prevalou

The argument about BNSF is inaccurate. In 2011, BNSF invests 1.8 B$ more than depreciation. If pretax profit is 5 B$, then pretax free cash flow is 3.2 B$ and after tax free cash flow is 2 B$. So this amount can be distributed to pay claims.

http://www.reuters.com/article/2012/05/04/bnpparibas-results-idUSL5E8G40U220120504?feedType=RSS&feedName=financialsSector&rpc=43 not a catastrophic situation...

I agree with you a Tarp would be better. Spain maybe will need a bail out but its economy is a lot more fragile and less diversified than french economy. In France the problem is the weight of the public sector which prevent private initiatives and slow growth (public spending = 56% Gdp ). This situation goes from bad to worse and nobody wants to change the system. Hopefully this crisis will help to open eyes about the virtues of the private sector.

But in the meantime banks make cash flows (borrowing from the BCE and lending to the states) and the problem will be less accute.

Europe is now inflating via the banking system (3 years facility) . Is it so different from the US? BCE lends to the banks who lend to the states. The problem is undercapitalization of the banking system according to Basel 3. The banks have to raise capital or sell assets.

and its sovereign debt held at 70% by foreigners

that is possible, who knows, but i am more worried about France with an anticapitalist new government

Concerning unemployment in Spain, unfortunately it is not new, the exception were the years 2001/2007 with the euro introduction. http://www.google.fr/publicdata/explore?ds=z8o7pt6rd5uqa6_&met_y=unemployment_rate&idim=country:es&fdim_y=seasonality:sa&dl=fr&hl=fr&q=chomage+en+espagne#!ctype=l&strail=false&bcs=d&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:sa&scale_y=lin&ind_y=false&rdim=country_group&idim=country:es&ifdim=country_group&tstart=512863200000&tend=1328223600000&hl=fr&dl=fr&ind=false

Personal History (Katharine Graham) Steve Jobs (Walter Isaacson)

yes, it is reasonnable to think a better economy will decrease the liability. On the asset side, will the increase in the stock market (30%of the pension plan assets) compensate the decrease in the bond market (70% of the pension plan liabilities) ? It is a tough question.

Sears short term debt was seasonal last year, not this year. That is the problem. I'm not sure the pension gap will vanish with a better economy. The pension fund is invested at 70% in bonds, so an increase in interest rates would be à negative even if the liability side would be positively impacted.

you don't mention Sears debt: $ 3 400 m and the pension plan deficit: $ 2 200 m So with $ 4 000 m cash it remains $ 1 600 m liability.

Seems thoughtful but interesting to read its 2009 february and mars: very pessimistic too...

77 m members today (75m members last quarter)

Paris, France

Spin off of non guarantor subsidiaries ? The one which make money...

Sears versus Office Depot : why not a comparaison with Staples? The secular decline is less certain here... Sears versus european iceberg: sometimes it is better not to hurry . In the european case, there is a complex political process where population has to agree with. If not the consequences of a quick action could be bad. Concerning Sears, it is difficult from the outside to know if 500 or 700 or 1000 stores should be closed. What are the long term IRR of these stores ? Nobody knows except Lampert and his team.

http://www.fundinguniverse.com/company-histories/Teledyne-Technologies-Inc-company-History.html Look at 1974 Teledyne history. It doesn't seem to be pretty! There was a reason for the stock plunge

I don't know if he has zero financial flexibility (borrowing is not the only option). The market thinks so anyway...

Why would Sears borrow money now ? Sears has a credit line, borrowed long term last year 1 B$+ and cuts its inventory through stores closures. What the market tells is interesting but don't forget it's Mr Market.

The case of Teledyne shares repurchases is interesting: -first purchase at 16.38$ on 9/14/72 -second purchase at 10.88$ on 12/13/73 -third purchase at 10.75$ on 5/31/74 -fourth purchase at 7.88$ on 12/4/74 ... I imagine people reaction when he purchased for the 4th time!! Patience is sometimes required...

In insight, it is easy to see what was high and what was low. Time will tell in Lampert case.

He is more like Singleton who bought Teledyne stock at 20, at 14, at every price (everybody was bearish) and the stock soared a couple of years later.

I don't see the point In closing the performing business (Kmart) to concentrate on the less profitable (Sears). Lampert seems to do inverse: close marginally profitable or no profitable stores, be it Kmart or Sears, and concentrate on the more profitable. The 100 to 120 closes stores are about In the same proportion Kmart and Sears.

I did not read In the 10 K a mention that the facility and the bonds were non recourse to the holding.