DM&E Financing revisited.

[Anonymous]

BTW

Since BNSF is publicly opposing the DM&E expansion.....

......doesn't that make BNSF a NIMBY?

I'm starting to hate NIMBY's too.  Just last week I decided to fire up the old Methlab, and the dang nimby's next door called the cops.  SPOIL SPORTS!!  wasn't even in THEIR back yard

[Anonymous]

And what is the "worst" that may come to pass?  That we the taxpayers get to own our own railroad for a change?  And this is bad because..........?

They would get to own a railroad  who's prospects for running profitably were so poor that it couldn't attract private investment to build it's own plant,.. for one

A railroad that even with a gov't loan, STILL  couldn't earn it's own keep (remember, we are assuming failure here because you posed the 'what if?")...for another

And, because deferred maintenance is the early refuge of a declining railroad, if such a failure did materialize, my heartfelt suspicion is that the condition of the repossessed plant would  end up being fit for the scrapper only.

In a nut shell, if this is such a great deal, then why isn't private money just dying to jump into it?  That is the litmus that I  use to validate my related concerns.

Here is why I suspect they (private sources of capital) are not overly enthusiastic.

Let's assume that once the plant is rebuilt with the $2.5B, that it ends up being worth $3B.  Just as a given, OK?

That still assumes that a buyer could be found with an interest in paying $3B to buy then  operate it.

Something just tells me that if DM&E trys their best, and fails.. lets say that the Borg decides to undercut the rate structure and DM&E (in consequence)  never gets traction to build market share...how many buyers would be jumping at the opportunity to stick their head in the same barrel?

My guess is very few. Not for the full $3B anyway.

So, the value of the repossessed collateral becomes a fraction of the assumed value up front

Shrinkage on a massive scale. with Joe Taxpayer holding the bag.

[nanaimo73]

FM-

I'm not against DME moving into the PRB. I'm against your terminology, which is backwards. BNSF is being pro-capitalist, because they want to maximize profits. DME is being anti-capitalist, (socialist), if they use Government money to lower BNSF's and UP's profits.

[Anonymous]

NSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

My take on that would stem from a favorite saying by a very very wealthy former employer.

He would always tell me that an absolute fool was the most threatening form of competition  you could ever have to face. Because they will drive themselves to the poor house trying to take business away from you. (fwiw)

So, if the competition is destroying themselves and you in their struggle to gain market share, THAT is not good for capitalism

Oh brother!

I suppose that DM&E is the "absolute fool" in your metaphor, wherein the entry of DM&E into the PRB will end up destroying all three railroads?

Such pedanticism!

Let's use that same analogy to describe what's going on in Montana - BNSF then would be the "absolute fool", abusing the monopolistic powers so much so that we end up with re-regulation of all the railroads.

Based on what we've seen coming out of DC, which version of the metaphor has a better chance at experiencing reality?

Personally, I think the metophor is a bit of an exaggeration in both cases.

 

Now, regarding deep dark conspiracy theories, how can you sit there and hype up some kind of internal DM&E plot, all the while ignoring the oddly out of character tactics of the Mayo boys?  Isn't it odd that Mayo is getting so absurding out of whack regarding DM&E's line improvement project, when....

A.  That line has been there for over a hundred years

B.  Mayo located right next to the line of their own volition

C.  Mayo has recieved some nice transportation benefits from this line over the years, and will probably continue to benefit as such

D.  There are literally thousands of medical establishments located next to busy raillines across the nation, some far busier than the DM&E line will ever be, yet we hear not a peep of concern from those establishments

Put 'em all together, and something fishy is going on, because with all the apriori evidence one would conclude that Mayo has nothing out of the ordinary to be concerned about, certainly not to the point of making an international incident out of the matter.

Who's really behind the Mayo front?  Shouldn't we have access to all such pertinent information?

Why all the secrecy?

Oh, and not to *change* the subject , but.....

 BNSF is a NIMBY!

[Anonymous]

 In the meantime, could you please answer or at least clarify your inference that:

"Increasing competition = anti-capitalism"

Specifically, why do you apparently agree with BNSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

I would say that pro-capitalism would be capitalists pooling their capital to make a good return on their investment. Therefore, pro-capitalism would be BNSF trying to make maximum profits.

Anti-capitalism would be socialism, basically any form of Government involvement. In this case, DME entering the PRB with 2 billion Government dollars.

Government dollars in this case are going to curtail BNSF's and UP's profits, aren't they ?

That's the BIG LIE being bandied about, because both BNSF and UP have taken government dollars over hundreds of years, more specifically they've taken FRA loans for their PRB project a while back, so why not DM&E?

And conversely, if DM&E is not worthy of federal aid for it's railroad, then shouldn't the *pro-capitalists* BNSF and UP be forced to pay back their federal aid?  And I mean ALL OF IT, STARTING WITH THOSE FIRST LAND GRANTS!  You can't describe one set of entities as being pro-capitalist based on the relevent variables, then turn around and describe the second entity as being anti-capitalist based on those exact same variables.

There used to be a saying - "What's good for the goose is good for the gander" - an apt harbinger to oppose general discrimination.  Is not what's good for BNSF and UP also good for DM&E and others?

[Murphy Siding]

I think you are just looking for any reason to drag this out and deny it for as long as possible.  Certainly your right to do that, just as it is mine to completely disagree. 

"drag this out"?

     Come on AG- quit dragging this out.  Call the STB now, and give them your approval, so we can get this show on the road.

     The fact that it is being *drug out* makes me think that there are some higher ups that are skeptical, and want some reassurance as well.

[nanaimo73]

 In the meantime, could you please answer or at least clarify your inference that:

"Increasing competition = anti-capitalism"

Specifically, why do you apparently agree with BNSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

I would say that pro-capitalism would be capitalists pooling their capital to make a good return on their investment. Therefore, pro-capitalism would be BNSF trying to make maximum profits.

Anti-capitalism would be socialism, basically any form of Government involvement. In this case, DME entering the PRB with 2 billion Government dollars.

Government dollars in this case are going to curtail BNSF's and UP's profits, aren't they ?

[Poppa_Zit]

"I doubt that AA intended from square one, to ultimately end up
compromising it's integrity to the extent it  did.  The size
of  client that Enron was, and AA's hopes of keeping the client
happy, probably played a role in an evolved form of complicitness.


I do think there is a valid parallel, if for no other reason than to
establish that we are in an era of monumental collapses that ultimately
left somone holding the bag.  Due caution does not seem at all
foolish to me, in the spirit of  "an ounce of prevention"



Boy, where were you during the Savings & Loan Fiasco? <grin>

The US taxpayer really took it in the shorts on THAT one.

[Murphy Siding]

Any railroad is welcome to borrow (or take outright) from the feds and keep all the corporate secrets in the dark, as long as the amount of the loan (or grant) is only a *small* percentage of that company's net worth, or at least a smaller percentage than that represented by the DM&E example? 

For the sake of argument, what exactly is that dividing line?  Legally?  Morally?  Practically?

Good grief man, are you really that obtuse, or are you just trying to crawl under my skin?

It's a matter of what would be left, should the worst come to pass.

      It appears, that what would be left would be a heavy duty coal line from the PRB to the Mississippi River.  Details beyond that are.....*secret*.

[Murphy Siding]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

Fair enough.  When Murphy gives the go ahead, we can hash it out.

In the meantime, could you please answer or at least clarify your inference that:

"Increasing competition = anti-capitalism"

Specifically, why do you apparently agree with BNSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

      Here's an idea-start a new thread?

    (ps: might be an apple, not a spud?)

[solzrules]

"drag this out"?

Drag WHAT out?  Whether or not I happen to agree is going to have any effect on ?what?  lol!

Sorry man, but as a taxpayer I feel like public monies are mine (in part) I guess that is a bad habit I need to break. I think it has always been one of our society's shortcomings to see the community chest as some form of endless fountain for all to siphon from, or a pinata there for all to take their best shot against.

Oh whatever.  We've been around this ground probably 800 times.  Here we have a gov't lending agency with a good track record supplying low interest loans to create good paying jobs and they are still out to screw us, right?  How many layers of oversight do you want?  Better question:  How many of your tax dollars are you willing to spend investigating wether or not your tax dollars can be loaned out?  heck, by the time that's over with the FRA would have to charge a 90% APR just to cover their costs for researching, investigating, researching, investigating, researching, investigating, blah blah blah. 

And I've only been advancing the spririt of this debate in the same sense I would if any other entity tried to borrow money from me, while declining full disclosure.

If you were the lender and the applicant refused to fully disclose their business plan you would have every right to refuse the loan.  You aren't, so your business in this matter is irrelevant.  The DME HAS provided full disclosure to the FRA.  I think you're just upset that the FRA doesn't mean you.

As far as "what skeletons DM&E may be hiding", well, how would I know? THEY ARE THE ONES DEMANDING secrecy. Must be pretty juicy though otherwise they wouldn't be so dead set on hiding it. 

I fail to assume a massive scandal just because they don't tell me all the inner workings of their company. 

[Anonymous]

BTW

Since BNSF is publicly opposing the DM&E expansion.....

......doesn't that make BNSF a NIMBY?

[Anonymous]

Any railroad is welcome to borrow (or take outright) from the feds and keep all the corporate secrets in the dark, as long as the amount of the loan (or grant) is only a *small* percentage of that company's net worth, or at least a smaller percentage than that represented by the DM&E example? 

For the sake of argument, what exactly is that dividing line?  Legally?  Morally?  Practically?

Good grief man, are you really that obtuse, or are you just trying to crawl under my skin?

It's a matter of what would be left, should the worst come to pass.

And what is the "worst" that may come to pass?  That we the taxpayers get to own our own railroad for a change?  And this is bad because..........?

[Anonymous]

NSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

My take on that would stem from a favorite saying by a very very wealthy former employer.

He would always tell me that an absolute fool was the most threatening form of competition  you could ever have to face. Because they will drive themselves to the poor house trying to take business away from you. (fwiw)

So, if the competition is destroying themselves and you in their struggle to gain market share, THAT is not good for capitalism

[Anonymous]

I think you are just looking for any reason to drag this out and deny it for as long as possible.  Certainly your right to do that, just as it is mine to completely disagree. 

"drag this out"?

Drag WHAT out?  Whether or not I happen to agree is going to have any effect on ?what?  lol!

Sorry man, but as a taxpayer I feel like public monies are mine (in part) I guess that is a bad habit I need to break. I think it has always been one of our society's shortcomings to see the community chest as some form of endless fountain for all to siphon from, or a pinata there for all to take their best shot against.

And I've only been advancing the spririt of this debate in the same sense I would if any other entity tried to borrow money from me, while declining full disclosure.

As far as "what skeletons DM&E may be hiding", well, how would I know? THEY ARE THE ONES DEMANDING secrecy. Must be pretty juicy though otherwise they wouldn't be so dead set on hiding it. 

[Anonymous]

Any railroad is welcome to borrow (or take outright) from the feds and keep all the corporate secrets in the dark, as long as the amount of the loan (or grant) is only a *small* percentage of that company's net worth, or at least a smaller percentage than that represented by the DM&E example? 

For the sake of argument, what exactly is that dividing line?  Legally?  Morally?  Practically?

Good grief man, are you really that obtuse, or are you just trying to crawl under my skin?

It's a matter of what would be left, should the worst come to pass.

[solzrules]

And so why should the government treat the DME any different than it did BNSF or UP when they made the same applications?

BNSF and UP are not the subject at hand.  What happened 5 years or 10 years ago on seperate matters entirely are not at issue, and even if they were,.. since when do two wrongs make a right?

the very  rationale smaks of "well gee, everybody else is doing it" and I just find it impossible  to sympathize with that mindset.  sorry.

(plus, in the case of BNSF and UP, how did the net proceeds of the  respective transactions compare to their net worth at the time?  Merely speculation I'll conceed, but my gut tells me that in the event they would have defaulted, the collateral they had riding on the line was substantially more than one auxillary rail corridor?  Am I wrong about that?)

No you aren't.  Can't argue there.  But then again, what would the BNSF's and UP's costs be in today's dollars compared to the DME application?  Me thinks about the same. 

If past history does not apply in this case then why are you demanding special treamtent for the DME if no prior FRA loans have been defaulted on and other railroads have proven that they can use the loans and repay them in a responsible fashion?  Why treat this loan like it is the first of its kind ever? 

I think you are just looking for any reason to drag this out and deny it for as long as possible.  Certainly your right to do that, just as it is mine to completely disagree. 

[Murphy Siding]

  It would be ironic given that in the 80's CNW was trying to pull up the tracks.  My how times have changed! 

     CNW was trying to pull up the tracks in the 80s, because they knew what DM&E has since figured out.  Whithout something big, like Powder River Basin coal, it was just a worn out grainger line with not enough traffic to support it.

[Anonymous]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

Fair enough.  When Murphy gives the go ahead, we can hash it out.

In the meantime, could you please answer or at least clarify your inference that:

"Increasing competition = anti-capitalism"

Specifically, why do you apparently agree with BNSF honcho Matt Rose that the entry of DM&E into the PRB (aka the "increasing competition" parse) is bad for the railroad industry (aka the "anti-capitalist" parse)?  Or do you object to that particular framing?

[Anonymous]

AG,

You and your conspiracy theories - it is not apt for this forum.

All corporations have sensitive internal information that is not germaine to public scrutiny.

Ahhh FM, so glad it is not you that holds the gavel at this forum.

Caution before the fact is not exactly conspiracy theory my friend.

Rest assured that if any of the majors. were asking to borrow so heavily (in terms of the ratio of  proceeds to net worth) and demanding secrecy, I'd be equally curious.

I see now.

Any railroad is welcome to borrow (or take outright) from the feds and keep all the corporate secrets in the dark, as long as the amount of the loan (or grant) is only a *small* percentage of that company's net worth, or at least a smaller percentage than that represented by the DM&E example? 

For the sake of argument, what exactly is that dividing line?  Legally?  Morally?  Practically?

Now, why is your "means test" better than that of the FRA?

[Anonymous]

And so why should the government treat the DME any different than it did BNSF or UP when they made the same applications?

BNSF and UP are not the subject at hand.  What happened 5 years or 10 years ago on seperate matters entirely are not at issue, and even if they were,.. since when do two wrongs make a right?

the very  rationale smaks of "well gee, everybody else is doing it" and I just find it impossible  to sympathize with that mindset.  sorry.

(plus, in the case of BNSF and UP, how did the net proceeds of the  respective transactions compare to their net worth at the time?  Merely speculation I'll conceed, but my gut tells me that in the event they would have defaulted, the collateral they had riding on the line was substantially more than one auxillary rail corridor?  Am I wrong about that?)

[Anonymous]

Now there's a can of worms that is better left unopened, at least in this venue. But you are right in saying "was given credit for being a neutral party" because that was the general perception, based on the company's (previously) sterling reputation.

When it comes to complicitness, there are many shades of gray.

I doubt that AA intended from square one, to ultimately  end up compromising it's integrity to the extent it  did.  The size of  client that Enron was, and AA's hopes of keeping the client happy, probably played a role in an evolved form of complicitness.

I do think there is a valid parallel, if for no other reason than to establish that we are in an era of monumental collapses that ultimately left somone holding the bag.  Due caution does not seem at all foolish to me, in the spirit of  "an ounce of prevention"

[solzrules]

I don't borrow money from the "public", and if I did I am sure every tidbit of the proceedings would be both part of the public record as well as "discoverable" by any entity having an acute interest.

It is US taxpayer money being put on the line here.

And so why should the government treat the DME any different than it did BNSF or UP when they made the same applications?  It is also interesting to note that in the 30 year history of the FRA loan process that the DME is using not one dime of taxpayer dollars has been lost.  There is no bank in the US that can claim that kind of a record.  Banks make bad loans all the time, in part because they fail to research the applicants. 

But, why not a compromise solution?  why not an independant review committee, that way all the   irrelevant  skeletons in DM&E's closet can be kept confidential, with just relevant information pertaining to the ability to repay the loan made public?

The STB's decisions for the last 8 years ispublic domain.  It is kinda boring to read, but they cover all the bases - fiscal solvency, construction plans, operating plans, traffic projections, proposed rail connections, enviromental inpact statements, DME's ability to pay back the loans, etc.  What 'skeletons' do you think the rr is trying to hide?  And how would an independent review committee be any different than the current FRA board looking at the loan application? 

Might be interesting to see which politico's DM&E has made campaign contributions to,  over tha past 5 years. Is there any reason why you think THAT  information should be suppressed as well?

Sure I think that information should be confidential, but for idealogical reasons-not because of trains.  Anyone that wishes to donate money to a political cause should have the right to do that, without fear of being 'outed'.  I consider that a freedom of speech issue - I support who I want with my money, and that is no one else's business. 

Not only that, if you are going to demand that the DME release campaign contribution info you better be fair and request that the Mayo clinic do the same thing.  And you might as well go hole hog and demand that the city 'O Rochester and Olmsted County release the costs they are incurring fighting a rail line that has been in existence for over a hundred years.  Some of their taxpayers may have an opinion or two in that arena. 

[solzrules]

Oh, okay, foreign company.......

I am sure that the STB would know about that through this entire loan approval process.....DME has to apply to the STB to form a rail company that would build the line, and I would assume that the company applying to the STB for permission to do that would have to reveal itself.

One thing that certainly would make for an interesting discussion - if this project is completed and a proven success how many class 1's would be knocking on the door to buy DME?  Would the STB approve it?  It would be ironic given that in the 80's CNW was trying to pull up the tracks.  My how times have changed! 

[Murphy Siding]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

As for the topic at hand, the coal cars should be owned by the utilities, as they are elsewhere, and the locomotives by leasing companies. Neither should account for the mystery $4 billion. Trackwork only amounts to one third of the project ? Perhaps DME is planning on buying KCS or CP to reach more power plants.

     Well......I am trying to keep the thread sort of on track. 

     In one of the many links I read up on, there are references to some foreign ownership intersest in DM&E, that "supposedly" is being kept hush-hush. ( I note that the reference calls them "unsubstantiated".)  I thought to myself what a hoot it would be, if the Chinese were the foreign investors!

Whoah!  Foreign as in another country or foreign as in another company? 

      I took the comment to mean a foreign company.  It appeared just to be someone trying to plant some ugly seeds, as it was on an Anti-DM&E website.  Something tells me the STB would have a real problem with another railroad "owning" DM&E.

[solzrules]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

As for the topic at hand, the coal cars should be owned by the utilities, as they are elsewhere, and the locomotives by leasing companies. Neither should account for the mystery $4 billion. Trackwork only amounts to one third of the project ? Perhaps DME is planning on buying KCS or CP to reach more power plants.

     Well......I am trying to keep the thread sort of on track. 

     In one of the many links I read up on, there are references to some foreign ownership intersest in DM&E, that "supposedly" is being kept hush-hush. ( I note that the reference calls them "unsubstantiated".)  I thought to myself what a hoot it would be, if the Chinese were the foreign investors!

Whoah!  Foreign as in another country or foreign as in another company? 

[Murphy Siding]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

As for the topic at hand, the coal cars should be owned by the utilities, as they are elsewhere, and the locomotives by leasing companies. Neither should account for the mystery $4 billion. Trackwork only amounts to one third of the project ? Perhaps DME is planning on buying KCS or CP to reach more power plants.

     Well......I am trying to keep the thread sort of on track. 

     In one of the many links I read up on, there are references to some foreign ownership intersest in DM&E, that "supposedly" is being kept hush-hush. ( I note that the reference calls them "unsubstantiated".)  I thought to myself what a hoot it would be, if the Chinese were the foreign investors!

[Poppa_Zit]

Arthur Anderson was given credit for being a neutral party until the muck around Enron got so deep that it pulled AA into the undertow.

Now there's a can of worms that is better left unopened, at least in this venue. But you are right in saying "was given credit for being a neutral party" because that was the general perception, based on the company's (previously) sterling reputation.

But while Ken Lay and Jeff Skilling got most of the headlines, Arthur Andersen & Co. was not without accountability (pun intended). 

[nanaimo73]

Hi Murph,

I really want to straighten our favorite spud out on capitalism, could you let us know when we can wreck your thread ?

As for the topic at hand, the coal cars should be owned by the utilities, as they are elsewhere, and the locomotives by leasing companies. Neither should account for the mystery $4 billion. Trackwork only amounts to one third of the project ? Perhaps DME is planning on buying KCS or CP to reach more power plants.

[Murphy Siding]

AG,

You and your conspiracy theories - it is not apt for this forum.

Now if that is not the pot calling the kettle black, I do not know what is.

 

Bert

     Hi Bert!  We're trying to have a discussion about this, without turning this thread into one of the other 400 or so other flame-a-thon threads.  If that's not an option, can you do us a favor, please, and skip over this thread?  Thanks.