Boeing Crash and Burn $BA

Boeing (NYSE:BA) my my my. Despite recent news reports and market commentary Boeing is doing rather well. Earnings and revenues are up. Deliveries are still strong. Margins are improving. Passenger air travel will increase driving demand for fuel-efficient new aircraft.

Everything is peachy keen good. No worries. Just buy a little bit more. Yes all the metrics everyone is talking about are positive. so lets talk about the 800 lb gorilla sitting in the room that can disrupt everything.

Oil or more precisely jet fuel JP4 if I have the nomenclature correct.

If oil jumps and stays up the cost or air travel will increase. People will cut back on air travel. air lines will cut back on order purchases etc etc etc.

So its nice to follow the Boeing story. The 787 Dreamliner with its carbon body that flexes on take off is very sexy.

But it comes down to the price of oil which is a geo-political risk that even the most astute and sophisticated businessman cannot manage around.

So yes the new fleet is more fuel-efficient. But a terrorist can drive up the price of oil faster than an engineer can wring fuel efficiency out of the technology.

George Gutowski writes from a caveat emptor perspective.

Starbucks walks into Chinese Buzz Saw. Does cultural icon get it? $SBUX

Starbucks (Nasdaq:SBUX) is expanding all over he world. Starbucks is pretty cool and has been reasonably clever with cultural issues. But they just stepped on a Chinese land mine. State owned media has criticized Starbucks for over charging compared to other prices for comparable products around the world.

Normally who cares? Charge what the market will bear. It is free choice.

China is not a free market. There are reactionary forces who are suspicious of globalism and western influences. Apparently they have some editorial influence in state media.

Starbucks may be guilty of the same mistake Google experienced in China. Not understanding the game properly. Starbucks is in a consumer business where PR and public perception is critical to short and long-term success.

Starbucks has walked into a Chinese buzz saw. They should have seen it coming. The question becomes how do they fix it? How fast can they fix it?

China is too big for Starbucks to abdicate.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Twitter Psychology. How investors will screw themselves. $TWTR, $FB, $LNKD, $GOOG, $MSFT, $YHOO #SEO

OK so Twitter (NYSE:TWTR) will report today after the close. This will be the very last earning announcement before they go public. You can hear the feeding frenzy coming. Surely this IPO will fare better than that last when with Facebook (Nasdaq:FB) taking a huge dump for a whole year.

Here are a few ways that investors will screw themselves with exuberant enthusiasm.

  1. They will dismiss the lack of profitability and ignore that a stock is the present value of future earnings less the present value of near term losses.
  2. They will focus on the wide-screen big picture without clear proof of concept. When TV was in its golden period, Mad Men on Madison Ave knew how to manipulate viewers. Despite hordes of SEO experts no one is turning away business because he or she is so damn good.
  3. The earnings call will try to dampen investor expectations. The market is in a frenzied state as is. Investors in their excitement will ignore management.
  4. Management may lay out what needs to be done by way of capital expenditure to finish building this marvellous money machine. investors will probably ignore this also.
  5. Twitter will not explain how they co-operate with the US Intelligence community. Other countries may sanction Twitter in the future. Significant geo-political risk exists.
  6. Twitter will stick to basics when discussing revenue growth. We all know they will acquire other companies but they will refuse to discuss it now. Twitter will need booster shots of rapidly growing earnings.
  7. Facebook can stop its financial levitation act. Now that it’s north of $50 you can sell it to pay for Twitter. How much higher can Facebook go any way.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Volatility Slow Seduction. Whores must eventually be paid. $VIX, $VXX, $SPX

The market keeps going up. Opinion polls show bullish and you know what that means. Volatility such as VIX and VXX continue to decline as the market goes up and up and up.

Hush my children do not wake from this wonderful dream.

Markets go up and up and up forever. Everything goes in a straight line. Just like an out of control train speeding ever so quickly heading over the rickety bridge over a deep abyss.

The last little bit of sexual climax is the most intense and the most exciting. Eventually your partner in bed will want to be paid. Were you good? was she worth it? She” continue wit the compliments until next time.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti. Needless to say he is not a raging bull. Well at least not today.

Gold $GLD The Pawnbrokers Sneaky Theft.

Gold. Buy Sell Hold or maybe ignore. What are the metrics after the federal debt ceiling crisis goes on hold for several weeks? Will gold go up? How do we know?

Here is one surprising metric which reflects deep cynicism of John Q Public. Pawn brokers seem to be very active encouraging people to bring in their jewelry and get a friendly no interest loan. If you live in a major market in North America pay attention to the advertising pawnbrokers are engaging in.

They are encouraging the financially un-informed to bring in their jewelry. Of course they only deal in todays prices which are down a wee bit shall we say. The squeeze is on and the financially in astute fall for the sell low buy high strategy. Later if they keep their jobs they’ll be back in the market buying high mark up jewelry and start the whole cycle again.

So if you trade Gold and are looking for a market place behaviour pay attention to your local pawn broker and how he advertises. They are all going long at these levels.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

JPMorgan Analyst Hypocrisy Will Jamie Dimon’s Condom Finally Rupture $JPM $C $WFC $GS $XLF $BAC

What’s this about Jamie Dimon’s condom rupturing? So far JPMorgan (NYSE:JPM)has had an enchanted life. Huge regulatory fines that would have crucified most CEO’s and Boards have not been hurtful to the current management structure.

The embarrassing losses of the London Whale and huge costs of new risk management programs are still being digested. Yet the stock has stayed spectacularly strong. Today in a strong rebound market it is up on pre-earnings speculation.

Yet many analysts are anticipating a significant drop in earnings. We all know about the jumbo fines which will be one time events. Look carefully and the mortgage market looks weak. JPMorgan results are weak and expected to stay weak.

This bodes poorly for JPMorgan, other banks and the economy.

If you believe in the law of unintended consequences; has Jamie Dimon’s condom ruptured.

Please discuss among yourselves.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Twitter More Valuable than Stupid Facebook Read Smart Reasons Why $TWTR $FB $LNKD

Business Insider or BI as some know it by published an interesting piece on Twitter. Now with the recent run up of Facebook (Nasdaq:FB) and the probable IPO for Twitter (TWTR) there is lots of speculation and comparisons of the two.

Personally I find Twitter easier to use and more useful for stocks and investments. But don’t let me influence you or your choice to buy into a hot IPO which may or may not increase your wealth. But the BI article covers 106 Finance People to follow on Twitter. I don’t think there is a corresponding article for Facebook.

Here is the link to the article. Enjoy.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti