Tidbits

[dwy000]

13 minutes ago, Dinar said:

No, it is ge/safran joint venture 

Right but CFM engines are made in either France or North Carolina.  Why would they not sell engines to a customer who wants them?  That might be the most reliable part of the plane.  

[Dinar]

26 minutes ago, dwy000 said:

Right but CFM engines are made in either France or North Carolina.  Why would they not sell engines to a customer who wants them?  That might be the most reliable part of the plane.  

Because us government will forbid it

[dwy000]

49 minutes ago, Dinar said:

Because us government will forbid it

I'm not sure IF the US govt could forbid a JV with manufacturing in France from selling $bns of goods to another country but more importantly, why would they.  It would encourage China to develop an alternative to what is possibly one of the most dominant American technologies in the world. 

Edited April 28, 2025 by dwy000

[Dinar]

30 minutes ago, dwy000 said:

I'm not sure IF the US govt could forbid a JV with manufacturing in France from selling $bns of goods to another country but more importantly, why would they.  It would encourage China to develop an alternative to what is possibly one of the most dominant American technologies in the world. 

Dude, you think China has not tried to develop an aircraft engine?  Do you know how difficult it is?  Russia which had a thriving aerospace industry no longer produces its own planes (Sukhoi regional is an exception) nor its own engines.  And yes, US could absolutely forbid the JV from selling planes - first step is to prohibit sale of US/GE made products into JV and then the JV is over and Safran has to produce stuff that GE has produced before.  

[dwy000]

2 hours ago, Dinar said:

Dude, you think China has not tried to develop an aircraft engine?  Do you know how difficult it is?  Russia which had a thriving aerospace industry no longer produces its own planes (Sukhoi regional is an exception) nor its own engines.  And yes, US could absolutely forbid the JV from selling planes - first step is to prohibit sale of US/GE made products into JV and then the JV is over and Safran has to produce stuff that GE has produced before.  

The JV makes engines from scratch, it's not a contribution of parts from each.  Safran could also just produce engines on its own and sell then to China. Or Rolls Royce

 

And if you don't think China can make a jet engine if they put the resources into it you haven't been paying attention. 

Edited April 28, 2025 by dwy000

[Dinar]

20 minutes ago, dwy000 said:

The JV makes engines from scratch, it's not a contribution of parts from each.  Safran could also just produce engines on its own and sell then to China. Or Rolls Royce

 

And if you don't think China can make a jet engine if they put the resources into it you haven't been paying attention. 

O'k, we will have to agree to disagree.  Rolls Royce does not have an engine for the narrow body market right now, not clear if they will be able to develop one. 

[Fly]

6 hours ago, Dinar said:

Who do you think will buy the Chinese planes?  By the way, the moment GE/Safran/Pratt stop selling engines to China, how will Comac fly?

Chinese airlines will buy them. That alone is enough of a market to really hurt Airbus/Boeing and sustain COMAC. Before too long they will have their own aircraft engines in production as well. Jon Ostrower had some comments to this effect on this recent episode

 

https://podcasts.apple.com/us/podcast/the-air-show/id1735858856?i=1000704018934

[bizaro86]

3 hours ago, Dinar said:

Dude, you think China has not tried to develop an aircraft engine?  Do you know how difficult it is?  Russia which had a thriving aerospace industry no longer produces its own planes (Sukhoi regional is an exception) nor its own engines.  And yes, US could absolutely forbid the JV from selling planes - first step is to prohibit sale of US/GE made products into JV and then the JV is over and Safran has to produce stuff that GE has produced before.  

 

They have a space station, and have been rapidly taking over the manufacturing of literally everything. It isn't impossible and if the USA forced them to do so they would.

[Spekulatius]

9 hours ago, Dinar said:

Yes it does.  People who are sloppy in one area, tends to be sloppy everywhere.  The work is probably riddled with mistakes, it is just that they are not as obvious.   (I am not defending tariffs, my point is that this research is garbage.)  Cuts in government jobs are necessary, tariffs on Canada are hard to understand.  There are millions of households where someone is employed either directly or indirectly by the government.  If 25% of these households are worried that they will lose income, most of these households will cut consumption materially.  These households also tend to be high income households.  A friend's brother has been a lawyer for the IRS for more than a decade and the brother's wife is a nurse.  The IRS guy is worried that he will be fired and they have started to cut consumption.  

The end result is that consumer confidence is tanking which is what matters, not as much why, imo. The consumer confidence tanking sometimes precedes recession and sometimes not. It has not been a bulletproof indicator if such a thing exists.

[Spekulatius]

40 minutes ago, Fly said:

Chinese airlines will buy them. That alone is enough of a market to really hurt Airbus/Boeing and sustain COMAC. Before too long they will have their own aircraft engines in production as well. Jon Ostrower had some comments to this effect on this recent episode

 

https://podcasts.apple.com/us/podcast/the-air-show/id1735858856?i=1000704018934

That’s how it will start, then other countries airlines (Asia, Afrika)  will buy them, if they are good enough and cheaper. This is even more so true if Airbus/ Boeing can’t deliver. I think also that China will also figure how to make their own engines, but that will come later.

 

10 years from now, I am fairly certain that COMAC plains will compete with Airbus/ Boeing. if we have learned on thins is that the Chinese can figure out how to make things, if they put enough effort in it, Building their own airplanes ought to be one of the long term goal as it’s also a dual use tech (military & commercial). The Chinese have building blocks like high tech manufacturing in scale, electronics, material science in place to do this. It will take time but eventually they will get there, imo.

Edited April 28, 2025 by Spekulatius

[Dinar]

2 hours ago, Fly said:

Chinese airlines will buy them. That alone is enough of a market to really hurt Airbus/Boeing and sustain COMAC. Before too long they will have their own aircraft engines in production as well. Jon Ostrower had some comments to this effect on this recent episode

 

https://podcasts.apple.com/us/podcast/the-air-show/id1735858856?i=1000704018934

Cool podcast, thank you.

 

I don't think anyone but the Chinese will buy them.  India will not, neither will the rest of Asia, since China has disputes with Vietnam, India, Philippines, Japan, Taiwan.   We will have to agree to disagree, I think it is a lot harder to do it than you think.  Engines are even harder.  Time will tell you is correct.

Edited April 29, 2025 by Dinar

[Spekulatius]

I thought this would take a little longer:

https://www.dw.com/en/denmark-says-goodbye-to-letters/video-72354102

[james22]

10 hours ago, Spekulatius said:

I thought this would take a little longer:

https://www.dw.com/en/denmark-says-goodbye-to-letters/video-72354102

 

So much for Forever Stamps as a store of value.

[Spekulatius]

Now we know why UNH has been so weak:

https://www.businesswire.com/news/home/20250513712025/en/UnitedHealth-Group-Announces-Leadership-Transition

[Hektor]

https://www.wsj.com/business/deals/dicks-sporting-goods-nears-deal-to-buy-foot-locker-7ecf9194

 

Dick’s Sporting Goods Nears Deal to Buy Foot Locker

The sides are discussing a deal for about $24 a share, or $2.3 billion.

[james22]

On 5/13/2025 at 6:06 AM, Spekulatius said:

Now we know why UNH has been so weak . . .

 

 

[Saluki]

 

Interesting discussion in here about the FTX bankruptcy. He bought a bunch of the claims against them based on the valuation of their prior investment in Antrhopic and turned about $2mm into $15mm.  Interestingly, some shady person sold one of the claims twice. The hedge fund wanted to split it with him, but he said no. In law school, you learn that this is called the "race to the courthouse." The first guy who files will get 100% and the second guy will get 0%.  

[Spekulatius]

Laurent Perrier LPE.PA trading for a price/ book value of ~1 and a 12x PE. The business could literally be liquidated into champagne  and owner would be OK:

https://www.finance-groupelp.com/sites/files/lpfinances/publications/2025/Communiqué_financier_en.pdf

 

FCF is weak though because they carry more than 2 year worth of inventory on the books.

 

(I don’t own it)

[DooDiligence]

Shots fired.

 

https://www.cnbc.com/2025/05/26/chinas-byd-sees-shares-plunge-8percent-as-ev-maker-cuts-prices.html

[DooDiligence]

https://www.reuters.com/business/autos-transportation/toyota-industries-accept-toyota-groups-42-billion-offer-nikkei-reports-2025-06-02/

 

Toyota Industries is essentially the original company from which Toyota Motors was spun off, and makes things like looms, forklifts, industrial machinery, engines, and even some cars for Toyota Motors. They're basically the same company and have always operated that way, it's just through an odd twist of history that they never formally merged. Toyota is fixing that now.

 

There are three relevant entities here — Toyota Group, Toyota Motors, and Toyota Industries:

 

Toyota Group is a Keiretsu, meaning a collection of different companies which operate in alignment — think of a flock of birds or a school of fish all going in the same direction. One does steel, one does glass, one does strategic investment, one does marine shipping.. but they all co-operate to achieve same-results.

 

Toyota Motors is one of those group companies and the one that makes cars. That's the Toyota you probably think of when you think 'Toyota'.

 

Toyota Industries is another company in the group, and makes parts of cars (engines, doors, dashboards) and a bunch of industrial things to support the making of cars — robots, forklifts, looms, metal stamping machines. A significant portion of this goes to Toyota Motors, but a lot of it goes to other companies too. You can buy a Toyota Industries Forklift yourself.

 

Toyota Motors is now buying Toyota Industries, and that's about it. Toyota Group is still Toyota Group, Toyota Motors is just absorbing Toyota Industries, which previously operated like a separate company because it was technically a separate company.

 

HT to: https://www.reddit.com/user/Recoil42/

Edited June 3, 2025 by DooDiligence

[Hektor]

1 hour ago, DooDiligence said:

https://www.reuters.com/business/autos-transportation/toyota-industries-accept-toyota-groups-42-billion-offer-nikkei-reports-2025-06-02/

 

Toyota Industries is essentially the original company from which Toyota Motors was spun off, and makes things like looms, forklifts, industrial machinery, engines, and even some cars for Toyota Motors. They're basically the same company and have always operated that way, it's just through an odd twist of history that they never formally merged. Toyota is fixing that now.

 

There are three relevant entities here — Toyota Group, Toyota Motors, and Toyota Industries:

 

Toyota Group is a Keiretsu, meaning a collection of different companies which operate in alignment — think of a flock of birds or a school of fish all going in the same direction. One does steel, one does glass, one does strategic investment, one does marine shipping.. but they all co-operate to achieve same-results.

 

Toyota Motors is one of those group companies and the one that makes cars. That's the Toyota you probably think of when you think 'Toyota'.

 

Toyota Industries is another company in the group, and makes parts of cars (engines, doors, dashboards) and a bunch of industrial things to support the making of cars — robots, forklifts, looms, metal stamping machines. A significant portion of this goes to Toyota Motors, but a lot of it goes to other companies too. You can buy a Toyota Industries Forklift yourself.

 

Toyota Motors is now buying Toyota Industries, and that's about it. Toyota Group is still Toyota Group, Toyota Motors is just absorbing Toyota Industries, which previously operated like a separate company because it was technically a separate company.

 

HT to: https://www.reddit.com/user/Recoil42/

Good luck to them. I have heard about a guy who tried to do this (among other things) at another automaker, but fled in a music instrument box 

[nsx5200]

The Toyoda are true principals of these companies, and not just a hired agent.  That and their name is attached to these companies.  Makes a world of difference.

[Spekulatius]

Jimmy Carter, the great deregulator:

https://www.theregreview.org/2023/03/06/dudley-jimmy-carter-the-great-deregulator/
 

He deregulated Banking, trucking, railroad, air traffic. He also pointed Paul Volker as Fed chairman. interesting. Many people will say that Carter was the worst president in history but may be he was just unlucky and never saw the payoff of those actions and the benefits accrued under Reagan.

[Blake Hampton]

30 minutes ago, Spekulatius said:

Jimmy Carter, the great deregulator:

https://www.theregreview.org/2023/03/06/dudley-jimmy-carter-the-great-deregulator/
 

He deregulated Banking, trucking, railroad, air traffic. He also pointed Paul Volker as Fed chairman. interesting. Many people will say that Carter was the worst president in history but may be he was just unlucky and never saw the payoff of those actions and the benefits accrued under Reagan.

 

One of the most underrated presidents of all time.

 

Basically gave Reagan a layup, and turned him into the average republican's god.

[Spekulatius]

2 hours ago, Blake Hampton said:

 

One of the most underrated presidents of all time.

 

Basically gave Reagan a layup, and turned him into the average republican's god.

I think Carter is underrated and Reagan is overrated, at least relative to how they are regarded right now. Carter didn’t now how to sell himself while Reagan was a showmen. Carter also got unlucky with Tehran and hostage affair as well the Russian invasion in Afghanistan. Reagan the strongman was all about appearance and to be fairly as a clear putting up a good show is part of the job and he was good at it. But he also had the Iran contract affair, Sky high high fiscal deficits (for that time) and it was in the 80’s that the common man lost purchasing power and the wealth inequality started to increase substantially. So my take is that Carter wasn’t as bad and Reagan not as good as people think, I think historians over time will take a more balance view than currently in the future.

Edited June 6, 2025 by Spekulatius