Interested in Joy Global Under $42 But...
By:
TraderMark Monday, September 29, 2008 12:53 PM
I am interested in
Joy Global (JOYG) here as it breaches below $42, which is now lower than it was before it announced its massive share buyback program. (
Sep 11: Joy Global to Buyback 1/5th of Shares this Year; 2/5ths by 2011). However, the problem with a lack of credit is just about all major sales purchases of any major product, the world over, is based on financing. Without financing, we have no global economy. We have no big ticket purchases such as
huge mining equipment. Etc. Hence, we remain on a precipice to see if the banks will stop hoarding cash or not. The one problem with this bailout other than being too small in size to address the problem is, there is no guarantee that the cash we give them won't just sit on their balance sheet to protect themselves. Instead of the true intent - to be lent out. You would think this would be a moment where the banks of countries who actually have savers can swoop in and take the place of American (and some European) institutions on the global stage but we are not seeing that yet as everyone sits on their hands. It is quite an amazing moment in history.
- As the world's mining equipment makers meet here for their quadrennial trade show this week, they should be in a celebratory mood given the booming business they have done since they last got together. Instead, a mood of uncertainty prevails at MINExpo, with one question hanging over the event like fog: how much of a toll will the global financial crisis take on their sales?
- There are signs that the global credit crisis and historic changes on Wall Street are affecting the industry's sales financing model, which relies on securitization of customer loans.
- On Saturday, Sergio Marchionne, chief executive of Italian industrial company Fiat, said the credit crisis had brought the financing business at Fiat's construction and farm equipment units to "an absolute standstill." He predicted there would be a "phenomenal repricing of risk" that would not spare anyone in the equipment industry.
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