• hedgeless_horseman
    07/11/2014 - 16:58
    No signal lights, bank alarms, stores are being robbed for anything of value. You move to your trunk and get you Bug Out bag and start heading home, the best way you know.

Capital Expenditures

Tyler Durden's picture

NFIB Small Business Optimism Fades; Outlook For Economy Plunges





For a brief month of "we've been down so long, everything looks up", the NFIB Small Business survey suggested the 'recovery' was real and so serial extrapolators (throwing out the 'and small business is the engine of job growth' meme) jumped on it as 'proof' that stocks are cheap and bonds should be sold... then comes June data today (and it's a disaster). 6 of the NFIB's 10 indicators decreased, with about half of the decline in the overall index due to less confidence in future business conditions, the report said, with only 2 indicators improving. CapEx dropped, Sales expectations dropped, 'good time to expand' dropped, actual sales dropped with only hiring plans rising (which seems odd in the face of all the negativity in the rest of the survey) - we will see.

 
Tyler Durden's picture

Former Fed Governor, Hedge Fund Billionaire Slam Fed: "Government Fiat Does Not Create Wealth"





"Balance-sheet wealth is sustainable only when it comes from earned success, not government fiat," is the ugly truth that former Fed governor Kevin Warsh (amazing what truths come out after their terms are up) and hedge fund billionaire Stan Druckenmiller deliver in the following WSJ Op-Ed. The aggregate wealth of U.S. households, including stocks and real-estate holdings, just hit a new high of $81.8 trillion. No wonder most on Wall Street applaud the Fed's unrelenting balance-sheet recovery strategy.The Fed's extraordinary tools are far more potent in goosing balance-sheet wealth than spurring real income growth. Corporate chieftains rationally choose financial engineering - debt-financed share buybacks, for example - over capital investment in property, plants and equipment. The country needs an exit from the 2% growth trap. There are no short-cuts through Fed-engineered balance-sheet wealth creation. The sooner and more predictably the Fed exits its extraordinary monetary accommodation, the sooner businesses can get back to business and labor can get back to work.

 
Tyler Durden's picture

Equity Futures Unchanged Ahead Of Today's Quad-Witch





As of this moment, US equity futures are perfectly unchanged despite what has been an almost comical reactivation of the 102.000 USDJPY tractor beam. Considering the pair has been trading within a 75 pips of the 102.000 level for the past month, one has to wonder when and what the next BOJ Yen equilibrium level will be reset to. Oddly enough, even as the USDJPY is very much unchanged, the Nikkei continues to rise suggesting that, as Nikkei reported, the GPIF is already investing Japanese pension funds in stocks. Which is great for the Nikkei catching up with the global bond bubble, what is not so great is what happens when the market realizes that the largest holder (excluding the BOJ) of JGBs is dumping, and the world's most illiquid major sovereign bond market rushes for the exits. Just recall the daily halts of Japanese bond trading from the summer of 2013 - we give it 3-6 months before it returns with a vengeance.

 
Tyler Durden's picture

The Most Stunning Chart From Oracle's Earnings Report





Moments ago Oracle reported that it missed on both the top line ($11.33 billion vs Exp. $11.48 billion), and the bottom line (EPS $0.92 billion, Exp. $0.95). The company didn't blame snow (blaming Snowden would be more appropriate), and yet despite the 6% tumble in the stock price, the miss in operating results was not the most surprising aspect of the company's Q4 earnings release. What was? The following chart breaking down Oracle's quarterly spending on stock buybacks versus capital expenditures.

 
Tyler Durden's picture

Empire Fed Hits 4 Year High Despite Tumble In Employee Index





It was the best of times, it was the worst of times. Empire Fed jumped to 19.28, notably better than the 15.00 expectation and reached highs not seen since June 2010, and up from the 19.01 last month. It doesn't get much better than that - even in the V-shaped recovery off the recession lows: if only sentiment surveys were the same as hard data - the US recovery would never be stronger. Alas, despite all this exuberant cycle high-ness - if only in the eyes of beholders, and certainly not in Q1 US GDP of -2.0%, the number of employees index tumbles from 20.88 to 10.75 and worse still the forward-looking index dropped after 3 months of gains.  However, the worst news, comes for those who continue to, incorrectly, predict a CapEx renaissance: The capital expenditures index fell for a second consecutive month, dropping to 11.8, and the lowest since February.

 

 
Tyler Durden's picture

Here Are The Funniest Quotes From BofA As It Throws In The Towel On Its "Above-Consensus" GDP Forecast





It is hard not to gloat when reading the latest embarrassing mea culpa from Bank of America's Ethan Harris, who incidentally came out with an "above consensus" forecast late last year, and has been crushed month after month as the hard data has lobbed off percentage from his irrationally exuberant growth forecast for every quarter, and now, the year. As a result, BofA has finally thrown in the towel, and tongue in cheekly admits it was wrong, as follows: "our tracking model now suggests growth of -1.9% in 1Q and 4.0% in 2Q for a first half average of just 1.0%.... Momentum is weak, but fundamentals are strong. We have lowered second half growth to 3.0% from 3.4%."

 
Tyler Durden's picture

Shale Boom Goes Bust As Costs Soar





"Traditionally we’ve been a financially conservative company," explains one fracking company, warning that "we’ve become more leveraged than we historically have been and we’ve become uncomfortable with that." This is the growing message from a shale boom that, as Bloomberg reports, is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground. As everyone chases the dream, well counts have soared and production per well has tumbled. "The list of companies that are financially stressed is considerable," warns one analyst as shale debt has almost doubled over the last four years while revenue has gained just 5.6% "not everyone is going to survive. We’ve seen it before."

 
Tyler Durden's picture

If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Devastating For The US





Does the economy move in predictable waves, cycles or patterns?  There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States.  Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades.  Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn.  So will the period of 2015 to 2020 turn out to be pure hell for the United States?  We will just have to wait and see.

 
Tyler Durden's picture

Whole Foods Misses, Lowers Guidance, Or What Happens When You Ignore Buybacks At The Expense Of CapEx (Hint: -10%)





While we recently roasted IBM for engaging in an unsustainable debt-funded buyback program, in which IBM has used every dollar of debt issued since 2012 to buyback its stock, moments ago another company showed why management teams would much rather buyback their stock than invest in CapEx in a market that only reward instant gratification in the form of shareholder friendly activity and furiously punishes any attempts to grow for the future.

 
Tyler Durden's picture

"Weaning The Stock Market Off Casino Capitalism Will Be Anything But Pain-Free"





The still-dominant consensus view that America’s economy is poised to single-handedly yank the world out of its lethargy is likely to be disappointed once again with the odds high that our economy will remain burdened by growth-inhibiting monetary policies. In addition, it will continue to be negatively impacted by various other impediments, including a populace that is increasingly under-employed, an unwieldy and inscrutable tax code, a Rube Goldberg-like healthcare system, an increasingly ossified infrastructure, and a regulatory apparatus that congests the lungs of our economy, small businesses... weaning the stock market off of casino capitalism promises to be anything but pain-free. But did any responsible adult really believe there would be no pay-back for all these years of the Fed’s force-fed gains? If you do, you probably also believe foie gras grows on trees.

 
Tyler Durden's picture

Why Stock Market Bulls Should Hope Interest Rates Don't Rise





"Everybody knows interest rates are going to rise." Whether you agree with this premise, or not, is largely irrelevant to this discussion. The current "bullish" mantra is the "great bond bull market is dead, long live the stock market bull." However, is that really the case? When the bond bubble ends this means that bonds will begin to decline, potentially rapidly, in price driving interest rates higher. This is the worst thing that could possible happen.

 
Tyler Durden's picture

This Is Crazy! Current Leveraged Recap Binge Is Clone Of 2007 Mania





This eruption of late cycle bubble finance hardly needs comment. Below are highlights from a Bloomberg Story detailing the recent surge of leveraged recaps by the big LBO operators. These maneuvers amount to piling more debt on already heavily leveraged companies, but not to fund Capex or new products, technology or process improvements that might give these debt mules an outside chance of survival over time. No, the freshly borrowed cash from a leveraged recap often does not even leave the closing conference room - it just gets recycled out as a dividend to the LBO sponsors who otherwise hold a tiny sliver of equity at the bottom of the capital structure. This is financial strip-mining pure and simple - and is a by-product of the Fed’s insane repression of interest rates.

 
Tyler Durden's picture

Facebook Beats But CFO Leaving





  • Q1 revenue $2.5 billion, beats expectations of $2.36 billion
  • Q1 revenue from advertising $2.27 billion
  • Q1 EPS $0.34, beat expectations of $0.24
  • Free cash flow - Free cash flow for the first quarter of 2014 was $922 million.
  • Capital expenditures - Capital expenditures for the first quarter of 2014 were $363 million.
  • Cash and marketable securities - Cash and marketable securities were $12.63 billion at the end of the first quarter of 2014.
  • Monthly active users (MAUs) were 1.28 billion as of March 31, 2014, an increase of 15% year-over-year. Unclear how many of these are bots originating out of Egypt and India.
 
Tyler Durden's picture

Is This What a Credit Bubble Looks Like?





There’s been some buzz recently about a pick-up in business lending. Unlike some pundits, though, we’re not convinced that a surge in business credit is such a good thing. We don’t doubt that more lending to small businesses, in particular, might do some good if it doesn’t go too far. Lending to large corporations, on the other hand, is a different story. Corporations are already borrowing at a pace that’s only before been seen near cyclical peaks...

 
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