be located down the center of the vehicle and across under the rear seats. Will there be an after market to retrofit your current car? You bet there will be, what with all that room in the trunk. If you’re a regular reader here, you know that Kangaroo Money philosophy is to make good investments whether short, medium or long term. So, getting rid of a perfectly car, especially if it is paid off, is not an option. According to Aftermarket Factbook 2005, an estimated $257 Billion was spent on the addition of non-factory parts, accessories and upgrades to motor vehicles in the United States, so the aftermarket does help keep vehicles on the road. Somebody is going to approach one of the battery makers, cut a deal and away we go. Like all great innovations, the concept will start the program at the high end but the real money will be made at the low end. Find those aftermarket manufacturers and that will be where the value is.
