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JEast

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Posts posted by JEast

    Seaspan Insider Buys

    in General Discussion

    Posted

    Yes, thanks for sharing the Maersk presentation.

     

    The slow steaming is helping with the over capacity situation in addition to more vessels going to the scrap yard.

     

    With respect to "super slow steaming", the engine manufactures will likely adjust their future instructions. However, I would not expect many liners to actually use the 10% load as stated as a one year test is too short a period to determine causality. At best, 40-50% will be used by most as lower loads will eventually increase maintenance costs and/or breakdowns.

     

    As for Seaspan, another very acceptable quarter as all counter parties are performing as contracted. Plus, 2010 looks promising for deliveries based on the recent conference call. If so, the big cash flows will start to flow thru in 3rd and 4th quarters of 2010.

     

     

    Cheers

    JEast

    NYSE Euronext -- Thoughts

    in General Discussion

    Posted

    True about the new alternatives and reason Morningstar only gives them a narrow moat status. However, if I look out 2-4 years, will there be more consolidation?

     

    The other item I am looking for is who is going to be the clearing house for the eventual return of engineered financial products like CDS and others not named as of yet. That is or will be a big prize for someone. This new clearing house also may be mandated by the G-8 or G-20 based on future global regulation.

     

     

    Cheers

    JEast

    NYSE Euronext -- Thoughts

    in General Discussion

    Posted

    Just checking to see if anyone had any comments about NYSE Euronext. Much like CME, they appear to have an oligopoly to some degree. Though not super cheap, they do have the captured market and depending on how you value their goodwill, maybe currently at 1x book.

     

     

    Cheers

    JEast

    Overcapacity or Deflation ?

    in General Discussion

    Posted

    I know most are tired of posts about deflation and comments about debt deflation and Irving Fisher, but I just find our current economic situation so very eerily similar to '29-'32 and the Japan experience. Based on the most recent data, it appears the PPI in the attachment below will not be in recovery for sometime.

     

     

    Cheers

    JEast

     

     

     

    Hoisington - 3Q 2009

    in General Discussion

    Posted

    I have been fortunate enough to know about Irving Fisher's theory in -- "The Debt-Deflation Theory of Great Depressions". The more prescient is what he calls the "consequences in nine links" on page 342. I posted these nine points several years ago as one of the bull cases for FFH's bond portfolio when we at one time had a minus $1B or so on a mark to market basis.

     

    Anyway, if one is interested, you might want to read up on the Japan experience via Richard Koo's books "The Holy Grail of Macroeconomics: Lessons from Japan's Great Recession" and "Balance Sheet Recession: Japan's Struggle with Uncharted Economics and its Global Implications."

     

    http://www.amazon.com/Holy-Grail-Macroeconomics-Lessons-Recession/dp/0470823879/ref=cm_cr-mr-title

    http://www.amazon.com/Balance-Sheet-Recession-Uncharted-Implications/dp/0470821167/ref=cm_cr-mr-title

     

     

    Cheers

    JEast

     

     

    Gold Selling House Parties

    in General Discussion

    Posted

    Yes, the Hunt Brothers is what I was referring to, but if my memory serves me, the big push for the advertisements was in the '73-'75 time frame.

     

    Also thinks for the Current TV episode. Current TV is interesting on occasion. As a side note, they have not been in the black yet and Al Gore is one of the major investors.

     

     

    Cheers

    JEast

    Gold Selling House Parties

    in General Discussion

    Posted

    Has anyone heard of such events. Though all of us have probably seen the commercials for a few years of "Sell Your Gold", but I just became aware of such events in houses. It is set up much like a Tupperware or Pampered Chef party.

     

    Would or could this imply we are approaching a top? I thought this was very odd and reminded me of the great silver boom when people were selling their US quarters and half dollars at record amounts.

     

     

    Cheers

    JEast

    What Is The Bond Market Telling Us ??

    in General Discussion

    Posted

    The chorus is nearly unanimous that the dollar will continue to fall, that gold will continue to rise, that inflation is in the not too distant future, and that foreign investors (especially China) will start selling U.S. Bonds. However, the Bond Market appears to be ignoring these apparent facts, as the masses know them, now that the 30-year is on the verge to cross below the 4% mark again (3.99% as I write).

     

    What does the Bond Market know that the chorus does not know?

     

    http://www.bloomberg.com/markets/rates/index.html

     

     

    Cheers

    JEast

    Seaspan Insider Buys

    in General Discussion

    Posted

    Thanks for your previous comments.

     

    To make my thesis as simple as possible, this is mainly a replacement value play. Even with the depressed prices for assets, the replacement costs to have what SSW already has on the water is above the current selling price. Anyone can make the argument (as the market has) that the liners are going to walkaway from their charters much like ZIM has done to Danaos or that the banks will withdraw credit. However, with respect to the former, Maritime Law is on Danaos' side as I read it as the owner can just keep the cargo for unpaid bills if they want to.

     

    The other point is that SSW is really leveraged to China companies and indirectly to the Chinese government which makes me believe that these companies will not walkaway but will maintain the status quo. Also, China is expanding and they want solid partners. If you can obtain a very cheap asset then one does not have to ask for as high a charter rate either to get the same return. Plus many liners want to de-leverage their balance sheets (like COSCO) and that is what SSW is there to do.

     

    Whether SSW buys new assets, or not, really just depends on price. I would not suspect any action for the remainder of the year as they are building their surplus, but would not be surprised for some activity in the first six months of next year. Again, I am agnostic if it is a positive or negative as it depends on the price and what they will do with the new asset. Also, this is a long-term investment as it is going to take some time. However, I am of the believe that as one looks back five years, or so, much like FFH, one will think the $5-$8 range was very cheap.

     

    As a side note, the previous article about $20M for 6,500TEU appears to have just been a rumor, but we shall see.

     

     

    Cheers

    JEast

    Seaspan Insider Buys

    in General Discussion

    Posted

    As the annual meeting was over the weekend, I was looking for an announcement so I guess this was it. In addition, management promised another announcement before the next quarter's report on the delivery schedule. However, I would assume that this may be the end of deliveries for this year. Next year is the real test as the bigger ships with larger cash flows are due to be delivered based on preliminary comments. If so, the dividend should gradually go back to previous levels sometime in 2011.

     

    The potential real surprise is if Seaspan uses their close relationships with the Chinese banks, which are flush with cash, to maybe buy a few discounted ships over the next 6 months or so. As their current rate on loans is fixed at approximately 6.1%, better deals/rates may be available for the agile management team.

     

     

    Cheers

    JEast

    Where Did the Hurricanes Go ? -- Sun Spots ??

    in General Discussion

    Posted

    We still have time, but as of September 21st there has been no Atlantic land falls this year. We know that this is an El Nino year (though on the mild end) but in a contrary view to the masses of global warming and etc, can record low Sun Spots account for some decreased activity. Based on recent data, we are approaching record sunspot lows.

     

    Much like Darwin, when you see something surprising write it down immediately. I found the following quote very surprising, "The year without a summer, which was 1816, was during a grand minimum in 1800 to 1830 when Europe became cooler", Perry said.

     

    http://www.cjonline.com/news/local/2009-09-20/earth_approaching_sunspot_records

    http://www.global-warming-and-the-climate.com/images/sunspot-lenght-&-teperature.gif

     

     

    Cheers

    JEast

    Japan Catches Thrift Bug

    in General Discussion

    Posted

    Not to beat the drum on deflation in Japan, but can Japan save anymore? Apparently so as the Louis Vuitton bags are no longer in vogue. “I’m not drawn to Louis Vuitton at all,” said Izumi Hiranuma, 19. In addition, Wal-Mart Stores finally turn a profit after seven years. Anyway, thought this NYT article interesting and counter to the last theme we on the board had that excess cash was being spent on luxury items.

     

    http://www.nytimes.com/2009/09/21/business/global/21yen.html?_r=1&partner=rss&emc=rss

     

     

    Cheers

    JEast

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