a380900
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 6:19 am

http://www.money.telegraph.co.uk/mon.../money/2005/03/10/ixfrontcity.html

It looks like Airbus, although I have read here and there on the forum that it sold its planes at a loss, is in fact a real cash machine!
 
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scbriml
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 6:23 am

A380900, you're absolutely right. Airbus either gives away its planes, or bribes the airlines to buy them. I expect their profit is just an accounting trick!  sarcastic 
Time flies like an arrow. Fruit flies like a banana!
 
a380900
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 6:35 am

So you think we're in for an "Enron" mishap in Toulouse?  Smile

The problem is that GWB is applying the Enron formula to the entire United States. So with the dollars sinking, Airbus sales and profits are bound for difficulties.

I think they should start selling their planes in euros.
 
N5176Y
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 6:42 am

Boeing's profits for the last full year were $7.78 billion.
 
atmx2000
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 6:57 am

Airbus still has dollar hedges right? Once those contracts end the profits should be impacted. As for selling in Euros, it doesn't do anything besides transfer the currency risk to the customer. The competitiveness of Airbus products won't be enhanced and will become a complicating factor in sales as customers will have to assess the differences in currency risk when evaluating a contract for Airbus's in Euros versus Boeing's in dollars.

As for your Enron BS, the dollar is where it was in the middle of the 90s near the end of the first Clinton term and start of the 2nd term, when US exports were the most competitive. I'm sorry Europe isn't going to get a competitive boost any longer from the Clinton administration's poor currency management after the Asian financial crisis.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
a380900
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:03 am

The dollar is losing its status as the only true reserve currency in the world, thanks in part to a loss of confidence in where the US is heading in terms of budget deficits. Broader concerns like military spendings and "mad dog" foreign policy is also an issue for the average international investor.

As the US loses this status, it will hurt, like it or not. It will make you regret voting for Bush. This guy has weakened the USA like nobody before. You'll see the results pretty soon in your neighborhood.

The world is knocking at the door and it is angry.
 
CX747
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:05 am

Thanks for your pointless anti-Bush rant. Concentrate on your countries own ridiculous foreign policys or better yet, your continued slide towards being a 3rd rate power.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
a380900
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:07 am

Your barking will not prevent Asian Central Banks from storing euros!
 
N5176Y
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:10 am

Perhaps A380900 would like to talk about the fact that France can't keep it budget deficits to within EU rules? The same rules it set up? (Just as an FYI, US budget deficits would be within EU rules) Perhaps you would like to to discuss France's 100%+ national debt as a percentage of its GDP? (Again, that makes us Americans look downright frugal!) Perhaps A380900 would like to discuss France's national work-stoppage today... the reason: too many working hours in 35 hour work weeks. And if you really wanna discuss economics, perhaps we should compare our unemployment rates.

[Edited 2005-03-13 01:14:11]
 
N5176Y
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:11 am

Quoting A380900 (Reply 7):
Your barking will not prevent Asian Central Banks from storing euros!

Who cares... what are they gonna do with their dollars? Through them into the market and make them worthless?? That's even BETTER for our exports and even WORSE for euro-priced exports!
 
LOT767-300ER
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:15 am

The dollar is losing its status as the only true reserve currency in the world, thanks in part to a loss of confidence in where the US is heading in terms of budget deficits. Broader concerns like military spendings and "mad dog" foreign policy is also an issue for the average international investor.

As the US loses this status, it will hurt, like it or not. It will make you regret voting for Bush. This guy has weakened the USA like nobody before. You'll see the results pretty soon in your neighborhood."

I told you to stop slacking in Microeconomics 101 and start paying attention on how to calculate export and import growth...jesus christ your statement makes squat sense.  Silly made me laugh though.
 
atmx2000
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Airbus And EADS Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:24 am

The problem is not budget deficits. The problem is the trade deficit, which was increasing at an exponential rate during the Clinton's 2nd term, partly due to the rising dollar. The trade deficit finally stabilized during the first year of Bush's first term. The trade deficit has to be dealt with, and part of the solution is letting the dollar go down to the levels it was at in the middle 90s. The other part of the solution would be switching taxation to the consumption side so that domestic production and exports bear less of the tax burden and imports bear more of it. Of course the rest of the world won't like it if this happens because their ability to export their way out of their economic problems will be greatly reduced.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Lufthansa
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RE: Airbus And Eads Soar With Jumbo-sized Profits

Sun Mar 13, 2005 9:28 am

lol,
guys guys guys guys,

Let's keept this on track....we're talking about Airbus products, not US Economics, and certainly not EU economics (is there even such a thing anymore?i cringe when i think there are only 3 countries, all without the euro, that are in decent shape....Don't do it Sweden, don't do it UK, dont do it denmark)

Anyway, that being said, it does seem Airbus should be congratualated. I would imagine a large part of this is off the strength of the A320 program.
Anybody with any more info?
 
N5176Y
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:28 am

The US budget deficit and trade deficit is definately a problem... but that's nothing compared to the foreign finanical disaster that would happened if the US actually fixed it.
 
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lightsaber
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RE: Airbus And Eads Soar With Jumbo-sized Profits

Sun Mar 13, 2005 9:30 am

Quoting A380900 (Reply 7):
Your barking will not prevent Asian Central Banks from storing euros!

Soon they'll be storing other asian currencies... In 20 years that will be China or India.

On topic: congratulations to a strong profit by Airbus. $2.4 Billion Euros is nothing to sneeze. This is obviously due to the market liking the 320/330/340/and 380. And to think MOST of the profits are from aftermarket parts and such in this industry. Airbus has some good years ahead of it!

Quoting N5176Y (Reply 3):
Boeing's profits for the last full year were $7.78 billion.

But much of it was from aftermarket parts for the civilian side. Long term Boeing needs to keep the planes out there needing the parts; this means selling more new airframes. Oh, they are FAR from exiting the business (737, 777, and 787), but they need to keep up the R&D which is a bit down.

Personally, I like the Embraer's!  Smile Although I would love to see a pw6000 or pw800 powered C-series.  duck  Seriously, maybe its being in the US where everyone seems to want more point to point service. I know that the A380 will have a profitable role between the largest 20 airports in the world; I just know my preference.

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
a380900
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RE: Airbus And Eads Soar With Jumbo-sized Profits

Sun Mar 13, 2005 9:33 am

It looks like nobody here grasps what is at stake about the dollar but it's off topic anyway.

I guess it's the reason why it will happen: nobody in the USA can make a fair assessment of the weaknesses and strengths. The dollar being unchallenged is a key aspect of American economic health. Well it is now challenged and Bush has unnecessarily accelerated this challenge big time.

Anyway. I don't really care but the world has something in store for the USA. It will be painful and dollar related.

[Edited 2005-03-13 01:37:11]
 
yul332LX
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RE: Airbus And Eads Soar With Jumbo-sized Profits

Sun Mar 13, 2005 9:33 am

Quoting N5176Y (Reply 8):
the reason: too many working hours in 35 hour work weeks.

... which gives France the highest productivity in the world. What's your point?
E volavo, volavo felice più in alto del sole, e ancora più su mentre il mondo pian piano spariva lontano laggiù ...
 
N5176Y
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:44 am

Quoting YUL332LX (Reply 16):
... which gives France the highest productivity in the world. What's your point?

Which means companies are less likely to hire people. (Kind of what happened here recently.)
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:48 am

French productivity: hiring people is so expensive that low productivity tasks are either not performed or performed by machines.

The high productivity in France really does not mean much as a performance indicator.

Just how off topic can you get?

[Edited 2005-03-13 01:48:56]
 
ozglobal
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:51 am

Quoting N5176Y (Reply 8):
Just as an FYI, US budget deficits would be within EU rules) Perhaps you would like to to discuss France's 100%+ national debt as a percentage of its GDP?

Sources, please?
When all's said and done, there'll be more said than done.
 
N5176Y
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:52 am

Quoting A380900 (Reply 18):
French productivity: hiring people is so expensive that low productivity tasks are either not performed or performed by machines.

The high productivity in France really does not mean much as a performance indicator.

Just how off topic can you get?

What he said.


What is EADS market cap and revenue? I can't seem to find it.
 
ContnlEliteCMH
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 9:56 am

Quoting A380900 (Reply 5):
The dollar is losing its status as the only true reserve currency in the world, thanks in part to a loss of confidence in where the US is heading in terms of budget deficits. Broader concerns like military spendings and "mad dog" foreign policy is also an issue for the average international investor.

As the US loses this status, it will hurt, like it or not. It will make you regret voting for Bush. This guy has weakened the USA like nobody before. You'll see the results pretty soon in your neighborhood.

The world is knocking at the door and it is angry.

Fortunately, some of us have a better understanding of the free market than do you. This Bush voter does not regret voting for Bush, and is probably never going to regret it. Why? Because I don't believe the U.S. President has the kind of power you seem to believe he has. We all got up and went to work when Clinton was in power, just as we do now that Bush is in office. And believe it or not, angry Frenchmen don't change that, either.

The might of the American economy is far, far more than just the value of its currency in international markets. The might of the American economy is far, far more than some set of voodoo impacts you think are going to put us in the can. The might of the American economy is due to productivity: the long, hard hours spent producing (something to which your country seems rather averse, given the state of your labor laws); the ability to get inexpensive capital to take risks in the market; the innovation of people who are motivated to be better today than yesterday; and the incredible freedom our consumers have to buy what we want, when we want to, from whom we choose, without nearly the regulation and taxation you "enjoy."

If you think the might of the French economy is tied so closely to your government, and/or your elected offiials, then the French economy is in far worse condition than it appears to be.

Boeing will be just fine. I suspect that EADS will be, also. Currency fluctuations are normal. And let's take a longer view. Suppose the American dollar never returns to the status it enjoyed in the 20th century. Is it not the historical lot of the dominators to relinquish their dominant position? Methinks France can attest to this.
Christianity. Islam. Hinduism. Anthropogenic Global Warming. All are matters of faith!
 
ozglobal
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 10:10 am

Quoting ContnlEliteCMH (Reply 21):

A300900's comments are out of line and uncalled-for, but so is your jingoistic response. You can both make your points more credibly if you refrain from slurring a whole nation in the process.
When all's said and done, there'll be more said than done.
 
ContnlEliteCMH
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 10:22 am

Quoting YUL332LX (Reply 16):
... which gives France the highest productivity in the world. What's your point?

According to whom and what measure?

http://www.statistics.gov.uk/cci/nugget.asp?id=160 says otherwise. Two disclaimers: this data is not for the past 12 months, and this is just one website. However, it shows a comparison of several methods for economic productivity. France comes out ahead in only one; in the others, they are ahead of the UK, but well behind the U.S.

Or, you can go to the World Economic Forum and take a peek. According to this group, based in Europe, France is so far down the list compared to the U.S. that you need a nuclear sub to find them.

http://www.weforum.org/site/knowledg...or.nsf/Content/KB+Country+Profiles

Here's another question for those who seem to think doom is knocking on our door. If the economy is here is just a sham, and our growth is an illusion, and the great and evil Bush is going to bring the world knocking on our door, to tear us down -- why does Airbus want to put a plant in the U.S.? I haven't looked, but I'll bet the majority of Airbus aircraft sales, in dollars, are outside the United States. In other words, they are going to get their revenue regardless of where they build the airplanes. So why put it here, if they can put it in France, or somewhere else where the world is not "knocking on our door?" Why put it here, when supposedly the French worker outstrips us (a dubious assertion.)

The answer, of course, is simple and twofold. It's a pure win-win for EADS. If our French friend is wrong (and he probably is), then the dollar is not going to crash, the world is not going to take us down, and our prosperity is not an illusion. Building a plant here under such an optimistic future means that they can take advantage of the most productive economy in the world, and employ the hardest working men and women in the world. Trained workers who will work more than 35 hours per week, and relationships with suppliers who benefit from the same economy mean higher output for less cost, and higher quality. Second, if our French friend is right, and the eeeeeeeviiiiill Americans, under the spell of that sorcerer Bush, see doom and gloom, then the dollar drops. Unemployment goes up, which drives wages down. So then they get to build their planes for less, and sell them to foreign currencies and make more money by virtue of the weakened dollar at their American plant. Either way, they probably stand to keep their profitability. Ask the Japanese and German automakers.

Of course, any smart individual would prefer the first scenario to the second. Anybody who thinks that a flagging U.S. economy is good for the world has been drinking too much French wine.
Christianity. Islam. Hinduism. Anthropogenic Global Warming. All are matters of faith!
 
ContnlEliteCMH
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 10:36 am

Quoting OzGlobal (Reply 22):
A300900's comments are out of line and uncalled-for, but so is your jingoistic response. You can both make your points more credibly if you refrain from slurring a whole nation in the process.

If that's slurring, may I suggest you acquire some thicker skin? I know our French friend does not speak for the whole of France, just as you know that I do not speak for the whole of America. But let's call a spade a spade: the French economy is no panacea, and not exactly the shining model of might on the planet. If the French people are content with their economy, then I salute them. They have productive, profitable enterprises (e.g. -- EADS) just as we do. And they do it despite some obvious self-imposed handicaps, like madcap strikes by unionized labor, and labor laws that penalize hard work. This isn't slurring; it's telling the truth.

The difference between me and A380900 is that he bellies up to the point of wishing us ill-will. Oh, the world's got something for us! Mmmm hmmm.

As for being jingoistic -- not really. I believe those things I said, and I know lots of people who do as well. That's why I quit a nice job to start my own company. I wanted to take more risk, take advantage of cheap capital, and improve the productivity of my clients by plying my trade. You can be sure no number of angry Frenchmen will change any of that, except perhaps to make me work harder and innovate even more. Sometimes people just want to make things more complicated than they really are, but economics is a simple matter: freedom + innovation + hard work = profit! It's surely been true for me, and I'm just an average American.
Christianity. Islam. Hinduism. Anthropogenic Global Warming. All are matters of faith!
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 10:39 am

Overconfident dudes are in for some disappointments. What is happening today in the world economy has no precedents. Hard to see who will benefit. What is certain is that the dominating position of the US is eroding fast.

Today, every central bank and every oil producing can independently decide to cut dollar reserves or trade in euros. That is new stuff. Those who can't see that are just nationalistic bullies... Asian Central banks have a gun on the US head in particular.
 
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mariner
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:00 am

Oh, for pete's sake, enough with the kindergarten monetary debates.

The world has has other reserve currencies before, notably sterling, and survived just fine.

And Britian has survived just fine since sterling lost its role as a reserve currency.

The US and Europe - especially Germany and France - have been playing games with the dollar since the end of WW2, when the Europeans were extremely unhappy with perceived "Dollar Imperialism."

But if you want to debate all this, go to a finance board and learn from people who know what they are talking about.

This is not the place for it. This thread is about the profit at EADS. Get a grip.

cheers

mariner

[Edited 2005-03-13 03:01:31]
aeternum nauta
 
co7772wuh
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:01 am

Quoting ContnlEliteCMH (Reply 21):



Quoting A380900 (Reply 5):
The dollar is losing its status as the only true reserve currency in the world, thanks in part to a loss of confidence in where the US is heading in terms of budget deficits. Broader concerns like military spendings and "mad dog" foreign policy is also an issue for the average international investor.

As the US loses this status, it will hurt, like it or not. It will make you regret voting for Bush. This guy has weakened the USA like nobody before. You'll see the results pretty soon in your neighborhood.





The weaker dollar is helping US exports as well as the US economy . Which in turn is hurting some economies in Europe . As it has the A380 . They must now sell about 50 more to break even , which I am sure they will by the way .

As high as the US deficits are , the deficits and economies in Europe are doing rather poorly compared to the US ! The US GDP is growing at about 4% , with 5.4 unemployment compared to France and Germany with GDP growth below 2% and unemployment above 10% .

The 35 hour work week the French government made law , is responsible for the deaths of over 14,000 French elderly people in the summer of 2003 !

I think you should be directing your anger at your own government not GW !



[quote=A380900,reply=5]The world is knocking at the door and it is angry.

Not angry ! Jealous !


4 more years !
 
ozglobal
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:10 am

Quoting ContnlEliteCMH (Reply 24):
If that's slurring, may I suggest you acquire some thicker skin?... As for being jingoistic -- not really. I believe those things I said, and I know lots of people who do as well.

i) No thanks, I'll continue, like you, to expect common courtesy.

ii) Re-read your posts, listening to the TONE.

iii) How does believing what you say ensure against jingoism?

iv) Quite happy to listen to the facts, but that's difficult during a tribal skirmish
When all's said and done, there'll be more said than done.
 
supa7E7
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:12 am

Since this hasn't been said, I am sorry to France and the EU and others for my monkey-led government. It's not my fault and I am deeply, horribly ashamed. Please accept my personal apology for Pres Bush's leadership. Beware a democracy of poorly educated / illiterate people; it can be dangerous. Our founders knew this, but their wise influence is long gone.

Go Airbus, go Boeing, go Embraer and go Bombardier.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
co7772wuh
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:44 am

It's like this !

A few countries wanted to have a strong currncy in Europe !

Well now , they have it !

However , the Evil ,Stupit Goerge W Bush somehow was able to make there stronger currency work against them and help the bad , aweful US economy !

GW is pro US unlike previous presidents and that's just one of the reasons I voted for him .

Word advice , don't under estimate GW ! Because if you do ! You are only going to get frustrated and angry ! And that's no way to go through life !
 
AvObserver
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:46 am

Thanks, A380900, for disguising another anti-U.S. rant as an Airbus/EADS congratulatory thread. I'm no Bush fan but if you want to do this sort of thread, do it the non-av forum where it really belongs; it's obvious you really wanted to stick it to the U.S., instead of simply praise Airbus and EADS. Lufthansa should've started this thread, at least he'd do an honest analysis of their success and not a venom-filled shot at the U.S. It's fine if you want to conduct a tirade about U.S. economic and policy failures; just don't do it under false pretences. For all of the space you used in your posts, very little of it was about kudos to Airbus/EADS. Let's call a spade, a spade, from now on, if you know what I mean.  biting 
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 11:56 am

I used to love the US. Yet, like many people around the globe I will not forgive them for slaughtering helpless people. I hoped the US people would save their honor by showing Bush the door.

They did not but they were only the first line of defense against Bush. Now, the world is knocking at the door and will take advantage of the weak position in which the Bush Regime has put the US. It's gonna be fun to watch as so many "America first" bullies will realize that the world pulled the plug.

You don't play tough when you're burried into debts. It's as simple as that.
 
N5176Y
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:00 pm

Quoting A380900 (Reply 32):
You don't play tough when you're burried into debts. It's as simple as that.

Is that French philosophy?
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:06 pm

Is that French philosophy?

You can call it that. Or common sense.
 
co7772wuh
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:06 pm

Quoting A380900 (Reply 32):
They did not but they were only the first line of defense against Bush. Now, the world is knocking at the door and will take advantage of the weak position in which the Bush Regime has put the US. It's gonna be fun to watch as so many "America first" bullies will realize that the world pulled the plug.

This guy is off his rocker !

I don't know if we should call Home Land Security or get this guy checked in somewhere !

You have to stop lissening to Allah !  crazy 
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:11 pm

This guy is off his rocker !

I don't know if we should call Home Land Security or get this guy checked in somewhere !

You have to stop lissening to Allah !

You are going to be fun to watch!

Anyway you showed us what is really behind Bush's policy. Good old racism.

Enjoy this thread before it is deleted at the request of so many "America First" bullies who, as we all know, enjoy free speech more than anything.
 
daedaeg
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:22 pm

I doubt if A380900 is really French. He's probably another self-hating American who can't get over the fact that Bush won.

Anyway EADS is certainly a well run company. It will be interesting to see if it will continue on the upward swing as the value of the euro increases against the dollar and the new ego-driven leadership take the helm.
Everyday you're alive is a good day.
 
co7772wuh
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:30 pm

Yes , I agree .

This guy is on something

[Edited 2005-03-13 04:34:19]
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:33 pm

The USA is in a dire financial position. The dollar is on the spot. The interest rates are going up. Things could turn sour anytime.

The reaction of some people on this forum makes me think that the next US policy move wil be to bomb the central banks everywhere in the world. That would be consistent with the last 4 years!
 
B2707SST
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:35 pm

Sorry to disappoint, but our public debt is smaller than most of the major European economies and about half of Japan's.

http://www.cia.gov/cia/publications/factbook/fields/2186.html

GDP growth rates in the US are the highest in the developed world. Unemployment rates are approaching the generally accepted full-employment level of about 5%. Interest rates are returning to a neutral level after hitting near-record lows because economic growth has allowed the Fed to gradually remove monetary stimulus; rising interest rates will help the dollar by attracting foreign investment. Demand for US securities, including Treasury bonds, remains quite strong despite the hand-wringing among the punditocracy.

Quoting A380900 (Reply 25):
Today, every central bank and every oil producing can independently decide to cut dollar reserves or trade in euros. That is new stuff.

Asia and part of the Middle-East are running trade surpluses versus the US, and because they sell us more than they buy, they are accumulating dollar holdings. There are three things you can do with dollars:

1 - Hold them
2 - Buy US securities
3 - Buy US exports

Most of these central banks, especially those in Asia, are holding dollars to keep their currencies artificially weak versus the dollar because their economies are export-driven. They can nominally convert to the Euro if they want, but they must continue to purchase dollars or face breaking their pegs or managed floats to the dollar and therefore suffering decreased export competitiveness.

Quoting A380900 (Reply 25):
Asian Central banks have a gun on the US head in particular.

Nonsense. Asian countries need US demand a lot more than we need their cheap products: their economies are far, far more trade-dependent than we are.

Low-cost imports are keeping US inflation under control despite extraordinarily loose monetary policy, and the capital inflows from these countries are in large part covering our federal budget deficits. If the spigots from Asia were suddenly turned off, either due to protectionism or a sudden drop in the dollar, there would definitely be pain here. Prices would rise and Americans would be forced to shoulder more of the fiscal deficit. However, Asian economies would be devastated, as they were in 1997-98, when currency speculators like Soros forced Asian central banks to exhaust their dollar reserves and ultimately abandon their pegs.

Several economists are calling the current regime "Bretton Woods Two," because the US and Asian central banks are in an informal, somewhat uneasy, but persistent and relatively stable relationship. The real long-term fixes for the US twin deficits are a higher domestic savings rate and sounder fiscal policy, perhaps accompanied by a gentle and mild decline in the dollar.

Asian nations will gain nothing by abandoning the dollar; they would doom their economies because Europe does not have the economic growth rates or consumption capacity to absorb their exports.

To get back on topic, even if this happens, a weaker dollar will be good for Boeing and bad for Airbus. There is no way around this when Boeing's costs are dollar-denominated and Airbus' are euro-denominated, and currency hedges don't last forever.

--B2707SST

[Edited 2005-03-13 04:39:52]
Keynes is dead and we are living in his long run.
 
co7772wuh
Posts: 381
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:38 pm

Quoting A380900 (Reply 39):
The USA is in a dire financial position. The dollar is on the spot. The interest rates are going up. Things could turn sour anytime.

Get a life !
 
a380900
Posts: 801
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:42 pm

Co7772wuh,

Just check a finance website dude. You do think the USA are invulnerable and stuff. There is more to life than laser guided missile. You'll find out soon.
 
Lufthansa
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:48 pm

Quoting Daedaeg (Reply 37):
I doubt if A380900 is really French. He's probably another self-hating American who can't get over the fact that Bush won

Hmmm, I am wondering if we are talking about a certain somebody with "November" in their username?
 
co7772wuh
Posts: 381
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:49 pm

Quoting A380900 (Reply 42):
Just check a finance website dude. You do think the USA are invulnerable and stuff. There is more to life than laser guided missile. You'll find out soon.

I think you got hit in the head with a laser guided missile !

Please, go see a doctor and get help ! hypnotized 
 
a380900
Posts: 801
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 12:57 pm

B2707SST,

Thanks for your detailed answer. The problem with US debt is the rate at which it increases. There are open ended commitments like the "war on terror" (whatever that means). Moreover, some commodity trading switching to euro could have a huge psychological impact. Venezuela, Iran, Russia (90% of its oil goes to the EU), all independent actors, are candidate for switching to euros.

For the accumulation of dollars by Asian countries, of course they have some interest in this bargain. Anyway it cannot last forever and that is what is at stake. They are independent actors and if the trust in the long term value erodes, then one by one, central banks will shift their reserve. And there is only one way they can go, that is out of the dollar. India and Russia have chosen this path. China has decreased the $ share in its reserve. India is less than 50% dollars. Japan ans South Korea have hinted that they could diversify.

The dollar is nothing but a disaster waiting to happen. Sorry for the "America First" Bullies.
 
B2707SST
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 1:16 pm

Quoting A380900 (Reply 45):
They are independent actors and if the trust in the long term value erodes, then one by one, central banks will shift their reserve.

Then what are they going to do with their dollar holdings? As long as American demand is driving their export-based economies, dollars are pouring into their banking systems and they have to do something with them. These very countries have the most to lose if the dollar goes into freefall.

Last time I checked, the US' openness ratio ([imports + exports] / GDP) is about 0.15. Trade is still not a big part of the US economy. We are not that dependent on cheap imports or foreign capital inflows. By contrast, many trade-dependent Asian nations have openness ratios of 0.7 or higher and net exports make up a huge fraction of their total GDP. They simply cannot afford a weak dollar.

This is why I said Asian central banks can nominally choose to switch their holdings to euros, just as Airbus can sell their planes in dollar terms, but all they are doing is veiling the situation. The underlying economic realities do not change: if China wants to peg the renminbi to the dollar, it must continue accumulating dollar reserves. There are accounting tricks (swaps, futures, repo agreements, etc.) that technically let you hold your balances in euros, but when all is said and done, you're still captive to the dollar.

--B2707SST
Keynes is dead and we are living in his long run.
 
a380900
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 1:32 pm

B2707SST,

Then, why is the dollar dropping? More precisely, why is the dollar dropping precisely when the Central Bank of South Korea is saying it will diversify ?(that's how it was first understood anyway)

I agree to your statement about the yuan peg. All is in the "if". Now, even Asian countries are printing money in order to buy dollars and maintain the peg. This is not a stable equilibrium (one that goes back to its previous if you change it). It is an unstable equilibrium (one that goes further away from its initial state if you change it).

Besides, there is nothing new under the sun. The Vietnam war was ended by the end of the gold standard. If the US citizen are willing to get ripped of by their locusts of the military industrial complex every 30 years, fine with me.

Bush weakens the United States. It may sound weird to US bullies today (I do not count you in) but it will be evident to everyone soon enough.
 
sllevin
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 1:58 pm

Quoting A380900 (Reply 47):
Then, why is the dollar dropping?

The dollar has dropped for precisely one reason: US interest rates are extremely low, and it's not attractive to leave cash in dollars when it can earn even significant short term gains in the money market in other regions.

Such actions are beneficial to a country if you want to increase the cost of imported goods (thus increasing demand for domestic goods, thus increasing the performance of the domestic market), but have to be hedged against runaway inflation.

Currently the US has avoided the inflationary demons while keeping the cost of money very low.

I won't address the politics other than to say that the majority of Americans disagree with Europeans over what the "right thing" is. It's not just a single person.

Steve
 
Lufthansa
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RE: Airbus And Eads Soar With Jumbo-Sized Profits

Sun Mar 13, 2005 2:00 pm

You know A380900, in the very article you qouted to start this thread Airbus directors were speaking about how the A380 break even point is going to be even higher as a result of the lower dollar....that makes American products more affordable to the globe and European products more expensive to the globe.... That, as a whole, is generally not good for europe.

Sure, when one travels or wished to purchase expensive imported items it helps, but, I would be far more concerned about declining exports.

The other thing is, a higher interest rate(real interest rates, not nominal...so we are talking about adjusted for inflation here) will attract a greater amount of foreign investment, which will fuel economic growth. That, both creates jobs, and GDP growth... in other words, living standards improve.

A strong dollar isn't necessairly a good thing..... A strong euro is proving to be a bad thing. Don't believe me? It is just one of the reasons so many jobs in Germany and France are going to Poland and the Czech republic.

[Edited 2005-03-13 06:02:45]