Our
skies run thick with speculation, and hesitation. When will Boeing’s phenomenal new workhorse move? Outside Las Vegas sits the Nuclear Motor Lodge. Us as well. Peace brings with it perspective. We’re gaining some. Meanwhile in Renton Washington fresh copies of the 737 Max pile up on the tarmac. Shares of BA are piled up between the EMAs too.
BA will fly Max 8s again, and pretty soon. Count on it. Bet on it. STOCKjAW continues to. We also lucked into a talk with a top level Boeing insider–no kidding. Life’s weird that way.
Some say BA’s a “battle ground.” Thanks Cramer. But it’s true. And then, so what? Wasn’t Target a battle ground in the fugly sprawling aftermath of it’s mammoth data breach? And everybody who pounced on that ick got paid.
Modern living can prove a bitch, but then what isn’t at times? Modern motor lodge living makes that a bit better, particularly mid-week. By then all crowds have fled leaving a quiet elite grace to unfurl. Listen Woody. Amid the utter cool of a turquoise pool, you may just notice Amazon busily busting a major move. We did, and now we share it with you. Check our mega-fresh charts. Get here, and get square on the facts.
“Motor
lodge living is only for weekends, and no one will fly the Max 8 for eight months.” “Horseshit” I hiss. “Boeing’s been building fleets of aircraft since long before the age of TV dinners. That’s not about to hitch to an eight month halt.” I hope I’m correct. “All company’s that build or operate objects that defy gravity will at some point suffer, temporarily. It’s simply BA’s turn, again.” When will Boeing’s Max 8 fly again? Our guess? Eight, pssibly twelve weeks, and 8 to 10 billion dollars.
“Forget the flak of utter nonsense,” I inform Hummphries, STOCKjAW’s excitable unpaid consultant. Southern Nevada sun pours over a timeless desert. The Nuclear’s parking lot’s sits in silence.
“Car loans,”he repeats. We busily hump the sidewalk inside the lodge’s horseshoe. Hummphries holds up a finger “Car loans.” “Get back” I bark, “Do you want to confuse him? He doesn’t know you from Adam.” Some woman putters by the pool. “Stay here,” I index down. “He’s brilliant but distractable and there he is, in the shallow end with the pool basketball. He’s the one who just went under.”
“What?–that kid? What is he–twelve.” I stop and shoot one over my shoulder. “Right–twelve, exactly, and he does four figure multiplication in his head. Later, when he’s fifteen and running Goldman, he’ll give you a job. If you’re really nice he’ll let you work somewhere under ground, like soul-sapping fixed income–that is until he learns who you really are.”
I round the shallow end and stare into the spangles. He’s looking directly back from beneath the wobbles. I string a stare through the water and raise both palms open to the sky. He gives a thumbs up. “Fa King nice,” I mumble returning the thumb. “Come to the BB at eight,” I say. He nods. That’s when I see Hummphries right behind me.
“No way he understood you.” Hummphries’ face screws into bent confusion. We set the bet for a benji. “Bring you wallet tonight.”
Now the woman’s intently leaning over looking into the deep end. We begin curling back. “What the hell?” I’m looking at one of the pool side tables. “Baby wipes?” I ease over closer to her and lean over the water, matching her.
“You know It’s posted–on the lobby door. No baby wipes or plastic grocery bags on site. People just can’t seem to refrain from flushing them. That’s why the water keeps being shut off.” I straighten. She smirks, hand on hip. “O.K.” I say and slip back all casual. That’s when she went into the water, somehow. With a single swipe I snatch both her wipes and room key. “Oops–accidents happen.”
“Car loans,”
he repeats again an hour later. “What?” “Car loans–goddammit. Fucking financial deals for things with wheels.” Hummphries is now fixedly staring, as though at some mute alien fresh in from the Kuiper Belt. “It’s called a leading economic fucking indicator,” he bellows. “You might as well pay me first,” I say “before this story.”
The sharp clink of hard ice and glass drifts across the Bunsen Burner. “Car loans–car loans?” I hiss. “It’s Tuesday night at the Bunsen. Do you know how that translates?” I lean back with an eyebrow. A silent stare back. “O.K.” I point over the bar to the TV. “It’s Bewitched Night.” The big screen steadily displays tonight’s episode index.
Yet Hummphries promptly ignores this completely. He takes up a far position in the far corner or the vast curved booth. “Exactly how much Boeing does STOCKjAW have now?” “Much more than you,” I tap my closed laptop.
“Way back in ’08,” he says, “5.5 million car loans were tripping delinquent at once. At the same time the coven of investment bank demons who created the sub-prime mortgage melt-down were busy stirring up huge cauldrons of CDOs full of dog shit. That was all going on high up in the glass sewer we like to call Wall Street.”
“That’s millions of people quickly reducing car loans to approximately the same value of a right-angled golf club. Delinquent ranks as three or more months late to the leaner with your cash. That’s called under-performing or non-performing assets on the books.” He leans over the table for emphasis. Are those beads of sweat?
We shift out into the open air of the Star Bar. In mere moments Hummphries is refueled and gassing. “There’s a moral to most stories” he gases. “Here it is. This week, that 5.5 million bent golf clubs topped 7 million. That’s seven million people blowing off their vehicle loans–in national unison. You want a leading indicator? That’s one.”
Hummphries says “Eighty-five percent of new car purchases are financed. Few can or chose to drop that much liquidity. Now, the average nut floated for a car is thirty-one grand, at 6.5%–up from 5.0%.”
An unholy dusk of dark crimson had left behind a dried-blood darkness. The weekend crowd had vanished, away to wherever they avoid their vehicle loans. Ms. Baby Wipes had fled in a van. The pace of motor lodge living had relaxed. The pool’s filter intake clacks quietly. The water glows a wobbling turquoise and the phone continues ringing somewhere below locked inside an empty green Sierra.
Nearly
six months after the tragic Indonesian Lion Air crash work on the software-centered fix continues on. That fix involves a dual sensor-controlled anti-stall feature known as the “MCAS–Maneuvering Characteristics Augmentation System.” Both Boeing and the FAA have been neck-deep in that effort Yet no date for the launch of the working fix has been announced.
Barons, March 15, 2019, 8:00 PM, ET–
“The shares topped $440 at the beginning of this month, but have since fallen to $375. We wouldn’t sell them here, at a price of less than 14 times this year’s projected free cash flow, versus nearly 20 for the S&P 500 index.”–“Fallout from the Boeing 737 Max 8 crash could last for years,” Jack Hough.
The pressure is eardrum splitting. As good as many equity analysts often are, none can credibly provide fully definitive answers, or tighten the time frame to a fix. Tuesday morning Boeing CEO Dennis Muilenburg stated that “Soon we will release a software update for the 737 Max that will address concerns discovered in the Lion Air aftermath.” Time is money. Boeing insiders know that fact better than anyone, yet information outside that circle remains speculative. Shares are up today by 0.91% at $375.68 on relatively normal volume.”
Boeing(DJI, BA) 3-20-19
Water
courses in circles round a central drain in the Men’s room. I step out to spot Lezzlie busy behind the eyebrow bar. “We know we know. They’re on the way, eventually” she assures and no look up. Peace has indeed settled once again. After all it is “Bewitched Night” at both the Bunsen Burner and the Star Bar. Locals mill casually while I scan for Kaper, STOCKjAW’s secret weapon.
“It’s pronounced kay-per,” I correct Hummphries. He points. “That bald-headed woman behind the bar knows business. So where is he?” Hummphries again points behind the bar. “Did you hear her when the distributor showed without the olives?”
“They’re coming,” Lezzlie is forced to repeat down the phone line. We hear her talking authoritatively. “Leading indicators,'” he repeats as we lean over the railing yet listening for the ringing in the distance.
The arcing lobby driveway beams a reflected shimmer of tangerine-orange. He points. We glance toward the parking lot. Kaper strolls through the hushed lot to disappear beneath the entryway. “He’s the only kid ever allowed into the Bunsen Burner Bar.”
Lezzlie slides a fresh order of fries onto the table while sporting a shoulder high tray of drinks. Guests flow in from the open deck as others nestle in for the opening of the new episode.
Moments
later I glance across the Bunsen from behind my massive laptop. From our cloistered position in the darkened corner, I see Kaper strolling over the smooth circly-patterned commercial carpeting.
“Yo” I say. Kaper wordlessly takes up his position beside and I slid the huge laptop his way. He wiggles it close and peers deeply into the massive chart of Boeing. “It’s bottomed,” he says “between the 50 and 200 day EMAs.” “Right,” I concur. “Perhaps the main damage to the share price is done.” “The volume is still too elevated to call it over.”
“How’s school,” I ask. “Stupid.” He stares into the screen while working the keyboard. I lean back. “That’s because they’re forced to pay teachers in food stamps.”
We look up in unison to the angry clatter of a pipe wrench bouncing off a tiled floor. “Pumpernickel Plumbing?” Hummphries snickers as a guy in blue coveralls disappears toward the switchback staircase. He pays up on my benji. Kaper looks over “your call’s set. The guy from Boeing’s gonna call on the West Wing pay phone. You should go,” he warns. “Take a look at Amazon,” I say. “It now looks to be breaking out.”
Amazon(Nasdaq, AMZN) 3-20-19
Once
outside, the glow emanating over Vegas radiates into a stary night. A fresh clarity dominates the moment, even after last week’s market action craziness. Amazon broke over $1670.10. STOCKjAW’s cost basis perches at $1611.63. When AMZN dipped below $1600.00 on March 8th we expanded our position, slightly reducing our cost basis. The phone’s ringing as I approach the pop machine.
“There will be no V-shaped recovery,” the voice says over a crystalline connection. The FAA is rattled. The spate of lawsuits is underway.” “And production is set to continue?” I ask.
“Halting the production line is hugely disruptive, and exquisitely expensive. If Boeing even slows the production schedule, shares will collapse.”
Collapse? “And the delivery schedule? Finished planes are parked on the tarmac in Renton Washington plant.”
“Deliveries will continue. You’re paying for the earnings stream. That will all come, and only slightly slower. Cash flow will take a hit, but not seriously.””Cash flow is 15 billion now, and growing toward 21,'” I say.
“Right. Shares will fluctuate, as the weak hands are shaken out by on-going media hype. Look long and remain calm.” The line suddenly goes silent.
Ten minutes after midnight water ripples in concentric circles about the floor drain in the men’s room. Lezzlie’s still on the phone. Kaper’s gone home and it’s seems up to Samantha to save our night. All is well at the Nuclear amen.
When the pay phone rings…answer.
Jam of the day:
Song & Emotion,–Tesla
https://www.youtube.com/watch?v=wb0W_nFEjkg
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