I love it when things work out!
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Bob, Very intriguing and important video. Thanks. Randy
downside up....very insightful post. Glad to hear from you. This whole market slide is pretty scary....but presumably when/if things turn around there will be some pretty big money made.
Knowing when to invest liquidity is pretty tough. We shall see.
Feel free to share additional thoughts and companies that fit the general guidelines we're using.
Thanks.
Randy
Just wait. How exciting to think about the future. I remember reading a story after it looked like Obama was going to win that a lot of gun stores were getting sold out of tachtical weapons.
We shall see.
Randy
Biz....I think you might be overstating the case. AS I recall BLLB acquired the public entity now known as BLLB in August/September 2007....
The only reason the charts might make it look like it once traded that high is by major and perhaps multiple reverse splits.
That being said...what will become of the future of BLLB is the question. Will the company move forward? Survive? Prosper? Will they become more shareholder friendly? If we knew the answer to these questions...we'd know what to do and what to recommend to our friends and family.
Later.
Randy
Hey IACPA.....care to share your thoughts about the latest financials. You comments on the last 10Q were pretty astute. :)
Randy
I still say that something besides the stock price is up. From they way this is trading, I'm predicting a close above 3 cents.
Randy
Well Folks...I guess we keep on waiting.
The stock has been trading a bit lower on the bid side lately. My guess is that there are probably some folks finally giving up on eNucleus and trying to offset some gains....well--that might be assuming too much. There must be some people with gains to offset....somewhere.
At any rate, I'm still checking every now and then to see if the website is back up or any filings are made. So far...nada. Maybe one of these days....weeks....or months. :)
Regards,
Randy
Will do Dan....I've been reading and rereading the 10Q and I'm thinking that it is better than my first impressions.
1. While Accounts Receivables have gone down, accounts payable have also. When I first read the 10Q I had thought Accounts payable had gone up $2 million bucks...but that was comparing September 30, 2008 to December 31, 2007....not the beginning of the last quarter. Pretty good sign.
2. Cash position has actually improved. Although the cash on hand is $247K less than June 30, but there's $215K additional cash being held in restricted cash. The not about Restricted Cash only mentions the $10K being held for credit card transactins. My guess is cash has been restricted for product manufacture or acquistion--in otherwords its already committed somewhere. If you add these two together our cash position remains about the same.
3. I was also very appreciative of revenue break down. It is clear that our big seller is Riddex. We can now see which other products are major and minor revenue generators.
4. I think things are setting up pretty good for the Forth Quarter and 2009.
I'm not saying there are not reasons for concern. But all things considered this train is still moving down the track and just might be picking up some speed.
Regards,
Randy
I'll take Pittsburg for week 12
How about that trading before the close. I wonder if there's more news coming tomorrow? Whenever indiscriminent buying comes in like this...people are wanting to own the stock at whatever price....and usually there's a reason for that.
Guess maybe we should have bought some of those penny shares.
Randy :)
That's the big question....just like it used to be the stock that continued going up....this one now seems to be the one that keeps going down.
When it started trading below $30 I thought wow....time for an option play....then at $25 and now at $20....Now I don't know what to think.
RK
It doesn't rhyme with deep doodoo, but is a varient of the same. :)
It was mostly tongue and cheek and struck me as funny. Unfortunately, there are some pretty big questions about the future and how things will work out.
Regards,
randy
Agreed. I most just thought it was pretty funny.
Doesn't really sound like JFSAG......
More like DSAC.
Randy
Unlike the post in your link....this is not a joke. :)
IMPORTANT ANNOUNCEMENT
DUE TO RECENT BUDGET CUTS, STOCK MARKET COLLAPSE, HOUSING MARKET
COLLAPSE, BANK RUNS AND BANK STOCK COLLAPSE, MORTGAGE AND CREDIT
SQUEEZE, AND THE RISING COST OF FUEL, FOOD, AND ELECTRICITY WE
WANTED TO LET YOU KNOW THAT:
THE LIGHT AT THE END OF THE TUNNEL HAS BEEN TURNED OFF.
WE APOLOGIZE FOR ANY INCONVENIENCE.
This not a joke:
IMPORTANT ANNOUNCEMENT
DUE TO RECENT BUDGET CUTS, STOCK MARKET COLLAPSE, HOUSING MARKET
COLLAPSE, BANK RUNS AND BANK STOCK COLLAPSE, MORTGAGE AND CREDIT
SQUEEZE, AND THE RISING COST OF FUEL, FOOD, AND ELECTRICITY WE
WANTED TO LET YOU KNOW THAT:
THE LIGHT AT THE END OF THE TUNNEL HAS BEEN TURNED OFF.
WE APOLOGIZE FOR ANY INCONVENIENCE.
Still some reasons for concern.....
RISK FACTORS (Summary from Page 31)
1. With Emus' resignation this leaves Melissa as the only officer and director.
2. The global financial crisis could affect our ability to access capital and do business
3. Recurring losses and limited cash raise ongoing concern questions. Potential dilution to current shareholders.
My thoughts..
RE #1. Emus departure is a non-issue.....future seats available to those who will participate in the future of the company.... perhaps via financings or acquisitions.
RE #2. This is a concern for every public company that exists.
RE #3. We've been walking on this tight-rope for a while and I'm hopeful she will be able to continue.
Overall, I'm hopeful. Perhaps greatest concern is the continued increase in Accounts Payable dispropotionate to our accounts receivable. We shall see.
Randy
Interesting statement in 10Q
Results of Operations - Comparative Three-Month Periods Ended September 30, 2008 and 2007
Our financial statements are consolidated to include the accounts of the Company and our wholly owned subsidiaries, TMK Holdings, Inc, a Florida corporation, Consumer Dynamix Corp, a Florida corporation, ProCede Corp, a Florida corporation and TV Short Force, Inc., a Florida corporation. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report and our audited financial statements and accompanying notes and the information set forth under Item 7 “Management’s Discussion and Analysis or Plan of Operations” included in our Annual Report on Form 10-K for our fiscal year ended December 31, 2007.
We recognized a net loss of $(116,592) for the three months ended September 30, 2008, a 424% increase as compared to $(22,230) for the same period in 2007. The losses in the current period are due primarily to the Company’s buyout of an agreement with the founder during the third quarter which is reflected in our general and administrative expenses.
Net revenue increased $6,242,346 or 183% to $9,658,289 for the three months ended September 30, 2008 as compared to $3,415,943 for the three months ended September 30, 2007.
Sounds like Kevin Sepe has been bought out. Looking for more data.
This might explain how Outstanding shares could actually have been reduced....(not positive....but at least from my estimate.)
Randy
Hey Guys....we have a filing out....
http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?dcn=0001193125-08-237223
Summary Data:
Revenue $9.8 Million in Revenue (broken down by category)
Net Loss $116K (waaaayyy Better)
As of Sept 30, 2008 91 Million Shares outstanding (not sure how they did that)
More later.
Randy
I don't believe our conversation is really going any where. I think you've become blind to truth and are following the herd of pseudo-intellectualism (II Corinthians 4:1-8).
"The fool says in his heart, 'There is no God.'" Psalm 14:1
Later repeated word for word....
"The fool says in his heart, 'There is no God.'" Psalm 53:1
I hope at some point you come to see the Way, the Truth and the Life.
Hopefully ever faithful.
Randy
I agree. I've seen a number of stocks get dumped on all of a sudden and I think it is for this very reason.
As they say, cash is golden. Lots of people locked into loosing positions.
Randy
Q3 Results... GOOD NEWS.
Zanett Reports 32% Revenue Growth in Third Quarter
Friday November 14, 8:00 am ET
--Record Quarterly Revenue, Positive Net Income and Improved Gross Profit Margins--
Conference Call Today, November 14, 2008 at 11:00 am EST
NEW YORK--(BUSINESS WIRE)--Zanett, Inc. (NasdaqCM: ZANE), a leading consulting firm specializing in business process outsourcing (BPO), IT enabled services (ITES), and information technology (IT) serving Fortune 500 corporations and mid-market companies, has announced its financial results for Q3 and nine months ended September 30, 2008.
Financial highlights for Q3 and first nine months of 2008 include:
32% revenue growth led to a record $12.6 million in Q3 2008 vs. $9.6 million in Q3 2007.
23% revenue growth to $36.9 million in the first nine months of 2008 vs. $30.0 million in the comparable 2007 period.
Gross profit margins for Q3 2008 increased to 31.8% from 23.4% in the same period 2007 .
Operating income improved to $535,000 in the Q3 of 2008 vs. an operating loss of $330,000 in the same period in 2007. Nine-month operating income was $1.0 million in 2008 vs. an operating loss of $1.0 million in the 2007 nine-month period.
Operating income from continuing operations improved to $174,000 in the third quarter of 2008 compared with a loss of $823,000 in the third quarter of 2007. For the nine-month period of 2008 the company had an operating loss of $127,000 compared with a $2.4 million loss in the 2007 nine-month period.
Earnings per share from continuing operations was $0.02 for the 2008 third quarter compared with a loss of $0.12 per share in the comparable 2007 period. For the nine-month period, the company’s loss per share from continuing operations improved to $0.03 in 2008, compared with a loss per share of $0.33 in the comparable 2007 period.
Cash provided by operating activities in the first nine months of 2008 reached $535,000 vs. cash used in operating activities of $783,000 in the comparable period of 2007.
The company paid down $8.3 million in debt in 2008.
Net interest expenses decreased by 27% in Q3 2008, vs. the comparable period 2007; for the nine month period the decrease was 16%.
GAAP profitability continued into Q3 2008.
Claudio Guazzoni, Chairman and CEO of Zanett, said, “We set our goals high this quarter, exceeded our expectations and attained record quarterly revenue, all this, despite the poor economic conditions that have plagued our economy. Our improvements this quarter resulted from new customers as well as expanding our business with existing customers. Significantly, during the quarter we added several new contracts, with a combined total of nearly $7 million. Much of our growth during the quarter was a direct result of steps we put into place in early 2007, including the alignment of our different Oracle platforms. The alignment has enabled us to expand our national practice expertise, and we believe it will help us implement future efficiencies, improve our bill rates, and better position us for growth.”
Mr. Guazzoni continued, “We anticipate continued improvements throughout the fourth quarter and beyond, through expanding our business with existing clients as well as from new customers. We also continue to seek acquisitions, and believe that today’s economic environment presents us with solid opportunities as valuations become more attractive.”
Dennis Harkins, President and CFO of Zanett, said, “Our emphasis on increased marketing activities during the year has paid off in terms of revenue growth, as we achieved record quarterly revenue with dramatic increases in gross profit margins. Late last year we made a strategic decision to target our efforts on those industries that are experiencing greater economic health, in order to enhance revenue opportunities while minimizing our risk. Those efforts have paid off as has been demonstrated in our results. We provide our clients with not only strong Oracle-centric technology, but also with an exceptional ROI and help them deliver profitable results. Importantly, the strong relationships that our staff has nurtured with our existing clients have also provided a very health recurring revenue stream.”
Mr. Harkins continued, “Our recently announced letter of intent to acquire PS GoLive, which we expect to close soon, demonstrates our commitment to develop world-class Oracle/PeopleSoft capabilities and provides yet another platform for us to further improve our business. Our acquisition strategy remains focused on businesses that would enable us to expand our geographical footprint as well as on those that would help us expand our Oracle business.”
Conference Call
Management of Zanett will host a conference call today at 11 a.m. EST to discuss the company’s financial results and achievements. Those who wish to participate in the conference call may telephone 888-335-6674 from the U.S. or for international callers, 973-321-1100, conference ID# 72702236, approximately 15 minutes before the call. A digital replay will be available approximately 2 hours after the completion of the call by telephone for two weeks and may be accessed by dialing 800-642-1687, from the U.S., or 706-645-9291, for international callers, conference ID# 72702236.
About Zanett, Inc.
Zanett is a leading business process outsourcing (BPO), IT enabled services (ITES), and information technology (IT) consulting firm serving Fortune 500 corporations, mid-market companies, and highly classified federal agencies involved in Homeland Defense and Homeland Security. The company has historically operated in two segments, Government Solutions and Commercial Solutions. With the sale of its Government Division, Zanett will focus exclusively on its Commercial Solutions business.
The Commercial Solutions segment provides BPO, ITES, IT and Management Consulting Services, as well as delivers custom business solutions that integrate and implement Oracle's full suite of product offerings - Oracle, JD Edwards, PeopleSoft, Seibel, together with associated Oracle Fusion technologies. A wide range of industry-focused delivery expertise is provided to clients, including Managed Services, Enterprise Applications, Business Intelligence, SOA, and Middleware Technologies. Zanett also provides full infrastructure and application hosting, utilizing local and international resources, remote and onsite DBA support, all on a 24x7 basis.
Zanett currently employs over 228 people nationwide, is headquartered in New York City, and operates out of 8 offices (Atlanta, Boston, Cincinnati, Detroit, Indianapolis, Jacksonville, New York City and the Philippines). For more information, please visit http://www.zanett.com.
CNEH.OB Great News and the price of the stock goes down. Go figure this market. :) What does this bring us to a PE of 3 or 4??
Amazing.
Randy
http://biz.yahoo.com/prnews/081114/cnf041.html?.v=1
China North East Petroleum Reports Third Quarter 2008 Financial Results
Friday November 14, 8:30 am ET
-- 3Q08 Revenue Increases 227% to $19.1 Million --
-- 3Q08 Gross Profit Increases 241% to $9.9 Million --
-- 3Q08 Net Income Increases 229% to $4.9 Million --
-- Reiterates FY08 Net Income and Diluted EPS Forecasts --
HARBIN, China and NEW YORK, Nov.14 /Xinhua-PRNewswire-FirstCall/ -- China North East Petroleum Holdings Limited (the "Company") (OTC Bulletin Board: CNEH - News), an oil producing company in Northern China, today announced consolidated financial results for the third quarter ended September 30, 2008.
ADVERTISEMENT
Third Quarter 2008 Results
Total sales for the third quarter were $19.1 million, a 227% increase compared to $5.8 million over the same period last year. This increase was due to an increase in crude oil production and the average price received for crude oil. Crude oil production for the third quarter doubled to 172,730 barrels from 86,222 barrels for the comparable quarter in the prior year. The increase in production was attributable to refracturing improvements and the implementation of water injection technology which improved efficiency of existing oil wells as well as from the addition of 30 new wells drilled during the third quarter of 2008.
The cost of sales in the third quarter increased by 214% to $9.2 million from $2.9 million for the three months ended September 30, 2007. The increase in cost of sales resulted primarily from the increase in production, depreciation of oil and gas properties, and an increase in the absolute amount of oil surcharges as a result of increased production.
Gross profit in the third quarter increased 241% to $9.9 million from $2.9 million in the same period last year. Third quarter gross margin increased to 52.0% compared to 49.9% in the year ago period.
Operating expenses increased to $978 thousand, or 5.1% of sales, from $291 thousand, or 5.0% of sales, in the third quarter 2007. This is primarily a result of an increase in selling, general and administrative costs. Operating income increased 241% to $8.9 million, or 46.8% of total sales, compared to $2.6 million, or 44.9% of total sales, in the prior year period.
Net income for the third quarter increased 229% to $4.9 million, or $0.24 per diluted share, versus $1.5 million, or $0.08 per diluted share, in the third quarter of 2007.
Mr. Hongjun Wang, President of China North East Petroleum commented, "We were pleased to report another strong quarter of revenue and profit growth and are on plan to report record production increases in 2008. We added 30 new wells during the third quarter bringing our total oil well count to 218 wells through September. Most of these wells have been installed in the Qian'an 112 oilfield where the majority of our wells are located.
During the quarter, we were particularly satisfied to see significant improvements to our financial liquidity. We grew our cash position by 220% sequentially to nearly $8 million and our operating cash flow improved notably as well. Based on the reserves within our four existing oilfields (Qian'an 112, Hetingbao 301, Daan 34, Gudian 31), we believe we have the capability of drilling approximately 675 wells in the coming years and believe the cash flows derived from oil we yield from our existing wells can support much of our well expansion activities in these areas.
Heading into the fourth quarter, we expect to be impacted by lower per- barrel oil prices which will likely impact revenue growth but believe we can sustain our full year net profit projection of $14.5-$15 million and diluted EPS of $0.62-$0.65 due to our strong production rates in the second half of the year as well as from a lower government oil surcharge rate. As oil prices decline, the amount of oil surcharge we are required to pay to the Chinese government declines. During this difficult market environment, we are keeping our operating costs low and continue to implement strict cost controls in all key areas of operation. We are encouraged with our opportunity in the market and continue to focus on expanding our position in China's oil market by adding more wells to our production capacity and seeking additional oil fields to lease and operate. We continue to expect very healthy quarterly revenue, EBITDA and profit growth, even at current oil price levels, and believe the growth plan we have in place will yield strong financial results ahead," concluded Wang.
Nine Month 2008 Results
Sales for the nine month period ended September 30, 2008 increased 273% to $44.1 million compared to $11.8 million for the nine month prior year period. Crude oil production through the first nine months of 2008 increased 143% to 422,788 barrels from 174,280 barrels for the comparable period in the prior year.
Gross profit for the first nine months was $23.6 million, a 292% increase over $6.0 million in the same period last year. Gross margin increased 260 basis points to 53.6% compared to 51.0% in the year ago period.
Operating expenses through the first nine months of 2008 were $2.0 million, or 4.4% of sales, compared to $939 thousand, or 8.0% of sales, in the prior year period. Operating income increased 326% to $21.7 million, or 49.2% of sales, compared to $5.1 million, or 43.1% of sales, in the prior year nine month period.
Net income increased by 223% to $9.8 million, or $0.54 per diluted share, from $3.0 million, or $0.12 per diluted share, for the nine months ended September 30, 2007.
2008 Financial Outlook
The Company expects 2008 crude oil production to total approximately 623,000 barrels and the anticipated number of oil producing wells is expected to total approximately 240 wells by year-end 2008. This is a 133% increase from 267,516 barrels produced in 2007, when the company finished the year with 157 wells.
Based on the Company's results through the first nine months of 2008, its drilling schedule for the remainder of 2008, and the current per-barrel price of oil received from PTR, the Company reiterates comfort with 2008 net income growth of 190%-200% to $14.5-$15.0 million, and fully diluted earnings per share growth of 195%-200% to $0.62-$0.65, compared to the 2007 fiscal year. The fully diluted EPS estimate range is based on a share count of approximately 24.0 million shares and assumes the exercise of all outstanding Company warrants.
Oil Pricing
Please note that CNEH's sole customer, PTR pays the Company a price per barrel which is calculated on a monthly basis, and is based upon a lagged, daily price per barrel average for a relatively heavy, sour grade of crude oil that trades in Singapore. This daily price index is one of a large number of crude oil price indices maintained by Platts, an international commodity and trading company. The grade of oil for which the company is paid typically trades at a discount to West Texas or London Brent crude.
Government Oil Surcharge
Under a regulation introduced in June 2006 by the Chinese government, a surcharge of 20% has been imposed on Chinese oil producers on the portion of the selling price of crude oil which exceeds $40 per barrel and a surcharge of 40% is imposed on the portion of the selling price of crude oil which exceeds $60 per barrel.
ABOUT CHINA NORTH EAST PETROLEUM
China North East Petroleum Holdings Ltd. is engaged in the production of crude oil in Northern China. The Company has a guaranteed arrangement with the Jilin Refinery of PetroChina to sell its produced crude oil for use in the China marketplace. The Company currently operates four oilfields in Northern China.
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission.
Great News and the price of the stock goes down. Go figure this market. :) What does this bring us to a PE of 3 or 4??
Amazing.
Randy
http://biz.yahoo.com/prnews/081114/cnf041.html?.v=1
China North East Petroleum Reports Third Quarter 2008 Financial Results
Friday November 14, 8:30 am ET
-- 3Q08 Revenue Increases 227% to $19.1 Million --
-- 3Q08 Gross Profit Increases 241% to $9.9 Million --
-- 3Q08 Net Income Increases 229% to $4.9 Million --
-- Reiterates FY08 Net Income and Diluted EPS Forecasts --
HARBIN, China and NEW YORK, Nov.14 /Xinhua-PRNewswire-FirstCall/ -- China North East Petroleum Holdings Limited (the "Company") (OTC Bulletin Board: CNEH - News), an oil producing company in Northern China, today announced consolidated financial results for the third quarter ended September 30, 2008.
ADVERTISEMENT
Third Quarter 2008 Results
Total sales for the third quarter were $19.1 million, a 227% increase compared to $5.8 million over the same period last year. This increase was due to an increase in crude oil production and the average price received for crude oil. Crude oil production for the third quarter doubled to 172,730 barrels from 86,222 barrels for the comparable quarter in the prior year. The increase in production was attributable to refracturing improvements and the implementation of water injection technology which improved efficiency of existing oil wells as well as from the addition of 30 new wells drilled during the third quarter of 2008.
The cost of sales in the third quarter increased by 214% to $9.2 million from $2.9 million for the three months ended September 30, 2007. The increase in cost of sales resulted primarily from the increase in production, depreciation of oil and gas properties, and an increase in the absolute amount of oil surcharges as a result of increased production.
Gross profit in the third quarter increased 241% to $9.9 million from $2.9 million in the same period last year. Third quarter gross margin increased to 52.0% compared to 49.9% in the year ago period.
Operating expenses increased to $978 thousand, or 5.1% of sales, from $291 thousand, or 5.0% of sales, in the third quarter 2007. This is primarily a result of an increase in selling, general and administrative costs. Operating income increased 241% to $8.9 million, or 46.8% of total sales, compared to $2.6 million, or 44.9% of total sales, in the prior year period.
Net income for the third quarter increased 229% to $4.9 million, or $0.24 per diluted share, versus $1.5 million, or $0.08 per diluted share, in the third quarter of 2007.
Mr. Hongjun Wang, President of China North East Petroleum commented, "We were pleased to report another strong quarter of revenue and profit growth and are on plan to report record production increases in 2008. We added 30 new wells during the third quarter bringing our total oil well count to 218 wells through September. Most of these wells have been installed in the Qian'an 112 oilfield where the majority of our wells are located.
During the quarter, we were particularly satisfied to see significant improvements to our financial liquidity. We grew our cash position by 220% sequentially to nearly $8 million and our operating cash flow improved notably as well. Based on the reserves within our four existing oilfields (Qian'an 112, Hetingbao 301, Daan 34, Gudian 31), we believe we have the capability of drilling approximately 675 wells in the coming years and believe the cash flows derived from oil we yield from our existing wells can support much of our well expansion activities in these areas.
Heading into the fourth quarter, we expect to be impacted by lower per- barrel oil prices which will likely impact revenue growth but believe we can sustain our full year net profit projection of $14.5-$15 million and diluted EPS of $0.62-$0.65 due to our strong production rates in the second half of the year as well as from a lower government oil surcharge rate. As oil prices decline, the amount of oil surcharge we are required to pay to the Chinese government declines. During this difficult market environment, we are keeping our operating costs low and continue to implement strict cost controls in all key areas of operation. We are encouraged with our opportunity in the market and continue to focus on expanding our position in China's oil market by adding more wells to our production capacity and seeking additional oil fields to lease and operate. We continue to expect very healthy quarterly revenue, EBITDA and profit growth, even at current oil price levels, and believe the growth plan we have in place will yield strong financial results ahead," concluded Wang.
Nine Month 2008 Results
Sales for the nine month period ended September 30, 2008 increased 273% to $44.1 million compared to $11.8 million for the nine month prior year period. Crude oil production through the first nine months of 2008 increased 143% to 422,788 barrels from 174,280 barrels for the comparable period in the prior year.
Gross profit for the first nine months was $23.6 million, a 292% increase over $6.0 million in the same period last year. Gross margin increased 260 basis points to 53.6% compared to 51.0% in the year ago period.
Operating expenses through the first nine months of 2008 were $2.0 million, or 4.4% of sales, compared to $939 thousand, or 8.0% of sales, in the prior year period. Operating income increased 326% to $21.7 million, or 49.2% of sales, compared to $5.1 million, or 43.1% of sales, in the prior year nine month period.
Net income increased by 223% to $9.8 million, or $0.54 per diluted share, from $3.0 million, or $0.12 per diluted share, for the nine months ended September 30, 2007.
2008 Financial Outlook
The Company expects 2008 crude oil production to total approximately 623,000 barrels and the anticipated number of oil producing wells is expected to total approximately 240 wells by year-end 2008. This is a 133% increase from 267,516 barrels produced in 2007, when the company finished the year with 157 wells.
Based on the Company's results through the first nine months of 2008, its drilling schedule for the remainder of 2008, and the current per-barrel price of oil received from PTR, the Company reiterates comfort with 2008 net income growth of 190%-200% to $14.5-$15.0 million, and fully diluted earnings per share growth of 195%-200% to $0.62-$0.65, compared to the 2007 fiscal year. The fully diluted EPS estimate range is based on a share count of approximately 24.0 million shares and assumes the exercise of all outstanding Company warrants.
Oil Pricing
Please note that CNEH's sole customer, PTR pays the Company a price per barrel which is calculated on a monthly basis, and is based upon a lagged, daily price per barrel average for a relatively heavy, sour grade of crude oil that trades in Singapore. This daily price index is one of a large number of crude oil price indices maintained by Platts, an international commodity and trading company. The grade of oil for which the company is paid typically trades at a discount to West Texas or London Brent crude.
Government Oil Surcharge
Under a regulation introduced in June 2006 by the Chinese government, a surcharge of 20% has been imposed on Chinese oil producers on the portion of the selling price of crude oil which exceeds $40 per barrel and a surcharge of 40% is imposed on the portion of the selling price of crude oil which exceeds $60 per barrel.
ABOUT CHINA NORTH EAST PETROLEUM
China North East Petroleum Holdings Ltd. is engaged in the production of crude oil in Northern China. The Company has a guaranteed arrangement with the Jilin Refinery of PetroChina to sell its produced crude oil for use in the China marketplace. The Company currently operates four oilfields in Northern China.
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission.
JT and company.... FUQI just released awesome 3Q Results and Forecast further growth and profits heading toward 2009. As stock is trading at all time low....this will likely bounce this morning.
Randy
Check out their news:
http://biz.yahoo.com/prnews/081114/cnf042.html?.v=1
FUQI just released awesome 3Q Results and Forecast further growth and profits heading toward 2009. As stock is trading at all time low....this will likely bounce this morning.
Randy
Press Release Source: FUQI International, Inc.
FUQI International, Inc. Reports Third Quarter 2008 Financial Results
Friday November 14, 7:30 am ET
-- 3Q08 Revenues Increased 159% to $93.7 Million
-- 3Q08 Net Income Increased 140% to $6.5 Million, or $0.31 per Diluted Share
-- Company Raises Fiscal 2008 Revenue, Net Income and Diluted EPS Forecast
SHENZHEN, China, Nov. 14 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced financial results for the quarter ended September 30, 2008.
ADVERTISEMENT
Revenues for the third quarter of 2008 increased 159% to $93.7 million from $36.2 million in the third quarter of 2007, due to increases in sales volumes and selling prices in the wholesale business. Wholesale contributed $90.5 million to overall revenues, representing growth of 152% year over year, and exceeding expectations. Retail revenues were slightly lower than expected, primarily as a result of slower retail business in Beijing and Shanghai regions during the Olympic Games. Retail contributed $3.2 million to overall revenues during the quarter, with $2.2 million coming from Temix and $1.0 million from Fuqi branded products.
Gross profit in the third quarter of 2008 increased 144% to $11.0 million from $4.5 million for the same period in the prior year. Gross profit was positively impacted by higher than expected sales in the wholesale business and by the contribution of incremental gross profits from the retail business. Gross profit margin was 11.7% in the third quarter of 2008, down from 12.4% in the same period of the prior year.
Operating expenses in the third quarter of 2008 increased to $2.7 million from $807,000 in the same period of the prior year. This increase was a result of expanded administrative costs required to support a growing revenue base, higher promotion costs, payrolls, business taxes, options granted and increased salaries to certain executives, as well as expenses incurred as a result of being a publicly traded company. Additionally, personnel expenses associated with retail expansion, as well as higher security costs during the Olympics contributed to higher operating expenses. Operating income in the third quarter increased 124% to $8.3 million from $3.7 million in the third quarter of 2007.
Net income in the third quarter of 2008 increased 141% to $6.5 million, or $0.31 per diluted share, from $2.7 million, or $0.21 per diluted share, in the same period of the prior year. Net margin was 7.0%, down from 7.5% in the prior year period. The decrease in net margin was primarily a result of increased operating expenses due to infrastructure expansion to support revenue growth. Non-cash items in the third quarter of 2008 included a $149,000 expense for equity based compensation and a $209,000 retail barter revenue gain. (Barter exchanges are incurred when retail customers trade-in their jewelry to obtain barter credits that can be used in lieu of cash to buy jewelry products at the Company's retail counters). Third quarter 2008 net income also benefited from a $23,000 non-operating income derivative gain associated with gold futures the Company purchased to hedge against its inventory position during the quarter.
On September 30, 2008, the Company had cash of $56.2 million, compared with $63.3 million on December 31, 2007, as the Company invested in inventory to fill up retail counter and store show cases and fulfill large orders generated from jewelry trade fairs, and as the Company paid $3.9 million cash consideration during the quarter for the acquisition of Temix. Total inventory at the end of the third quarter was $50.4 million, up from $35.1 million at the end of the second quarter, which includes inventory valued at approximately $9.8 million from the Temix acquisition. Management expects inventory and cash positions to fluctuate from time to time as the Company anticipates periods of high demand and increases of inventory to meet that expected demand.
Mr. Yu Kwai Chong, Chairman of Fuqi International, commented, "We are very pleased with our results for the third quarter, which exceeded our expectations, despite some slowing in the growth rate of the global economy, and therefore the Chinese economy, as well as the financial impact of the Olympics, which not only caused slower than expected retail sales, but also higher security expenses. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. We also believe that recent government stimulus policies can motivate additional consumer spending. We have a strong balance sheet to support our growth, the right mix of products and distribution and a strong management team. We believe that Fuqi is poised to build the leading provider of luxury jewelry products in China."
2008 Financial Outlook
For the full year 2008, the Company is raising its 2008 revenue, net income and diluted earnings per share estimates. It now expects total revenue of approximately $345 - $350 million. This forecast is comprised of $337 - $341 million in expected wholesale revenue and $8 - $9 million in expected revenue from retail. The Company also anticipates consolidated net income of $25.9 - $26.5 million, and diluted EPS of $1.17 - $1.20, based on a weighted average share count of 22.1 million shares.
For the fourth quarter, the Company anticipates total revenue of approximately $107-112 million, which represents $103 - $107 million in wholesale revenues and $4 - 5 million in retail revenues. Net income in the fourth quarter is expected to be in the range of $7.6 - $8.0 million, or $0.34 - $0.36 per diluted share, based on a weighted average share count of 22.1 million shares. Gross margin for the fourth quarter is expected to be approximately 11.0%, and net margin is expected to be approximately 7.1%.
Mr. Chong continued, "Having handily exceeded our own expectations for the third quarter, in the face of a slowing global economy, we remain optimistic about the future growth of Fuqi in China, as evidenced by our increase in guidance. Our growth will continue to be driven by wholesale revenue in the near term, but we believe that longer term the Temix and Fuqi retail brands can have a significant impact on our margins. We believe we are well positioned in both the wholesale and the retail business to capture ongoing demand for luxury jewelry products - primarily gold, but also platinum and diamond. Our Temix expansion is complete in the larger markets and we are beginning to focus our expansion into Tier 2 and 3 cities, where we believe the best future opportunities for revenue growth are. To serve the overall business, we will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace."
Conference Call
The Company will conduct a conference call to discuss the third quarter 2008 results today, Friday, November 14, 2008 before the market open at 8:30 am ET. Listeners may access the call by dialing #1-913-312-4374. To listen to the live webcast of the event, please go to http://www.viavid.net. A replay of the call will be available through November 21, 2008. Listeners may access the replay by dialing # 719-457-0820; Passcode: 6545879.
About FUQI International, Inc.
Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market.
Solid Fundamentals and Good News this Morning FUQI
Press Release Source: FUQI International, Inc.
FUQI International, Inc. Reports Third Quarter 2008 Financial Results
Friday November 14, 7:30 am ET
-- 3Q08 Revenues Increased 159% to $93.7 Million
-- 3Q08 Net Income Increased 140% to $6.5 Million, or $0.31 per Diluted Share
-- Company Raises Fiscal 2008 Revenue, Net Income and Diluted EPS Forecast
SHENZHEN, China, Nov. 14 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced financial results for the quarter ended September 30, 2008.
ADVERTISEMENT
Revenues for the third quarter of 2008 increased 159% to $93.7 million from $36.2 million in the third quarter of 2007, due to increases in sales volumes and selling prices in the wholesale business. Wholesale contributed $90.5 million to overall revenues, representing growth of 152% year over year, and exceeding expectations. Retail revenues were slightly lower than expected, primarily as a result of slower retail business in Beijing and Shanghai regions during the Olympic Games. Retail contributed $3.2 million to overall revenues during the quarter, with $2.2 million coming from Temix and $1.0 million from Fuqi branded products.
Gross profit in the third quarter of 2008 increased 144% to $11.0 million from $4.5 million for the same period in the prior year. Gross profit was positively impacted by higher than expected sales in the wholesale business and by the contribution of incremental gross profits from the retail business. Gross profit margin was 11.7% in the third quarter of 2008, down from 12.4% in the same period of the prior year.
Operating expenses in the third quarter of 2008 increased to $2.7 million from $807,000 in the same period of the prior year. This increase was a result of expanded administrative costs required to support a growing revenue base, higher promotion costs, payrolls, business taxes, options granted and increased salaries to certain executives, as well as expenses incurred as a result of being a publicly traded company. Additionally, personnel expenses associated with retail expansion, as well as higher security costs during the Olympics contributed to higher operating expenses. Operating income in the third quarter increased 124% to $8.3 million from $3.7 million in the third quarter of 2007.
Net income in the third quarter of 2008 increased 141% to $6.5 million, or $0.31 per diluted share, from $2.7 million, or $0.21 per diluted share, in the same period of the prior year. Net margin was 7.0%, down from 7.5% in the prior year period. The decrease in net margin was primarily a result of increased operating expenses due to infrastructure expansion to support revenue growth. Non-cash items in the third quarter of 2008 included a $149,000 expense for equity based compensation and a $209,000 retail barter revenue gain. (Barter exchanges are incurred when retail customers trade-in their jewelry to obtain barter credits that can be used in lieu of cash to buy jewelry products at the Company's retail counters). Third quarter 2008 net income also benefited from a $23,000 non-operating income derivative gain associated with gold futures the Company purchased to hedge against its inventory position during the quarter.
On September 30, 2008, the Company had cash of $56.2 million, compared with $63.3 million on December 31, 2007, as the Company invested in inventory to fill up retail counter and store show cases and fulfill large orders generated from jewelry trade fairs, and as the Company paid $3.9 million cash consideration during the quarter for the acquisition of Temix. Total inventory at the end of the third quarter was $50.4 million, up from $35.1 million at the end of the second quarter, which includes inventory valued at approximately $9.8 million from the Temix acquisition. Management expects inventory and cash positions to fluctuate from time to time as the Company anticipates periods of high demand and increases of inventory to meet that expected demand.
Mr. Yu Kwai Chong, Chairman of Fuqi International, commented, "We are very pleased with our results for the third quarter, which exceeded our expectations, despite some slowing in the growth rate of the global economy, and therefore the Chinese economy, as well as the financial impact of the Olympics, which not only caused slower than expected retail sales, but also higher security expenses. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. We also believe that recent government stimulus policies can motivate additional consumer spending. We have a strong balance sheet to support our growth, the right mix of products and distribution and a strong management team. We believe that Fuqi is poised to build the leading provider of luxury jewelry products in China."
2008 Financial Outlook
For the full year 2008, the Company is raising its 2008 revenue, net income and diluted earnings per share estimates. It now expects total revenue of approximately $345 - $350 million. This forecast is comprised of $337 - $341 million in expected wholesale revenue and $8 - $9 million in expected revenue from retail. The Company also anticipates consolidated net income of $25.9 - $26.5 million, and diluted EPS of $1.17 - $1.20, based on a weighted average share count of 22.1 million shares.
For the fourth quarter, the Company anticipates total revenue of approximately $107-112 million, which represents $103 - $107 million in wholesale revenues and $4 - 5 million in retail revenues. Net income in the fourth quarter is expected to be in the range of $7.6 - $8.0 million, or $0.34 - $0.36 per diluted share, based on a weighted average share count of 22.1 million shares. Gross margin for the fourth quarter is expected to be approximately 11.0%, and net margin is expected to be approximately 7.1%.
Mr. Chong continued, "Having handily exceeded our own expectations for the third quarter, in the face of a slowing global economy, we remain optimistic about the future growth of Fuqi in China, as evidenced by our increase in guidance. Our growth will continue to be driven by wholesale revenue in the near term, but we believe that longer term the Temix and Fuqi retail brands can have a significant impact on our margins. We believe we are well positioned in both the wholesale and the retail business to capture ongoing demand for luxury jewelry products - primarily gold, but also platinum and diamond. Our Temix expansion is complete in the larger markets and we are beginning to focus our expansion into Tier 2 and 3 cities, where we believe the best future opportunities for revenue growth are. To serve the overall business, we will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace."
Conference Call
The Company will conduct a conference call to discuss the third quarter 2008 results today, Friday, November 14, 2008 before the market open at 8:30 am ET. Listeners may access the call by dialing #1-913-312-4374. To listen to the live webcast of the event, please go to http://www.viavid.net. A replay of the call will be available through November 21, 2008. Listeners may access the replay by dialing # 719-457-0820; Passcode: 6545879.
About FUQI International, Inc.
Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market.
Good News out ths Morning..... not too many stocks can say that.
http://biz.yahoo.com/prnews/081114/cnf042.html?.v=1
Press Release Source: FUQI International, Inc.
FUQI International, Inc. Reports Third Quarter 2008 Financial Results
Friday November 14, 7:30 am ET
-- 3Q08 Revenues Increased 159% to $93.7 Million
-- 3Q08 Net Income Increased 140% to $6.5 Million, or $0.31 per Diluted Share
-- Company Raises Fiscal 2008 Revenue, Net Income and Diluted EPS Forecast
SHENZHEN, China, Nov. 14 /Xinhua-PRNewswire-FirstCall/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced financial results for the quarter ended September 30, 2008.
ADVERTISEMENT
Revenues for the third quarter of 2008 increased 159% to $93.7 million from $36.2 million in the third quarter of 2007, due to increases in sales volumes and selling prices in the wholesale business. Wholesale contributed $90.5 million to overall revenues, representing growth of 152% year over year, and exceeding expectations. Retail revenues were slightly lower than expected, primarily as a result of slower retail business in Beijing and Shanghai regions during the Olympic Games. Retail contributed $3.2 million to overall revenues during the quarter, with $2.2 million coming from Temix and $1.0 million from Fuqi branded products.
Gross profit in the third quarter of 2008 increased 144% to $11.0 million from $4.5 million for the same period in the prior year. Gross profit was positively impacted by higher than expected sales in the wholesale business and by the contribution of incremental gross profits from the retail business. Gross profit margin was 11.7% in the third quarter of 2008, down from 12.4% in the same period of the prior year.
Operating expenses in the third quarter of 2008 increased to $2.7 million from $807,000 in the same period of the prior year. This increase was a result of expanded administrative costs required to support a growing revenue base, higher promotion costs, payrolls, business taxes, options granted and increased salaries to certain executives, as well as expenses incurred as a result of being a publicly traded company. Additionally, personnel expenses associated with retail expansion, as well as higher security costs during the Olympics contributed to higher operating expenses. Operating income in the third quarter increased 124% to $8.3 million from $3.7 million in the third quarter of 2007.
Net income in the third quarter of 2008 increased 141% to $6.5 million, or $0.31 per diluted share, from $2.7 million, or $0.21 per diluted share, in the same period of the prior year. Net margin was 7.0%, down from 7.5% in the prior year period. The decrease in net margin was primarily a result of increased operating expenses due to infrastructure expansion to support revenue growth. Non-cash items in the third quarter of 2008 included a $149,000 expense for equity based compensation and a $209,000 retail barter revenue gain. (Barter exchanges are incurred when retail customers trade-in their jewelry to obtain barter credits that can be used in lieu of cash to buy jewelry products at the Company's retail counters). Third quarter 2008 net income also benefited from a $23,000 non-operating income derivative gain associated with gold futures the Company purchased to hedge against its inventory position during the quarter.
On September 30, 2008, the Company had cash of $56.2 million, compared with $63.3 million on December 31, 2007, as the Company invested in inventory to fill up retail counter and store show cases and fulfill large orders generated from jewelry trade fairs, and as the Company paid $3.9 million cash consideration during the quarter for the acquisition of Temix. Total inventory at the end of the third quarter was $50.4 million, up from $35.1 million at the end of the second quarter, which includes inventory valued at approximately $9.8 million from the Temix acquisition. Management expects inventory and cash positions to fluctuate from time to time as the Company anticipates periods of high demand and increases of inventory to meet that expected demand.
Mr. Yu Kwai Chong, Chairman of Fuqi International, commented, "We are very pleased with our results for the third quarter, which exceeded our expectations, despite some slowing in the growth rate of the global economy, and therefore the Chinese economy, as well as the financial impact of the Olympics, which not only caused slower than expected retail sales, but also higher security expenses. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. We also believe that recent government stimulus policies can motivate additional consumer spending. We have a strong balance sheet to support our growth, the right mix of products and distribution and a strong management team. We believe that Fuqi is poised to build the leading provider of luxury jewelry products in China."
2008 Financial Outlook
For the full year 2008, the Company is raising its 2008 revenue, net income and diluted earnings per share estimates. It now expects total revenue of approximately $345 - $350 million. This forecast is comprised of $337 - $341 million in expected wholesale revenue and $8 - $9 million in expected revenue from retail. The Company also anticipates consolidated net income of $25.9 - $26.5 million, and diluted EPS of $1.17 - $1.20, based on a weighted average share count of 22.1 million shares.
For the fourth quarter, the Company anticipates total revenue of approximately $107-112 million, which represents $103 - $107 million in wholesale revenues and $4 - 5 million in retail revenues. Net income in the fourth quarter is expected to be in the range of $7.6 - $8.0 million, or $0.34 - $0.36 per diluted share, based on a weighted average share count of 22.1 million shares. Gross margin for the fourth quarter is expected to be approximately 11.0%, and net margin is expected to be approximately 7.1%.
Mr. Chong continued, "Having handily exceeded our own expectations for the third quarter, in the face of a slowing global economy, we remain optimistic about the future growth of Fuqi in China, as evidenced by our increase in guidance. Our growth will continue to be driven by wholesale revenue in the near term, but we believe that longer term the Temix and Fuqi retail brands can have a significant impact on our margins. We believe we are well positioned in both the wholesale and the retail business to capture ongoing demand for luxury jewelry products - primarily gold, but also platinum and diamond. Our Temix expansion is complete in the larger markets and we are beginning to focus our expansion into Tier 2 and 3 cities, where we believe the best future opportunities for revenue growth are. To serve the overall business, we will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace."
Conference Call
The Company will conduct a conference call to discuss the third quarter 2008 results today, Friday, November 14, 2008 before the market open at 8:30 am ET. Listeners may access the call by dialing #1-913-312-4374. To listen to the live webcast of the event, please go to http://www.viavid.net. A replay of the call will be available through November 21, 2008. Listeners may access the replay by dialing # 719-457-0820; Passcode: 6545879.
About FUQI International, Inc.
Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market.
I wonder if this thing will work with the current speed limits? LOL
Bailout: The New American Business Model
by Bobby Eberle (of GOPUSA.com}
November 13, 2008 at 7:26 am
America is a capitalist nation, right? I mean, we're not China or the former Soviet Union, correct? In a capitalist economy, a person or group of people has an idea for a product or service, they start a business, and then one of two things happens. The business either grows or it doesn't. If it grows, more products can be made, more employees can be hired, and more profits can be made. If it doesn't grow and it wants to stay in business, there are a number of factors that should be considered. Is the product something the consumer wants? Is the business being run efficiently? Has the business strategically planned for the short term and the long term?
Businesses that fail to address those questions correctly are doomed to fail in America. That's just how things go. Businesses spring up and go away all the time. It is the responsibility of the business owner to run things correctly, right? Wrong. Welcome to the United State of "I'm incapable of running a proper business but bail me out anyway so I can keep running it poorly."
The bailout plan supported by Congress with the help of Republicans (ugh!) has now taken on a life of its own. As more and more businesses feel the pinch of tough economic times, more and more are coming with their hands out looking for government (read taxpayer) money. And the government is considering doing it! First the financial institutions were the beneficiaries of the original $700 billion bailout (oops... sorry... I meant "rescue") package. Next, the Democrats are considering doing something similar for the auto industry. Stories are now popping up regarding companies like American Express and General Electric wanting some of the bailout pie.
Let's start with some background information. Fox Business, in covering Treasury Secretary Hank Paulson's Wednesday press conference, reports that the government is now changing the terms of the original bailout bill passed by Congress and signed by the president. You remember this bill, right? This is the one that was so "urgent" and the future of America depended on it so much that so-called conservatives such as Fred Barnes called House Republicans "idiots" for opposing it. Now, Sec. Paulson says that the "original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms."
This comes after Paulson said buying troubled assets -- the plan originally advertised to the public -- would take too much time in a financial crisis that continues to test the patience of investors, government and the public.
In his statement, Paulson said that nonbank financial institutions, including companies that deal with credit cards, auto loans and student loans, may be eligible for direct capital injections. Companies such as American Express (AXP: 20.05, -2.35, -10.49%), which is one of the country's largest credit card companies, is reportedly seeking $3.5 billion in fresh capital from the government, according to The Wall Street Journal.
Back when all this bailout talk first started, it would have been nice to see conservative pundits actually take a conservative approach to the issue. I wrote about it and talked with friends, explaining how lending institutions make money by lending money. That is their business model. There is no way they are going to stop doing the very thing that they need to do in order to stay in business. Lending institutions don't make pizzas. They don't fix faucets. They lend money, and if they are forced to restructure and revamp their operations in order to continue lending money (i.e., making money), then that's what they should do. But, of course, the Democrats -- with the backing of so-called conservatives -- stepped in and offered a different approach: the bailout.
Now the Democrats want to do the same for the auto industry. As reported today by an Associated Press story on GOPUSA, "Congressional Democrats are pushing legislation to send $25 billion in emergency loans to the beleaguered auto industry in exchange for a government ownership stake in the Big Three car companies." You heard right. First the government is getting involved in banks, and now it's considering owning part of the auto industry.
House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., hope for quick passage of the auto bailout during a postelection session that begins Monday.
Legislation being drafted by Rep. Barney Frank, chairman of the House Financial Services Committee, and Sen. Carl M. Levin, D-Mich., would dip into the $700 billion Wall Street rescue money, approved by Congress last month, for the auto aid.
President Bush is cool to that idea. But the White House says he is open to helping the industry, which is buckling under poor sales, tight credit and a sputtering economy.
The news story does end with an important point: "White House press secretary Dana Perino said Bush understands the importance of the industry, but that the carmakers' problems -- decades in the making -- cannot be blamed on the administration or the recent financial meltdown."
That is exactly right! The American auto industry is in trouble because they are running a poor business. Let's see... hmmm... let's build automobiles but never factor in that gas prices may actually rise someday. Americans love SUVs and pick-up trucks. Great! Let's put all our eggs in that basket and reap short-term rewards. But wait, what happens when Americans no longer want SUVs and pick-ups? Oh silly, that's an easy one... we'll just go to the government and ask for money.
In addition to bailout money, the government is also making trillions of dollars in emergency loans of taxpayer money to financial institutions and other entities but is NOT disclosing the recipients. That's right. The government is loaning our money to institutions, but we have no idea who's getting it. As reported by Bloomberg.com, "House Republican leader John Boehner called for the Federal Reserve to disclose the recipients of almost $2 trillion of emergency loans from American taxpayers and the troubled assets the central bank is accepting as collateral."
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, there is little disclosure about how the programs are being implemented.
Bloomberg News requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.
A spokesman for the Federal Reserve didn't immediately respond to requests for comment.
It's getting crazier and crazier, and what's worse, there are no conservative "leaders" out there speaking up and saying enough is enough! This is a capitalist nation and the business cycle will always have its ups and downs. What will certainly make this situation worse is if bad behavior is rewarded! Remember when we all rallied together to oppose illegal immigration amnesty plans? One of the main reasons that I cited was that it would reward illegal behavior and lead to more illegal immigration. The same concept applies here. If we reward poor business practices, then all of us as taxpayers will be monumentally stupid to assume that we will get anything more than poor business practices in the future. If businesses are so poorly run that they will fail, then they should fail! It is a fact of life that new businesses will spring up to take their place.
America is a nation built on freedom. When the government steps in to own banks, automakers, and more, then we lose our freedom. We must stand united and demand a conservative approach from our elected leaders. No more bailouts. No more big government. No more socialism. This is still America, isn't it?
Bailout: The New American Business Model
by Bobby Eberle (of GOPUSA.com}
November 13, 2008 at 7:26 am
America is a capitalist nation, right? I mean, we're not China or the former Soviet Union, correct? In a capitalist economy, a person or group of people has an idea for a product or service, they start a business, and then one of two things happens. The business either grows or it doesn't. If it grows, more products can be made, more employees can be hired, and more profits can be made. If it doesn't grow and it wants to stay in business, there are a number of factors that should be considered. Is the product something the consumer wants? Is the business being run efficiently? Has the business strategically planned for the short term and the long term?
Businesses that fail to address those questions correctly are doomed to fail in America. That's just how things go. Businesses spring up and go away all the time. It is the responsibility of the business owner to run things correctly, right? Wrong. Welcome to the United State of "I'm incapable of running a proper business but bail me out anyway so I can keep running it poorly."
The bailout plan supported by Congress with the help of Republicans (ugh!) has now taken on a life of its own. As more and more businesses feel the pinch of tough economic times, more and more are coming with their hands out looking for government (read taxpayer) money. And the government is considering doing it! First the financial institutions were the beneficiaries of the original $700 billion bailout (oops... sorry... I meant "rescue") package. Next, the Democrats are considering doing something similar for the auto industry. Stories are now popping up regarding companies like American Express and General Electric wanting some of the bailout pie.
Let's start with some background information. Fox Business, in covering Treasury Secretary Hank Paulson's Wednesday press conference, reports that the government is now changing the terms of the original bailout bill passed by Congress and signed by the president. You remember this bill, right? This is the one that was so "urgent" and the future of America depended on it so much that so-called conservatives such as Fred Barnes called House Republicans "idiots" for opposing it. Now, Sec. Paulson says that the "original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms."
This comes after Paulson said buying troubled assets -- the plan originally advertised to the public -- would take too much time in a financial crisis that continues to test the patience of investors, government and the public.
In his statement, Paulson said that nonbank financial institutions, including companies that deal with credit cards, auto loans and student loans, may be eligible for direct capital injections. Companies such as American Express (AXP: 20.05, -2.35, -10.49%), which is one of the country's largest credit card companies, is reportedly seeking $3.5 billion in fresh capital from the government, according to The Wall Street Journal.
Back when all this bailout talk first started, it would have been nice to see conservative pundits actually take a conservative approach to the issue. I wrote about it and talked with friends, explaining how lending institutions make money by lending money. That is their business model. There is no way they are going to stop doing the very thing that they need to do in order to stay in business. Lending institutions don't make pizzas. They don't fix faucets. They lend money, and if they are forced to restructure and revamp their operations in order to continue lending money (i.e., making money), then that's what they should do. But, of course, the Democrats -- with the backing of so-called conservatives -- stepped in and offered a different approach: the bailout.
Now the Democrats want to do the same for the auto industry. As reported today by an Associated Press story on GOPUSA, "Congressional Democrats are pushing legislation to send $25 billion in emergency loans to the beleaguered auto industry in exchange for a government ownership stake in the Big Three car companies." You heard right. First the government is getting involved in banks, and now it's considering owning part of the auto industry.
House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., hope for quick passage of the auto bailout during a postelection session that begins Monday.
Legislation being drafted by Rep. Barney Frank, chairman of the House Financial Services Committee, and Sen. Carl M. Levin, D-Mich., would dip into the $700 billion Wall Street rescue money, approved by Congress last month, for the auto aid.
President Bush is cool to that idea. But the White House says he is open to helping the industry, which is buckling under poor sales, tight credit and a sputtering economy.
The news story does end with an important point: "White House press secretary Dana Perino said Bush understands the importance of the industry, but that the carmakers' problems -- decades in the making -- cannot be blamed on the administration or the recent financial meltdown."
That is exactly right! The American auto industry is in trouble because they are running a poor business. Let's see... hmmm... let's build automobiles but never factor in that gas prices may actually rise someday. Americans love SUVs and pick-up trucks. Great! Let's put all our eggs in that basket and reap short-term rewards. But wait, what happens when Americans no longer want SUVs and pick-ups? Oh silly, that's an easy one... we'll just go to the government and ask for money.
In addition to bailout money, the government is also making trillions of dollars in emergency loans of taxpayer money to financial institutions and other entities but is NOT disclosing the recipients. That's right. The government is loaning our money to institutions, but we have no idea who's getting it. As reported by Bloomberg.com, "House Republican leader John Boehner called for the Federal Reserve to disclose the recipients of almost $2 trillion of emergency loans from American taxpayers and the troubled assets the central bank is accepting as collateral."
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, there is little disclosure about how the programs are being implemented.
Bloomberg News requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.
A spokesman for the Federal Reserve didn't immediately respond to requests for comment.
It's getting crazier and crazier, and what's worse, there are no conservative "leaders" out there speaking up and saying enough is enough! This is a capitalist nation and the business cycle will always have its ups and downs. What will certainly make this situation worse is if bad behavior is rewarded! Remember when we all rallied together to oppose illegal immigration amnesty plans? One of the main reasons that I cited was that it would reward illegal behavior and lead to more illegal immigration. The same concept applies here. If we reward poor business practices, then all of us as taxpayers will be monumentally stupid to assume that we will get anything more than poor business practices in the future. If businesses are so poorly run that they will fail, then they should fail! It is a fact of life that new businesses will spring up to take their place.
America is a nation built on freedom. When the government steps in to own banks, automakers, and more, then we lose our freedom. We must stand united and demand a conservative approach from our elected leaders. No more bailouts. No more big government. No more socialism. This is still America, isn't it?
I've read through several of these lawsuit news releases and it sounds to me mostly like attorneys looking for plaintiffs.
This whole market is upside down and there's lots more and bigger fish to fry would be my guess.
If they want law suits why not go up against some of the big financial companies.
Later.
Randy
I saw this news as well. Sounds pretty intriguing....if only the share price would respond in a positive manner.
My guess is that an account got sold out due to a margin call or something like that.
Regards,
Randy
Hey Biz....you've been watching over things here pretty well. I don't know that there's a lot to say until we hear something. That they make good products isnt' up for debate. They've won awards, they've been tried and tested....the question mark is equity and integrity.
Even if they realized they've screwed up....I think the best thing they could do is update their shareholders of the status of things.
Regards,
Randy
It's been quite a while ago, but I read an article a while bck that as if/when commodities and staples become overpriced or scarce growing ones own food is exactly what should be done.
As I recall this is what happened in Cuba over recent decades....let me see if I can find the article back...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=28981348
Pretty insightful article.
BTW, my garden generally does all right...tomatoes, peppers, cucumbers, beans, etc....but I've historically not done very well with potatoes. Some day I'll do better. I've focussed in recent years on small fruits. I grow strawberries, raspberries, bush cherries, current berries (and a couple fruit trees that are a waste of space) and make an assortment of jellies and jams from them.
I've wanted to do chickens but so far haven't convinced the wife. :)
Hey Excel....I've been seeing the latest M&M commercials and they've been using the Adam's Family spooks.
Hmm...I think it must be part of the conspiracy. :)
Randy
Yeah why not. Blame me and Donovan
Randy
I'll take Philadelphia this week. Thanks.
Juniors Benefit from Falling Molybdenum Prices
By Jim Nelson
November 11, 2008
[This is an article from Agora Financial's Penny Sleuth. It's a free article so I figured it's all right to repost. Here's the link: http://www.pennysleuth.com/ Randy]
As expected, molybdenum prices fell sharply over the last two weeks. The metal has finally fallen in line with the rest of the commodities. For us, this is a benefit.
Molybdenum is not traded like copper, zinc, or nickel. It’s such a rare element; it is actually bought by steel and fertilizer companies straight from miners. There’s simply not enough of it to be traded on a commodities exchange like other base metals.
Because many projects have been cut and expenses are tight worldwide, demand for many metals has temporarily slipped in recent months. That’s why copper, zinc, and nickel are down 50% to 55% since July.
Since molybdenum goes months without new bids, its price hasn’t budged from its $34 rate. That’s why, when the most recent contracts came in, the negotiated price was slashed.
While that doesn’t sound like a positive for molybdenum miners, it may prove to be the best possible development for many juniors. You see, most juniors aren’t actually selling any molybdenum yet. So, they don’t have to take this price. Others, however, are taking a beating.
Freeport-McMoran Copper & Gold Inc., for instance, has a few molybdenum mines in Colorado, where they are cutting production and closing up shop. This drop in prices makes these mines uneconomical to run. The company said they plan on reopening the mines when prices climb back up. But, it’ll take 12-18 months for Freeport to get them back to full capacity.
Shut downs like these should bring the price of molybdenum back up to where it was trading before and eliminate some competition. But there is a second development here…
Governments all over the world are tackling the current economic crisis in different ways. One approach is starting to emerge in many countries. President-elect Barack Obama has repeatedly stated that the best way to fight through a crisis like this is by implementing more building projects. Referring to the Tennessee Valley project under FDR during the Great Depression, Obama claims that infrastructure projects offer the best for both the country and its citizens.
Other world leaders are jumping on to this approach. China just unveiled a $586 billion economic stimulus plan that will invest heavily in the country’s growing infrastructure needs. When there’s infrastructure in the works, demand for molybdenum goes through the roof. Steelmakers require molybdenum for building everything from pipelines to construction equipment.
Developments like these will surely boost the price of the metal by the time juniors’ mines come online.
Unfortunately, there aren’t too many players in this field. Here’s a short list of a few that should benefit:
Quadra Mining Ltd (QUA: TSE) has a 211-million pound molybdenum mine with planned development program through mid-2009.
Roca Mines Inc (ROK: CVE) operates a 191-million pound molybdenum mine already in production with planned increases during the next several quarters.
Augusta Resource Corp (AZC: AMEX) has a 190-million pound molybdenum mine scheduled for initial production in 2011.
None of these are recommended for the faint of heart. We aren’t suggesting you purchase shares of any of these three. But as the Chinese proverb goes. “A crisis is an opportunity riding the dangerous wind.” The crisis wind may be blowing…
Sincerely,
Jim Nelson
P.S.: If you think 200 million pounds of molybdenum is enticing, you need to check out our latest find, which is sitting on 1.3 billion pounds of molybdenum and is set to begin production in 2010. That’s the largest pure play in the business, and one of the cheapest price tags. Check it out here…
Editor’s Note: As always send any questions or concerns to us at jim@pennysleuth.com