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On GE, Just Say "No"
Kansas City Southern (KSU) is a nice little railroad company. The stock is up 40% the past six months.
The company is well run and is profitable. Some highlights from the bosses on the 2011 results:
“KCS’s solid fourth quarter put the final touches on a successful 2011,” stated David L. Starling, president and chief executive officer.
For the full year 2011, revenue was a record $2.1 billion, up 16% over 2010. This is the first time that KCS generated annual revenue above $2 billion. Carloads for 2011 were 2 million, the first time annual volumes reached the 2 million threshold.
Full-year operating income was $612 million, a 26% increase over the prior year, and the Company’s 2011 operating ratio was 70.9% compared with 73.2% in 2010. Diluted earnings per share for full year 2011 were $3.00 compared to $1.67 for 2010.
Moody's likes KSU, they just upgraded it a notch to Ba1.
RATINGS RATIONALEWith a rapid restoration in freight volume and yield, Kansas City Southern's credit profile has improved materially.
If this company wanted to raise some cash they could do it in a week. Given their current market cap of $7.5 billion, it could do a secondary offering of stock and raise $100mm in the bat of an eye. If it wanted debt financing, that too would be available from yield hungry investors. Given the strength of the balance sheet, I think they could add another $200mm in debt without much of a problem at all.
But KSU is not going to the capital markets for the money they need to expand. Why should they? After all, Uncle Sam is willing to lend them cheap money: (Link)
Kansas City Southern Railway Company (KCSR) has taken out a $54.6 million Federal Railroad Administration-administered Railroad Rehabilitation and Improvement Financing (RRIF) Program loan to purchase 30 new General Electric diesel-electric locomotives.
I’m so sick of seeing this day after day. Washington is shelling out taxpayer money to support this successful company so they can buy locomotives from GE.
GE pays next to no taxes in the US, they haven’t for years. But when it comes to government money, they are on the top of the list for handouts.There is only one reason that GE keeps sucking on the country’s teat, the CEO is best buds with Obama. Not only are they pals, but GE’s top honcho, Jeff Immelt, is advising the President on what to do. There are many segment of our economy and society that need a helping hand from the government. I would put the interests of GE (and KSU) at the very bottom of the list. They are doing fine, they don’t need these handouts.
This is not an industrial policy. It’s crony capitalism of the very worst kind.
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Hey, now there's an interesting, fact packed article! (which also seems to support my off-the-cuff remarks!). I love ieee spectrum and just discovered it a couple of months ago.
Maybe there is a case to be made for (government encouraging) the rewiring of houses and businesses so they have two separate voltages. The other would be 12v or something like on boats/cars.
Obama and the environmentalsits don't think like that though. They'd much rather wave their wands and watch you jump.
LEDs are NOT 'literally cool.' Have you ever held an led strip that has been plugged in a while? LEDs dissipate a lot of heat; you could fry an egg. Also, LEDs don't disperse light very well; they are directional, which for people who want to illuminate a room, is a problem.
The LED lighting elements aren't hot. I think what you're feeling is the wasted energy associated with transforming the voltage down to what's appropriate for your LED lights - which is why I mentioned that it would be better to run them off lower voltage current in the first place. The chunky plug/transformers at the end of your cel phone charger gives off heat for the same reason.
Different types of electric light are better/worse for different uses which is why it's stupid for the government to try and cram any one of them down your throat.
Well, what else are these public servants good for? For them, everything is pretty much "Open wide!" or if you're lucky, "Bend Over!"
All hail the most competitive country in the world...just where are locomotives built these days and with what % content of made in USA?
GE is buying 15,000 Chevy Volts. How's that for a circle jerk.
Where did GE get their locomotives to sell to KSU?
GE locomotives are manufactured in Erie, PA - a socially conservative, mainly Catholic, but typically democratic voting area. I'll leave it to the reader to calculate the election year politics.
Ooh, can I give it a try?
One employer plus one candidate equals negative infinity for everyone else.
Amiright?
I believe Rick Sanctimonious, I mean Santorum, will gladly continue this deal to steal my money and give it to constituents in PA.
Now we have crony comedian capitalism to boot!
http://news.yahoo.com/blogs/ticket/maher-donates-1-million-obama-super-p...
What a fucking joke that guy is.
he supported Kerry, & Obama's run in 2008, so it should hardly be surprising.
he's a voter, and he's against religion in government, so where else would he "put his vote"?
Hollywood funding. Whadya expect?
His entire Presidency has been like watching an audition for POTUS for the show West Wing.
Another day in the unholy life of the American fascist business model.
Its not crony capitalism. Its rule by gangs and thugs.
Plutocronyistikakistocracy
Fuck GE.
in neo-fascist amrka GE fuck you.
Love that railroad. And if only GE was Crony Capitalism! In fact it's far worse. I'll take the other side of that trade and issue a buy recommendation.
and yet half or more of the commenters here at ZH watch the CNBC propaganda machine of which GE still has a 49% stake
pathetic
Well, I used to, but only because it's worthwhile to see the direction of the daily spin.
Since I pay 5$ a month extra not to have my receiver connected to the mother-ship by phone, they never knew I did it though, so I contribute nothing to their ability to command ad revenues.
KCS will not be that stupid.
Or will they?
Apparently there is money to buy engines which are needed to run the freight which is there. Uncle Sam should butt out of this one.
Are you aware that railroads are the oldest form of federal corporate welfare in the US?
"There are many segment (sic) of our economy and society that need a helping hand from the government."
That's the premise that always has and always will destroy liberty.
Ditch it.
In some ways I'm a Commie at heart. I do think there is a role for government, and I do think that there are some in society who need a hand. I don't think it's as easy as "one of the other".
But there is no doubt in my mind that GE should not be on the list for state sponsored welfare.
Welfare from the barrel of a gun? C'mon Bruce, now why would that ever work?
Personally, I'm old enough to remember when there were truly private charities wholly separate from government (in addition to the ever-present churches). Creeping state entitlements have mostly eliminated these organizations, except for where they've partnered with government (increasing the apparent legitimacy of both).
There are many, many good books written covering how the evil of external government (a.k.a. "enslavement") is not required in order to provide ALL goods and services currently provided by their monopoly.
I cannot imagine the idea that the world needs Hitlers just so it can have Gandhis.
Bravo, Bruce, for your honesty and courage in saying that ... for an American audience that does not understand.
What we know in Europe ... and what you know, as a Swiss citizen yourself ... is that government can work very well if not run by gangsters. For this recent period of history, in some sectors of Europe, we have truly eliminated poverty (for legal residents here), and we have universal health care that works without excessive expense or treatment delays ... we have little crime, almost no one in jail, little oppression by government or lawyers, a maximum of real freedom ... and we do own personal firearms here (which Americans often think is not the case).
And yet we have had thriving economies, partly free-market, but underpinned by a strong universal social protection system. These nine European 'AAA' rated countries that remain, are significantly socialist. But that is nothing new to you, Bruce.
Here in our parts of Europe, even the majority of wealthy people, like yourself, support these semi-socialist arrangements ... they can feel more relaxed and enjoy their own wealthy lives more, because they know, that no one in the society is without the basics of life.
Partly from their ideology, partly from their experience of a harsh crony capitalism, Americans cannot see this. They don't see the government as capable of running a good system for people, and it is certainly understandable why they despair.
What will remain true, is that postwar (north-) Western Contental Europe, achieved what is as close to a human social paradise, as was ever achieved in human history.
It will be sad if these events now unrolling in Europe, succeed in destroying this grand achievement in political economy and society. And sadly, many Americans will never even understand that it happened, that it was possible, and that it has been wonderful.
"...government can work very well if not run by gangsters."
Well, just as soon as the gangsters have all been removed (and successfully barred) from the organized crime syndicate known as government, then just maybe your theory might have merit.
Until such a time though, it's just more incoherent, wishful thinking.
bank guy in Brussels, you just came out of your socialist closet, eh? ;-)
I think I'll repost this as contribution - it would be nr. 13 - sorry for formatting
14 Warning Signs of Rising Fascism
1 Patriotism
4 Supremacy of the Military
7 Obsession with National Security
8 Religion and Government intertwined
13 Rampant Cronyism and Corruption
12 Obsession with Crime and Punishment
9 Corporate Power is protected
10 Labor Power is suppressed
14 Fraudolent Elections
11 Disdain for Intellectuals
15 Secret Police
3 Scapegoats
2 Disdain for Human Rights
5 Sexism
6 Controlled Mass Media
good checklist.
3 + 5 = 8.
In France bureaucracy is not derided. But French bureaucrats have a sense of professionalism that is lacking stateside.
though I remember this case of a French bureaucrat that had only half a brain... still crying and laughing about it... ;-)
here it is http://www.spiegel.de/international/zeitgeist/0,1518,495607,00.html
Love Switzerland. Love my Constitution better.
This is not welfare. Welfare is or should be about survival. This is a subsidy to a profitable and thriving company which I calculate as roughly a $29 million gift to KCS over 10 years.
"and I do think that there are some in society who need a hand."
Of course there are some who need a helping hand. The "commie" premise is that man must be forced at the point of a gun to provde it. That's not only a dismal view of human nature, it's also incorrect. The gun in our faces does zero to enhance our charitable tendencies and, as I'm sure you're aware, the more the government takes from us, the less goes to charity. Without the gun in our faces, we'll be better able to see and help anyone we wish.
Why do commies imagine the streets will be lined with needy bodies if people are free when, in fact, millions and millions of individuals are regularly and systematically destroyed under communism?
The price of living in a society with roads and schools and -- topical to this article -- train tracks, is the existence of a government that has the power to tax and regulate commerce. Take away the elected government and an unelected bunch of thugs will take over in their place and replace the government tax gun with a private tribute gun. This has proved true for the entirety of human history, yet is ignored by ideologues who often live comfortably in their hated "commie" economy. Being in favor of collective action and funding of public works is not communism by any definition other than Rush Limbaugh's. Government corruption should be punished. If you want a society without government, move to Somalia.
Why are you adding train tracks? They are privately owned by the railroads. Railroad tracks are not a part of the public infrastructure in this country.
Uncle Warren would probably be all for the public doling out funds to maintain his tracks.
The railway system was built largely through government bonds and grants of government land. Like so many things in this country, it would not exist but for the pooling of resources by the citizens for the benefit of all.
As usually you choose to conveniently ignore certain points... like were those government bonds ever paid back or defaulted on? Or are we still rolling these as of today?
In other words were these resources pooled in an economic viable way or not?
Does economic viability even play a role in your thinking, or is it again some bureaucrat (a super-genius, just by defintion) deciding on that?
How would that be if we built it today - or for the Cali highspeed rail??
"it would not exist but for the pooling of resources by the citizens for the benefit of all."
You mean, rich people with political pull got the politicians to force the citizens to pay for railroads instead of footing the bill themselves?
True, but that was >125 years ago and the companies own the infrastructure. No need to subsidize the railway company shareholders' divvies by lathering on the .gov largesse. It has made me cringe to hear people, including congressmen, mix rail maintenance in with references to public infrastructure. There is either a hand out somewhere or widespread ignorance of who owns those tracks.
This is similar to referring to Medicaid in the same breath as Medicare and Social Security. The first one is purely welfare the second two are supposed to be government-run quasi insurance programs that pay out benefits to those who qualify by having paid in for a certain minimum period. For some, it pays to choose to confuse.
I'll stay right here and argue for liberty, thanks.
I don't want a society without government. I want a society that enforces the rule of law. In US society, the rule of law is based on the Declaration and the Constitution. The railroad and lunch lines aren't in my copies.
Some people want more government. They can expect an argument for a while longer.
So let's say we did away with taxes. Who pays for the judges that enforce your rule of law? And the courthouses and the jails and the sheriff who is called on to enforce your civil judgments. And what will stop GE from bribing any and all of these officials like they do the current government? What will stop GE from seeing that GE friendly people take the top positions. Not to mention the police and prosecutors who enforce the laws. What will stop GE from paying them a nice bonus if they look the other way when GE takes your land to build a plant. Corruption is an inherent problem in any system. Give me an elected government any day over Somalia's tribal warlords. And you can put away your strawman that I want "more government." I want less government too and believe we need to reign in the corruption. Despite what you may hear on talk radio, most of us you label "commies" are very much against our police state. We just see shades of gray and complex problems with complex solutions.
Let's say no one said anything about doing away with taxes. Let's say some of us want the federal (and state) governments activities limited to protecting individual rights and defending the nation against the initiation of force and fraud. GE couldn't bribe anyone in government if the government hadn't grown beyond its charter to be the "manager of the economy."
Separate the economy and state and GE would have to compete.
Now, if we can get the government whittled down to its intended role, then we can talk about voluntary taxation. If you love the system of government you live under, would you pay to keep it functioning? I would.
Unfortunately, LetThemEatRand's standared MO whenever anyone calls for less government, is to provide examples of the ruinousness of having no government... thereby proving (somehow) that having less government cannot work, that you want to live in Somalia, that you're ok watching children starve, that you're a "I got mine, so fuck you" kinda guy, etc.
I can't decide whether he (or she) is a shill or just astonishingly obtuse. Neither option redounds to his/her credit.
You cannot make someone understand something when their business depends on NOT understanding. The Petit Bourgeosie will always support a System that benefits them.
"The gun in our faces does zero to enhance our charitable tendencies and, as I'm sure you're aware, the more the government takes from us, the less goes to charity."
These are not the words of someone who merely advocates lower taxes and less government, or if they are then they are extremely inartful. Was he merely calling for a smaller gun?
If you ever read what I say, I routinely call for less government and I rally against the oligarchs, crony capitalism and the police state. Yet you and your cohorts routinely respond to my words by suggesting I want more/bigger government, especially when I point out the merits of collective action in a representative democracy. Most Ayn Rand followers merely want to contribute less so they can have more, and they don't really care how that would be accomplished in practice. You seem to fit that mold quite well.
I don't speak to be artful and I don't follow what you say to know whether you routinely argue for less government. I only sometimes respond to you as you often respond to my small government arguments with big government arguments. I don't ask you to leave your homeland, suggest your ideas are merely regurgitations of talk radio hosts. I assume you are as ardent in your beliefs as you seem to be.
There was an amendment to the Constitution to impose the income tax so clearly I'm not the only one who can see there's a distinction on that score as regards taxation.
"Most Ayn Rand followers merely want to contribute less so they can have more. . ."
Most Ayn Rand followers merely want the government to "contribute" less so everyone can have more.
There. Fixed it for you.
"I don't speak to be artful"
That's fine, but don't complain when people read your words and assume you meant what you said. As for Ayn Rand, she did not care about "everyone" nor did she think that "everyone" can have more. She cared about Ayn Rand -- and openly so. Her entire philsophy was based upon the idea that there is an elite productive class who deserve to have as much as they can gather for themselves, and everyone else. The "everyone else" could go suck it and they were not her problem. If you don't get that from her philosophy, you don't begin to understand what she was really saying.
Yup. That's the rote talking point against her. It's worked for a long time too. People aren't buyin' it anymore, tho. They're buying her books.