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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (220637)	2/24/2007 4:05:52 AM
From: kumar	Read Replies (3) \| Respond to of 281500

Compare VZ with HPQ - Hewlett-Packard. until recently ( probably 2002 timeframe), every acquisition HPQ made was with cash - no stock swaps. Thats an indication of a company that generates enuff money without worry of debt. IMO, it would be ideal if the US govt accomplished the same result. The chinese own most of our T-Bonds. Yet VP Cheney takes a shot at them when visiting Australia... bad move IMO.

To: Elroy who wrote (220637)	2/24/2007 9:19:50 AM
From: bentway	Read Replies (1) \| Respond to of 281500

"In the meantime, VZ has tremendous positive cash flows which is used to pay dividends, expand operations and service debt. " As with ANY pyramid scheme, it assumes that this will be the situation forever. Which it won't. More responsible companies keep a positive balance sheet.

To: Elroy who wrote (220637)	2/24/2007 11:33:06 AM
From: Katelew	Respond to of 281500

What's the difference between that and what every large telephone company does? Verizon has about $5 billion in cash and $35 billlion in debt. It repays the debt when it comes due, and then issues more debt. All $35 billion doesn't come due at the same time, so its an ongoing process. In the meantime, VZ has tremendous positive cash flows which is used to pay dividends, expand operations and service debt. Same with the US government but the cash flows come from taxes rather than service revenues. The US govt. doesn't have positive cash flows, so the analogy breaks down right here.