Operating at the Intersection of Technology and the Capital Markets
Tag: debt
The final numbers are in. The Federal Government posted a fiscal deficit of $1.7 trillion in fiscal year 2023 on $6.1 trillion in fiscal spending. The fiscal deficit figure is up 23% from fiscal 2022's deficit. Blame the Biden Administration and Congress for the deficits in fiscal years 2021-2023. Blame the Fed for subsidizing those … Continue reading The United States’ Spend, Print, Inflate Fiscal Policy Is Unsustainable. The Fed’s Monetary Policy Isn’t Helping.
I don't believe that management teams will provide investors with formal 2024 guidance on September quarter EPS calls. However, there should be some interesting data points to pick-up on. 2024 Budgets: Most companies will not provide full 2024 budget commentary and may not provide any 2024 commentary at all. However, I would expect companies to … Continue reading What’s Important To Listen For On Upcoming Tech Earnings Calls
A Government budget deal will get done regardless of a looming Government shutdown. The $33 Trillion Treasury debt load is about to go much higher, and with that the purchasing power of the Dollar much lower (i.e. inflation). Rates are going lower next year as the interest expense burden on the debt outstanding is unsustainable. … Continue reading I Am Sorry To Say That Inflation Is Here To Stay
With $34 Billion in outstanding debt, it is only a matter of time before American Airlines (ticker: AAL), comes calling hat in hand for a bailout. AAL will require financial aid (a bailout or a very large equity offering), before 2026 debt maturities occur. The 2020-2021 COVID bailouts were not the answer to the bloated … Continue reading When Will American Airlines Be Bailed Out Next?
Equity dilution will be significant in 2024 should rates remain elevated as we expect. Equity dilution in 2025 could be double (or more) 2024 levels given the debt maturity schedules I've perused for various Technology companies. Equity dilution. A number of those Tech companies will choose to pay down debt with proceeds from new equity … Continue reading Significant Equity Dilution On The Horizon
Wholesale used-vehicle prices decreased 1.6% in July as compared to June. The Manheim Used Vehicle Value Index declined to 211.7, down 11.6% year-over-year. I would not expect the used vehicle market to completely rollover back to 2019 price levels as prices for new vehicles (up 60% over the past 10 years), are at such elevated … Continue reading Used Vehicle Prices Declined in July
I haven't seen the detailed sell-side estimates for SS&C Technologies (SSNC), but I am willing to wager that the sell-side did not properly model rising interest expense, thus SSNC missed on the EPS line. Also, SSNC ought to have used its inflated stock back in 2021 to pay down debt. Can't say I did not … Continue reading Can’t Say I Did Not Tell You So
We have a General Election in November 2024. Once the new President takes office in January 2025 there will be a push for higher taxes for both companies and individuals. It won't matter which party takes office. Neither party knows how to exercise fiscal restraint - (see Public Debt Bomb) - therefore rather than curb … Continue reading Taxes Are Going Up In 2025
The Fed, the Biden Administration and Congress all view inflation as a tool to help pay down the U.S.'s suffocating debt load. One may reasonably say that the Fed knew exactly what it was doing when it continued to keep rates at the zero bound while pumping $120 billion per month into the Treasury and … Continue reading Inflating The Debt Away. Part II.
I traded emails with a friend over the weekend regarding AT&T and telcos/cable cos in general. My general take is that I would not touch any of these companies. These are slow growth businesses that carry significant debt, too much debt in fact considering where interest rates are. Many of these companies will be required … Continue reading AT&T, Telcos and Cable Cos
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