FC/OT: General Electric no longer a member of the Dow Jones Industrial Average

[tboyer]

And you just can't fight long-term demographics. There are limits to what government can accomplish -- liberals and conservatives both need to remember that.

Philadelphia was pretty much in decline from the 1920s till about the year 2000, but now it's a boomtown again. The city government made good moves and bad moves, but mostly it's just this demographic tidal shift. Cities are, for whatever reason, cool again.

It's why you hate to see cities bankrupt themselves offering ridiculous tax incentives to try to land new business. If you have to bribe business to come to your town, you're just creating the illusion of something.

Seattle is one of the most business-unfriendly places I've ever been, not a very well managed city, not very good public schools or infrastructure (and an earthquake could flatten the place any minute). But it just grows and grows because people want to live there and there is this giant critical mass of smart people with money. So many entrepreneurs. The entrepreneurial community makes its own weather. Look at California and New York, if low taxes were the key to business growth, California and New York would be Mississippi, and Mississippi would be California.

Agree.....but infrastructure has to come first. And by that, I mean public transportation, safety, reasonable food, schools, taxation etc. The problem for Detroit, is that everything you said about the cities, is now readily available in the near 'burbs. Unlike Jerzy, LA, Chicago....that ship has sailed. I hope I am wrong..but if you go to every mid-major city, the first exit outside the home county is almost always the best economy in the region.

 

[LionDeNittany]

Yeah we were in Seattle when Boeing fell under the sway of this philosophy -- and it almost killed them. They had a chairman (Phil Condit, who was actually a brilliant engineer) and a CEO (Harry Stonecipher, basically a bean counter) who became convinced that Boeing should get out of manufacturing and get into financial services. So they sold off manufacturing capacity, slashed R&D and put money into their aircraft leasing business. They actually believed manufacturing airplanes was not going to be Boeing's business model.

It really hurt Boeing, they lost ground to Airbus, they lost a couple billion on aircraft leasing which they weren't very good at.

Now Boeing is back and the philosophy has done a 180 -- Boeing is trying to outsource less and bring manufacturing back under its own roof because they've realized, like the German conglomerates -- it's actually the biggest profit center they have.

Today intellectual property is everything -- you don't want China buildling your aircraft wings because tomorrow China will steal the designs and build knockoff airplane wings and compete against you.

I think Jack Welch was the devil and most of what he stood for is discredited.

The only part of Jack Welch's legacy that's alive and well is the $100 million CEO salary, the huge annual bonuses even when the company underperforms, the multiple corporate jets and corporate apartments, $10 million birthday parties and $8 million bathrooms with solid gold bathtubs. That's the part of Jack Welch that lives on.

Jack Welch just grew earnings through leverage. The thing is that to get leverage you need to buy businesses that can create that leverage and sell those that don't provide leverage.

Jack Welch at least took the company from the dust bin to something, but he went too far. Immelt seemed he just wanted to please politicians and had no idea what his company did.

But yes, the inflated salaries come from the Welch era. Actually before him. The boards were the problem. People love to complain about inflated CEO salaries but not sure there's much to stop it unless you vote in proxies.

This is one of the many reasons index funds are awful.

LdN

 

[demlion]

Correct. You do not know squat as regards Detroit and the great state of Michigan (and your numerous previous posts when you degraded both were emotionally based as opposed to logically based, and those posts were uninformed).

Except that any fool can see that it is flat on its back. Both of them are. I know lots of folks from Michigan who have moved to WEST VIRGINIA because our economic climate is better. For that matter, the place where I grew up between Erie and Bradford PA, is even worse than WV, which is why I live here.

 

[sluggo72]

Detroit is a pretty remarkable story - survived it's bankruptcy, was able to keep it's massive and important art collection, and now Ford with a big investment in the city. Still, another example of one city's over-reliance on a single industry and how it lives and dies with said industry. I have colleagues who work in Windsor and do not leave their cars or hotels when they go to Detroit. Hopefully that changes soon.

Yup kept its Art collection, in the mean time beat lenders out of $7.4 billion in debt. Now thats a pretty good deal, I wonder if I could get that?

'The city’s bankruptcy removed about $7.4 billion in debt from the city’s books'

 

[Cletus11]

Yup kept its Art collection, in the mean time beat lenders out of $7.4 billion in debt. Now thats a pretty good deal, I wonder if I could get that?

'The city’s bankruptcy removed about $7.4 billion in debt from the city’s books'

Exactly...tell that to the all the retirees who bought the bonds that got defaulted on and now don't have money to retire or have to live hand to mouth versus comfortable.

 

[anon_xdc8rmuek44eq]

Yup kept its Art collection, in the mean time beat lenders out of $7.4 billion in debt. Now thats a pretty good deal, I wonder if I could get that?

'The city’s bankruptcy removed about $7.4 billion in debt from the city’s books'

I believe the art collection was turned over to a trust or non-profit? Can't recall. As for the lenders, that's the cost of a bad investment I guess. Onward and upward.

 

[Think1]

I fear IBM will be next.

 

[Nitt1300]

Yup kept its Art collection, in the mean time beat lenders out of $7.4 billion in debt. Now thats a pretty good deal, I wonder if I could get that?

'The city’s bankruptcy removed about $7.4 billion in debt from the city’s books'

I know of someone who has done it repeatedly, and some people still trust him, for reasons that I do not comprehend.

 

[WeARE]

Or my dad’s. He worked in the Re-Entry Systems Division at 32nd and Chestnut.

So did my Uncle and then he moved out to KOP.

 

[sluggo72]

I believe the art collection was turned over to a trust or non-profit? Can't recall. As for the lenders, that's the cost of a bad investment I guess. Onward and upward.

so why werent they sold to help pay back the lenders?

 

[anon_xdc8rmuek44eq]

so why werent they sold to help pay back the lenders?

There are several articles out there about this; to get more in depth, you'd have to ask the judge who agreed to the $800mm bailout of the museum provided by private donors, the State of Michigan, and other foundations. The deal essentially saved the pensions of 30,000 city retirees and workers in exchange for the museum and it's collection to be turned over to a trust.

A plan to save the collection from sale — which came together over the last several months and is being called “the grand bargain” — raised more than $800 million from foundations, private donors and the State of Michigan essentially to ransom the museum from city ownership. The bargain provided the money to help save public workers’ pensions, as long as the museum was protected and owned by an independent charitable trust, as are most large American museums.

https://www.nytimes.com/2014/11/08/...gain-saves-the-detroit-institute-of-arts.html

 

[sluggo72]

There are several articles out there about this; to get more in depth, you'd have to ask the judge who agreed to the $800mm bailout of the museum provided by private donors, the State of Michigan, and other foundations. The deal essentially saved the pensions of 30,000 city retirees and workers in exchange for the museum and it's collection to be turned over to a trust.

A plan to save the collection from sale — which came together over the last several months and is being called “the grand bargain” — raised more than $800 million from foundations, private donors and the State of Michigan essentially to ransom the museum from city ownership. The bargain provided the money to help save public workers’ pensions, as long as the museum was protected and owned by an independent charitable trust, as are most large American museums.

https://www.nytimes.com/2014/11/08/...gain-saves-the-detroit-institute-of-arts.html

hmmm one would think the lenders would be further up the food chain, then beneficiaries (pension holders), but maybe that was because most of the lenders were out of state, while the pension holders are in state and thus voters. Still sounds wrong to me.

 

[anon_xdc8rmuek44eq]

hmmm one would think the lenders would be further up the food chain, then beneficiaries (pension holders), but maybe that was because most of the lenders were out of state, while the pension holders are in state and thus voters. Still sounds wrong to me.

I don't know for sure; there is some question to the total value of the art - a documentary I watched said there were really only a few dozen very valuable pieces and selling them may not get what they're worth given the city's dire financial status. Having said that, holding the art/museum hostage was never a good plan, and many lenders felt the same (and many didn't).

 

[psuro]

I don't know for sure; there is some question to the total value of the art - a documentary I watched said there were really only a few dozen very valuable pieces and selling them may not get what they're worth given the city's dire financial status. Having said that, holding the art/museum hostage was never a good plan, and many lenders felt the same (and many didn't).

Art has value. Just ask him

 

[massimoManca II]

I fear IBM will be next.

Next?!?!?

Two words: John Akers

 

[lionlover]

I commend FoMoCo for taking this step for Detroit. Hopefully more to follow.

I commend you for your outstanding sig pic!

 

[lionlover]

This is one of the many reasons index funds are awful.

LdN

@sg out west

 

[L.A.Lion]

Next?!?!?

Two words: John Akers

Great kicker and his trolling Dallas fans at the draft was awesome!

 

[L.A.Lion]

And you just can't fight long-term demographics. There are limits to what government can accomplish -- liberals and conservatives both need to remember that.

Philadelphia was pretty much in decline from the 1920s till about the year 2000, but now it's a boomtown again. The city government made good moves and bad moves, but mostly it's just this demographic tidal shift. Cities are, for whatever reason, cool again.

Philly's population peaked around 1950, not 1920. The city suffered the same white flight into the suburbs and population decline that many (if not most) large Rust Belt cities experienced post-WWII.

 

[AvgUser]

So did my Uncle and then he moved out to KOP.

I worked at 30th street re-entry and currently work in KOP.