stock market was up today...

[Rasputin_Vol]

Bullish.

Russia and The Saudis are willing to risk short term pain if it means destroying domestic shale companies that have been borrowing like crazy just to keep the drills running. The end game could end up with The Saudis and Russia a bit lighter in the pockets while domestic shale is destroyed.

US shale oil now almost not worth drilling

“What they’re not saying is that they’re going to suspend activity,” Loughrey said. In his view, a typical well in the Midland sub-basin of the Permian requires $68 a barrel oil for investors to make an adequate return within 24 months.

Banks Get Tough on Shale Loans as Fracking Forecasts Flop

 

[Thunder Good-Oil]

They were lazy in their development of the 737Max and lives were lost as a result. Not only that, but that caused them to ground a plane and all orders for over a year now. Had they let the engineers actually engineer the plane and not have the designers handcuffed by bean counters or people from outside of the industry calling the shots, the 737Max would probably have been a success.

I'm not just picking on Boeing, because there are PLENTY of other examples right here in America that have followed this flawed model of not developing talent from the inside and pushing it up the management chain. Instead, these companies figure they ca just plug a vacancy in any company with a good manager, not matter their background. That may fly if you're just making crackers at Nabisco or somewhere. But if you are transporting people in your product or putting peoples lives in jeopardy, you need to have competent supervision running things.

Lots of past tense in your critique. The CEO has been on the job for 2 months.

Seems like grounding a plane while a cause of a possible malfunction is investigated and corrected is exactly what they should be doing. If lives have been intentionally put at risk because of the bean counters then there will be criminal charges brought.

Boeing isn't a public utility. They still need to provide a return to the owners in order to continue operations. Individuals that committed crimes will be held accountable.

I might buy some shares. BA is a great American company.

BTW, have there ever been lives lost in the business of gold? Miners? Anybody ever been murdered for their hoard? Have pirates ever killed over the booty? I'd reckon that their business of transporting people has a far better track record.

 

[05_never_again]

They were lazy in their development of the 737Max and lives were lost as a result. Not only that, but that caused them to ground a plane and all orders for over a year now. Had they let the engineers actually engineer the plane and not have the designers handcuffed by bean counters or people from outside of the industry calling the shots, the 737Max would probably have been a success.

I'm not just picking on Boeing, because there are PLENTY of other examples right here in America that have followed this flawed model of not developing talent from the inside and pushing it up the management chain. Instead, these companies figure they ca just plug a vacancy in any company with a good manager, not matter their background. That may fly if you're just making crackers at Nabisco or somewhere. But if you are transporting people in your product or putting peoples lives in jeopardy, you need to have competent supervision running things.

Muilenburg (CEO during the 737 MAX debacle) actually is an engineer. He came from the technical/engineering side of the business, not outside of the industry; according to Wiki he actually started at Boeing as an intern in 1985 and stayed with the company his whole career. He isn't one of these Harvard MBA or management consulting types. Maybe there's a beef to be had with McNerney, the CEO before Muilenburg (he is a management consultant who came from the outside with no industry background and ran Boeing from 2005-16, during the design of the 737 MAX).

Boeing knows exactly how to build a plane. They know that in order to do it "right," you let the engineers engineer it and go through a proper design process. They intentionally didn't go exactly by their book, which is even worse than being stupid or negligent. They were getting beaten to the punch by Airbus so they fast-tracked the entire build. It was a conscious decision they made, not one made out of ignorance by non-engineering types. If they waited, they in all likelihood would have built a safe plane, but Airbus would have eaten their lunch. Instead they built an unsafe plane and Airbus still ate their lunch.

 

[Velo Vol]

Boeing knows exactly how to build a plane. They know that in order to do it "right," you let the engineers engineer it and go through a proper design process. They intentionally didn't go exactly by their book, which is even worse than being stupid or negligent. They were getting beaten to the punch by Airbus so they fast-tracked the entire build. It was a conscious decision they made, not one made out of ignorance by non-engineering types. If they waited, they in all likelihood would have built a safe plane, but Airbus would have eaten their lunch. Instead they built an unsafe plane and Airbus still ate their lunch.

By how much?

 

[Rasputin_Vol]

Muilenburg (CEO during the 737 MAX debacle) actually is an engineer. He came from the technical/engineering side of the business, not outside of the industry; according to Wiki he actually started at Boeing as an intern in 1985 and stayed with the company his whole career. He isn't one of these Harvard MBA or management consulting types. Maybe there's a beef to be had with McNerney, the CEO before Muilenburg (he is a management consultant who came from the outside with no industry background and ran Boeing from 2005-16, during the design of the 737 MAX).

Boeing knows exactly how to build a plane. They know that in order to do it "right," you let the engineers engineer it and go through a proper design process. They intentionally didn't go exactly by their book, which is even worse than being stupid or negligent. They were getting beaten to the punch by Airbus so they fast-tracked the entire build. It was a conscious decision they made, not one made out of ignorance by non-engineering types. If they waited, they in all likelihood would have built a safe plane, but Airbus would have eaten their lunch. Instead they built an unsafe plane and Airbus still ate their lunch.

Mullenberg has only been the CEO since 2015. The 737Max was under development well before he got there. James McNerney is the CEO that made the decision.

James McNerney - Wikipedia

As Boeing's first CEO without a background in aviation, he made the decision to upgrade the 737 series to 737 MAX instead of developing a new model.

 

[Rasputin_Vol]

Lots of past tense in your critique. The CEO has been on the job for 2 months.

Bean counter...

Dave Calhoun - Wikipedia

Calhoun was born on April 18, 1957 in Philadelphia, Pennsylvania.[3] He grew up in Allentown, Pennsylvania, where he graduated from Parkland High School in 1975. In high school, Calhoun was one of three captains of the varsity basketball team and he played golf.[4] In 1979, he graduated from Virginia Tech with a degree in accounting.[3][4]

 

[05_never_again]

By how much?

I have no idea, but I'd say by at least a few years. They didn't re-design the plane to accommodate the larger, more fuel-efficient engines; the simply moved them up on the wing. When they found out during testing that doing so caused the plane's nose to rise too much during takeoff pitch at full power, they put the MCAS in there, but didn't tell anybody.

 

[05_never_again]

Mullenberg has only been the CEO since 2015. The 737Max was under development well before he got there. James McNerney is the CEO that made the decision.

James McNerney - Wikipedia

Muilenburg was the trigger man (actually made the call to go ahead and release the plane), and he was an engineer. Should have known better.

 

[Rasputin_Vol]

BTW, have there ever been lives lost in the business of gold? Miners? Anybody ever been murdered for their hoard? Have pirates ever killed over the booty? I'd reckon that their business of transporting people has a far better track record.

What the hell are you talking about? The 737Max is an example of negligence at worst, incompetence at best.

If you can find a similar example of negligence and incompetence in the mining industry, I'm sure you would also see those responsible for it being severly punished and business ruined.

 

[PEPPERJAX]

Lots of past tense in your critique. The CEO has been on the job for 2 months.

Seems like grounding a plane while a cause of a possible malfunction is investigated and corrected is exactly what they should be doing. If lives have been intentionally put at risk because of the bean counters then there will be criminal charges brought.

Boeing isn't a public utility. They still need to provide a return to the owners in order to continue operations. Individuals that committed crimes will be held accountable.

I might buy some shares. BA is a great American company.

BTW, have there ever been lives lost in the business of gold? Miners? Anybody ever been murdered for their hoard? Have pirates ever killed over the booty? I'd reckon that their business of transporting people has a far better track record.

I don’t know but a buddy of mine was panning for gold several years back and contracted giardia in a river. Does that count?

 

[Rasputin_Vol]

Muilenburg was the trigger man (actually made the call to go ahead and release the plane), and he was an engineer. Should have known better.

I'll give you that. But had he made the call to scrap it at that time, we are back to where we are right now. They had a decade of work and research tied up in a flawed concept. That falls back on the previous CEO.

And I realize that these guys make the big money to make the tough decisions, but imagine the reaction and pushback he would have gotten at the time if he would have done exactly what you say? he would have been fired anyways and they would have found someone else to give it the go ahead. The fact is that Boeing was going to release the 737Max regardless of what any one person said. They had far too much (time and money) invested in it.

 

[05_never_again]

I'll give you that. But had he made the call to scrap it at that time, we are back to where we are right now. They had a decade of work and research tied up in a flawed concept. That falls back on the previous CEO.

And I realize that these guys make the big money to make the tough decisions, but imagine the reaction and pushback he would have gotten at the time if he would have done exactly what you say? he would have been fired anyways and they would have found someone else to give it the go ahead. The fact is that Boeing was going to release the 737Max regardless of what any one person said. They had far too much (time and money) invested in it.

Yes, that's true. Muilenburg likely would have to convince a cadre of other executives and probably board members that the plane wasn't safe and shouldn't be released, which wouldn't be easy. But what's worse...a bunch of sunk costs in a flawed design, or a bunch of sunk costs in a flawed design that crashed, killed a bunch of people, and now nobody wants to buy your plane?

You'd think that anybody, even a "bean counter," would know that ultimately the price of deaths and the awful PR is way higher than being late with your plane relative to a competitor. If Boeing really thought that plane would crash due to a half-ass design, or that there was a good chance it would, there's no way they would have released it as it was. They knew they rushed the design, but they probably genuinely thought it was safe. I know it's so easy to frame large corporations as evil and only caring about money, but since they do care about money, there's no incentive to knowingly release a dangerous plane.

 

[Rasputin_Vol]

Yes, that's true. Muilenburg likely would have to convince a cadre of other executives and probably board members that the plane wasn't safe and shouldn't be released, which wouldn't be easy. But what's worse...a bunch of sunk costs in a flawed design, or a bunch of sunk costs in a flawed design that crashed, killed a bunch of people, and now nobody wants to buy your plane?

You'd think that anybody, even a "bean counter," would know that ultimately the price of deaths and the awful PR is way higher than being late with your plane relative to a competitor. If Boeing really thought that plane would crash due to a half-ass design, or that there was a good chance it would, there's no way they would have released it as it was. They knew they rushed the design, but they probably genuinely thought it was safe. I know it's so easy to frame large corporations as evil and only caring about money, but since they do care about money, there's no incentive to knowingly release a dangerous plane.

It would have been a tough sell. An impossible sell, imo. They would have either forced his hand or gotten him out of the way and found someone else to give it the greenlight. I think that is how it would have played out. Corporations nowadays have been conditioned to think that you can just change leadership and that will be the fix. That is only part of it. As you said, you also had sunk costs and years of R&D lost. Again, that is why they pay those guys the big bucks to make the big calls. But I think the bean counters and other financial pressures would have forced Boeing to move ahead with the 737Max launch sooner or later.

 

[05_never_again]

It would have been a tough sell. An impossible sell, imo. They would have either forced his hand or gotten him out of the way and found someone else to give it the greenlight. I think that is how it would have played out. Corporations nowadays have been conditioned to think that you can just change leadership and that will be the fix. That is only part of it. As you said, you also had sunk costs and years of R&D lost. Again, that is why they pay those guys the big bucks to make the big calls. But I think the bean counters and other financial pressures would have forced Boeing to move ahead with the 737Max launch sooner or later.

Of course it would have. You can't have an aircraft manufacturer run by only the engineers, a software company run by just the developers, a restaurant company run by just the chefs, etc. If you did, nothing would ever move forward, or you'd frequently move forward without real plans on how to get there. The reason the enterprise exists is to generate a return for its owners.

Ideally you have a person at the top who blends together technical skills with the management/business skills, but not every company has a Steve Jobs or Bill Gates. You're probably going to have a person that is weighted towards either the technical or the management side.

 

[Velo Vol]

I have no idea, but I'd say by at least a few years. They didn't re-design the plane to accommodate the larger, more fuel-efficient engines; the simply moved them up on the wing. When they found out during testing that doing so caused the plane's nose to rise too much during takeoff pitch at full power, they put the MCAS in there, but didn't tell anybody.

???

What's doomed 737 Max is commonly described as a software problem. Won't the plane work fine once the computers are fixed?

 

[05_never_again]

???

What's doomed 737 Max is commonly described as a software problem. Won't the plane work fine once the computers are fixed?

Who knows - they haven't fixed the computer yet.

IMO, it wasn't ultimately a software problem that doomed the plane. It was a project management problem; they rushed and half-assed it. The newer generation engines were too big. They didn't want to re-design their existing 737; that would take too long and Airbus had already beaten them to the punch on their A319/20/21 re-design. So they just moved the engines up on the wing, which changed the plane's center of gravity. In order to get the plane's center of gravity right, they put a computer in automatically adjusted it, but didn't tell the pilots, because that would mean more training (and therefore more time before it came to market). Yes, it turns out they screwed up the development of the MCAS itself too, but I don't view that necessarily the root cause.

It is possible to turn the MCAS off, but if you don't even know it's on the plane in the first place, obviously you can't turn it off.

 

[rjd970]

So what is the opinion on here? Has the market stabilized or do we have more big drops/gains in the short term?

 

[05_never_again]

So what is the opinion on here? Has the market stabilized or do we have more big drops/gains in the short term?

I'd expect a retest of the lows at some point over the next several weeks.

 

[Velo Vol]

I'd expect a retest of the lows at some point over the next several weeks.

Why did it bounce so high? I get a few percentage points but this is significant.

 

[VolStrom]

Hang on to your shorts, I don't think we've seen anything yet.

Coronavirus job losses could hit 47M, unemployment rate may surge to 32%, St. Louis Fed says

 

[05_never_again]

Why did it bounce so high? I get a few percentage points but this is significant.

Well, it fell 37% peak to trough, so that's significant too. Fastest 30%+ fall from a high of all-time, even faster than the Great Depression, 1987 crash, or 2008-09 financial crisis. Ultimately I don't know. Markets don't go down in a straight line, and the most powerful rallies occur in bear markets. There were gigantic rallies during the Great Depression and 2008 financial crisis too. Go take a look at the Dow's biggest percentage gains of all time...about half of the top 20 occurred from October 1929-1933, which were probably the worst 3+ years in the US economy's history. It's impossible to know exactly when, but panic selling inevitably gets exhausted, there's no supply for a period of time, so prices rise to a level where supply appears again.

Personally I would take it as a positive at this point that the market bottomed several days before Trump's lockdown extension, and when he extended it until 4/30 the market has actually continued to bounce. It other words it didn't fall further on new "bad" information. That tells me that the move lower that bottomed on 3/23 likely fully priced in the impact of the global economy being shut down through April. If it hadn't fully priced that in, we'd probably be trading lower than those levels already. If you're bullish, you'd always rather the market just go ahead and fully price in negative news and get it over with, and then you can rally if things turn out to be not quite as bad as you thought.

I think we could retest the low on some of the economic data coming in worse than expected, or perhaps for purely technical reasons of dip buyers losing interest (and short covering getting exhausted) and then needing to see that low retested and hold to truly confirm that there are buyers there. Other people will tell you we probably won't bottom until we peak in new virus cases.

 

[Thunder Good-Oil]

What the hell are you talking about? The 737Max is an example of negligence at worst, incompetence at best.

If you can find a similar example of negligence and incompetence in the mining industry, I'm sure you would also see those responsible for it being severly punished and business ruined.

I was referring to the gold INDUSTRY, not simply the mining aspect. You hate Boeing because a tiny fraction of their employees over a hundred plus year history made bad decisions. But you have a "sick love affair" with an industry which has a history associated with death and destruction.

 

[TheDeeble]

Who knows - they haven't fixed the computer yet.

IMO, it wasn't ultimately a software problem that doomed the plane. It was a project management problem; they rushed and half-assed it. The newer generation engines were too big. They didn't want to re-design their existing 737; that would take too long and Airbus had already beaten them to the punch on their A319/20/21 re-design. So they just moved the engines up on the wing, which changed the plane's center of gravity. In order to get the plane's center of gravity right, they put a computer in automatically adjusted it, but didn't tell the pilots, because that would mean more training (and therefore more time before it came to market). Yes, it turns out they screwed up the development of the MCAS itself too, but I don't view that necessarily the root cause.

It is possible to turn the MCAS off, but if you don't even know it's on the plane in the first place, obviously you can't turn it off.

Is there a link to these claims?

I'm having a hard time believing they installed components on the plane but no flight crews or aircraft maintenance knew they existed. Like anything else they would need maintenance at some point. It's not feasible to put something on a plane, tell no one, and assume it will work forever.

 

[05_never_again]

Is there a link to these claims?

I'm having a hard time believing they installed components on the plane but no flight crews or aircraft maintenance knew they existed. Like anything else they would need maintenance at some point. It's not feasible to put something on a plane, tell no one, and assume it will work forever.

Boeing's CEO explains why the company didn't tell 737 Max pilots about the software system that contributed to 2 fatal crashes

MCAS doesn't seem like a thing that would need "maintenance," per se. It was a computer that ran in the background of the flight control system - that's how Boeing rationalized not telling pilots about it.

 

[Rasputin_Vol]

I was referring to the gold INDUSTRY, not simply the mining aspect. You hate Boeing because a tiny fraction of their employees over a hundred plus year history made bad decisions. But you have a "sick love affair" with an industry which has a history associated with death and destruction.

That is where the flaw in your comparison is. You are comparing an industry to one incompetent/negligent company. The proper comparison would have been to compare Boeing to an equally flawed mining company.

And really, that wouldn't even be a fair comparison because mining and aerospace have different risks.