The weekend’s events

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    Posted: 19 March 2011 06:34 PM

    Well, the Libya situation certainly is evolving.  Fast.

    And the nuclear situation in Japan looks to be stabilizing somewhat, thankfully.

    Until the intraday topic goes up sometime tomorrow, might as well set up a placeholder topic to discuss the weekend’s events and the possible impacts on the markets next week.

    [ Edited: 19 March 2011 06:39 PM by Mav ]

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    Posted: 19 March 2011 06:52 PM #1

    Just my .02, but I think Japan still is the driver and if things start to improve over there, things should improve over here in our market. I am not concerned about Libya. The Colonel really has no ability to attack anyone and it is Europe who is really declaring war. Oh the hypocrisy, but I still support their effort. I would say lets take out all the dictators in the world, but then who would be in the UN? rolleyes  I know it is headlines, but it is SOP to take out an opponents surface to air capabilities. Command of the airspace is going to happen. Heck Italy is even on board, the 31st fighter wing out of Avaino will bring hell from above. Go get em boys.  :-D

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    Posted: 19 March 2011 07:25 PM #2

    Well the fact that today is Saturday and we have about 40 hours until the middle of the trading day on Monday will help.  The fighting will continue but we may get more clarity on where this little conflict is going.  I suspect we will open down but come back up by end of trading day.

    Apple has been battered but the hedge funds will take a few more shots at it.  With no numbers on iPad sales from Apple and uncertainty regarding supply, leaves room for more short selling.  I am still optimistic that with OE behind us, next Friday we should be back to 340.

         
  • Posted: 19 March 2011 07:29 PM #3

    I am watching 326 level. If it hits and bounces, then will open a small position….My target is 500 shares for long term hold…

         
  • Posted: 19 March 2011 08:01 PM #4

    Watching the ABC Evening news just now, while discussing the status of events in Japan, Diane Sawyer repeated the “shortage of IPad parts made in Japan” story. So I would expect that to also be a driver on Monday, and going forward; or until someone steps up and says “No, our parts are warehoused in China already.” Foxcon has already said they have about three weeks of Apple parts on hand.

         
  • Posted: 19 March 2011 09:02 PM #5

    willrob - 19 March 2011 11:01 PM

    Watching the ABC Evening news just now, while discussing the status of events in Japan, Diane Sawyer repeated the “shortage of IPad parts made in Japan” story. So I would expect that to also be a driver on Monday, and going forward; or until someone steps up and says “No, our parts are warehoused in China already.” Foxcon has already said they have about three weeks of Apple parts on hand.

    Well, we shouldn’t be surprised for a rumor to leave Diane Sawyer’s lips.  If parts were constrained, then wouldn’t Apple be irresponsible not to extend the 4-5 week delivery time?  They have some latitude by stretching out the international release date, but it’s still just a rumor.  Stepping back for some perspective, it’s pretty impressive that Apple’s supply chain makes the ABC Evening News…the iPad 2 is indeed viral.

         
  • Posted: 19 March 2011 09:27 PM #6

    Like I mentioned in the iPad 2 trend, if there’s a supply problem, Apple could limit the purchase to one per customer but so far, they didn’t change their policy. A lot of people buying two are resellers or people standing in line for resellers that will sell them on Ebay for twice the sale price.

         
  • Posted: 20 March 2011 02:20 AM #7

    Mercel - 20 March 2011 12:02 AM

    If parts were constrained, then wouldn’t Apple be irresponsible not to extend the 4-5 week delivery time?

    Maybe the current 4-5 week delay is because of Japan, and not because of “amazing” demand? Is 1-2 months next? Or a delay in the international rollout? That would not go over well for AAPL.

         
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    Posted: 20 March 2011 04:52 AM #8

    bick, I went over this in another thread not long ago.

    The last time Apple announced an international delay for iPad, it was with two weeks to go.

    The launch may seem like a trickle of iPads are shipping on Friday, but the important thing to watch for is if the launch continues as planned.  And if we hear nothing by Monday, it’s way, way too late to back out without angering untold masses of prospective iPad 2 buyers.  It was arguably too late this past week for a delay (beyond the Czech Republic anyway, if I’m hearing correctly).  Apple is usually silent in the face of FUD, but it knows better than to set an international launch date and then wait until such a short window of time to say “whoops, sorry no iPads, ‘incredible’ demand guys, come back next month.”  Apple does learn from its mistakes, and IMHO, last year’s “miscalculation” pushing back the international launch by about a month was one such mistake.

    If Japan did cause massive and material supply disruptions affecting the current quarter, Apple would not only advise about iPad 2 delays, it might even warn investors.  It’s not so “cool” or “different” a company to never do something like a profit warning:  It’s done this before in the Steve Jobs 2.0 era:  http://www.apple.com/pr/library/2000/dec/05q1results.html

    There’s three scenarios:

    1)  Apple has such extreme demand in the US (well, this part seems about right) that it’s vacuuming up 100% of production, causing not only an international delay, but what seem like tiny shipments from day to day.  Not likely to me.

    2)  Apple has the worst-case scenario of huge demand and not nearly enough supply.  Apple can only produce some pathetic run-rate of, say, 50,000 iPads 2s per day to start off (18.2 million or so per year) and none of that supply can be “stockpiled” for an international launch.  Also not very likely to me, especially considering who’s in charge of day-to-day at Apple right now.

    3)  Apple has a combination of extreme demand in the US and wants to launch very big internationally, but at the same time does have some ability to ship additional supply to the US even as it ramps up for the 24-or-so-country launch on 3/25.  Problem is, the supply is reduced on account of the international launch, leading to big shortages. 

    I’m going with Scenario 3.  Let’s not forget that two “compression” elements are at play here.  First, Apple is launching the iPad in the US and internationally within only two weeks of each other.  Second, all models, Wi-Fi and the +3Gs, are shipping simultaneously.  Instead of something like four sales events, we get a very close-together two.

    Apple may be planning to move a million iPads in less than three days after launch.  With the way the US launch went, I have little doubt they could hit that target.

    [ Edited: 20 March 2011 05:23 AM by Mav ]

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  • Posted: 20 March 2011 09:01 AM #9

    The whole basis of what is being done at Fukushima escapes me.  Several of the containment buildings have blown up.  All the buildings have been flooded with salt water.  None of the reactors can ever again be reused.  In this, I believe, there is no disagreement.

    The buildings contain plutonium which has a half life of 80 million years.  Let’s assume that through some miracle they can cool down the fuel rods through some kind of rigged system.  Does anyone on earth think that this will be acceptable for the next, oh, I don’t know, 500 million years?

    At some point these buildings will need to be leveled (with a large release of radiation) and buried in boron and concrete as was done in Chernobyl.  The only alternative is to bury them as they now sit and create six multiple-story concrete monuments.  This alternative solution would be a construction challenge.  How many people would need to be exposed for how long in order to pour enough concrete to cover these six units.  Not a possibility, IMHO.

    The solution they had at three mile island is not available in Fukushima.  At three mile island they were able to cool the nuclear fuel and remove it and ship it to “approved storage facilities”.  TMI, however, was not physically damaged.  It hadn’t been hit by a tsunami and it had not been impacted by several hydrogen explosions.


    Like many disasters people concentrate on the immediate issue without thinking about the end game.  I cannot help but think of the poor old man they showed on CNN.  He was shoveling debris from his collapsed home from one side of his side walk to the other.  On the personal tragedy level he was dealing with what he could comprehend.  At the nuclear disaster level the authorities continue to allow measurable levels of radioactivity to escape without addressing the real issue.  Because of the continuing escape of radiation they are not “buying time” before dealing with the end game.  They are exasperating the ultimate total damage from this disaster.  And possibly doing so at an alarming level, given that local food such as milk is reported to already have unacceptable levels of radiation.

    I guess this is how governments deal with most issues.  I’m not being political here, I mean all governments.  I can’t help but thinking of what we are doing in Libya.  Everyone agrees Gadaffy is an SOB.  But I haven’t heard one person tell us who exactly these “rebels” are.  All they say is that there won’t be an occupation.  Good!  A tribal nation being held together by a mad man and we’ll fix that by introducing anarchy.

    Oh, well enough venting for an early Sunday morning.

         
  • Posted: 20 March 2011 09:25 AM #10

    @ncgo4   : hopefully, you do not really know what you are talking about but useful to know what can go on into number of minds…

         
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    Posted: 20 March 2011 09:53 AM #11

    Hamourabi - 20 March 2011 12:25 PM

    @ncgo4   : hopefully, you do not really know what you are talking about but useful to know what can go on into number of minds…

    One must create fear, when calm minds are required.  The nuclear disaster while potentially devastating can stll be resolved.

    IEEE has some nice detailed coverage of the reactors

    http://spectrum.ieee.org/tech-talk/energy/nuclear/explainer-what-went-wrong-in-japans-nuclear-reactors

    [ Edited: 20 March 2011 11:57 AM by pats ]      
  • Posted: 20 March 2011 11:17 AM #12

    I don’t want to minimize the problems with the Japanese disaster, but we should not exaggerate them either. 

    The half life of Pu 238 is 87.7 years and that of Pu 239 is 24,000 years.  These are the plutonium isotopes of the greatest relevance here.  Pu 244 is the naturally occurring isotope, is relatively stable, and has a half life of 80 million years.

    There are also uranium isotopes to be considered.  These are probably more important than plutonium in the fuel.

    The decay products of iodine, cesium and strontium are probably of greater concern to human life but all of these are potentially very bad.

    Nobody believes that reactors 1 to 4 and probably 5 can be salvaged.  We don’t know about reactors 6 and 7.

    It is quite likely that there will be high levels of radioactivity in the area for a long time.  Although people may not be able to approach the site for clean up purposes, this is a great opportunity for Japanese ingenuity in robot design.

    I suspect that Japanese ingenuity will also show to good advantage in remedying any supply chain problems.

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    Posted: 20 March 2011 05:02 PM #13

    Will the $39 billion deal between AT&T and T-Mobile trump all other headlines? M&A Monday?

         
  • Posted: 20 March 2011 05:21 PM #14

    BrazilNuts - 20 March 2011 08:02 PM

    Will the $39 billion deal between AT&T and T-Mobile trump all other headlines? M&A Monday?

    This is a VERY big deal.  A plus for Apple and a minus for Android.  Not so good for AT&T, either.  Sprint?

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  • Posted: 20 March 2011 05:30 PM #15

    westech - 20 March 2011 08:21 PM
    BrazilNuts - 20 March 2011 08:02 PM

    Will the $39 billion deal between AT&T and T-Mobile trump all other headlines? M&A Monday?

    This is a VERY big deal.  A plus for Apple and a minus for Android.  Not so good for AT&T, either.  Sprint?

    Why do you say not so good for AT&T?