Coca-Cola (KO +0.1%) authorizes a new 500M share repurchase program, set to begin when its current plan is completed. The company says its guidance for $2.5B-$3.0B in buybacks for this year remains intact. [View news story]
500M share buyback sounds so much smaller than $19 billion buyback. I just wish they could do this at a P/E of 10 instead of near 20.
The Affordable Care Act actually discourages small businesses from growing, says TheStreet.com's Robert Weinstein. Buried within 2,700 pages of the Act is a requirement that businesses provide all employees with "acceptable" health insurance coverage, but exempts businesses with 49 or fewer full time employees. For small business owners, this is a glaring disincentive not to grow beyond 49 employees as a result of the costs and additional regulations companies face with 50 or more. [View news story]
Find the companies that cater to businesses just under 49 employees in size (PAYX comes to find).
"When I see Goldman Sachs (GS) pull back risk that much that quickly, I get a little anxious about what could be around the corner," says Nomura's Glenn Schorr. Goldman's "value at risk" (VAR) fell to its lowest level since before the financial crisis, it reported yesterday - this despite Q1's rally in risk assets. [View news story]
VAR is an estimate of how much a portfolio would lose in a worst case scenario.
Investors may be getting nervous about Progress Energy's (PGN -0.4%) ability to complete its merger with Duke Energy (DUK +0.6%), announced in Jan. 2011. PGN stock now trades at a 4.15% discount to the price implied by the deal terms, and ISI Group speculates regulatory conditions might derail the deal, placing the odds as high as 50% while estimating the market has priced in 20%. [View news story]
There was almost no premium when the deal was announced in January 2011, so I wouldn't imagine too much of a hit to PGN in the event of termination of the deal. Utilities performed well since the merger was announced, and I doubt PGN would have fared much differently than the industry over that period.
Coca-Cola Or AT&T? Dividend Yield Vs. Dividend Growth [View article]
AT&T's earnings of $0.66 includes a gigantic charge taken in Q4 2011 for the failed T-Mobile acquisition. Back that out and AT&T's dividend is sustainable for now. Long term I still like KO.
How Stock Certificates Can Make You A Better Investor [View article]
One way around most fees is to request a "DRS Transfer" of your shares to the transfer agent. This kind of transfer is usually not charged a fee. Once at the transfer agent, you will receive a statement showing your ownership. With this statement, you can then call the transfer agent and request a stock certificate be mailed to you. Most transfer agents do not charge a fee to issue certificates.
EU Competition Commissioner Joaquin Almunia is preparing a formal complaint against Visa Europe (V) over its credit card fees. Visa Europe, which runs the biggest card network in the EU, agreed to cut debit card fees in December 2010 to settle an investigation into that section of its operations. [View news story]
Visa Europe is separate from Visa that trades in the US. There is an option owned by Visa on Visa Europe, but that is it.
Though DisplaySearch forecasts a major growth slowdown in 2012 for "cover glass" products such as Corning's (GLW) Gorilla Glass, DigiTimes' sources see new touchscreen applications such as advertising windows and vending machines giving demand a lift. It's added that LCD panel makers are already upgrading their plants to support such applications. [View news story]
Digitimes is saying demand for this high margin kind of glass will slow down. New uses for this glass are finally appearing, but it will take time for this new demand to come online.
Nigam Arora suggests today's central bank action was brought on by the near-failure of a large European bank overnight. EU banks, particularly the French ones, rely heavily on wholesale funding markets, and he believes a big one ran into trouble, and "the cavalry was called in." [View news story]
Overnight funding needs are generally highest at the end of reporting periods. This was for the end of November. I wouldn't expect to see much else until we get to the end of December.
The Congressional panel looking into MF Global's (MFGLQ.PK) collapse plans to study whether Jon Corzine's "star power" clouded the judgement of the ratings agencies, which only downgraded the firm just before or just after its collapse, the WSJ reports. Given MF's EU exposure, the alarm should have been raised sooner, an analyst says. [View news story]
Many businesses of this type rely on a good deal of VERY short term funding that must be constantly rolled over. The ratings agencies were looking at whether this funding would be available in the days ahead, and the timing of the disappearance of funding would be very hard to see until it was upon them. The moment that tipped Bear Stearns over a few years ago was the disappearance of this funding amid broader concerns. I hope that brokerages in the future give up a few bps in financing costs for more stable (longer dated or higher equity) sources of funding.
The Bundesbank sells 150K ounces of gold in October, lowering its stash to 109.19M ounces. "There is no reason to start speculating about the future of German gold reserves," says a Buba spokesman, as the sale was to the Ministry of Finance for the purpose of minting commemorative coins. Whatever the reason, the bank now holds less metal, more paper. [View news story]
Keep in mind that 150k ounces is only 0.13% of 109.19M ounces. Compare this to the gold ETF GLD which has an expense ratio roughly three times that amount (and Germany received cash for the gold that left too!).
Egan Jones says Jefferies (JEF) needs to raise $1B in equity (market cap is just $2B) and unload $5B in assets if it wants to avoid getting downgraded to junk territory. The 90% debt/capital ratio is more along the lines of Goldman Sachs (GS) and Morgan Stanley (MS). The difference is Jefferies does not have implicit government backing. [View news story]
Yields on JEF debt have improved (fallen) in the last day or so.
Though 30 years ago Ted Benna took advantage of an IRS loophole to develop a retirement-planning phenom that become known as a 401K plan, today he would like to scrap the system altogether. He says the plans offer too many investing options and too many opportunities for investors to makes a mistake as they follow the herd mentality. The godfather of IRAs on his creation: "Blowing up the existing structures is the only way we can simplify them." [View news story]
One potential solution: Allow 401(k) contributions to go to a very simplified 401(k) retirement account with very few options or have the option of going directly to a participant's personal IRA. Allow the plan rules to be changed so that matching contributions can flow to either account. The "pain in the butt" participants mentioned in the article will be pleased with the increased choices available in their personal accounts, and those that want a simple, handheld solution would get what they want.
It's an interesting question...who owns the Fed? And who better to answer it and try to dispel rumors than the Fed itself: "Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year." [View news story]
There exists the ability of the Fed to issue stock to non-members, but only if there is not enough money provided by members to ge the Fed to a specific capital level (this power was never used - the Fed's initial funding more than covered this level).
The Fed's capital structure includes another oddity - member banks get one vote each. A concentration of share ownership such as what takes place in a merger of two member banks does not increase the combined entity's voting power any more than it increases that of the other banks.
Coca-Cola (KO +0.1%) authorizes a new 500M share repurchase program, set to begin when its current plan is completed. The company says its guidance for $2.5B-$3.0B in buybacks for this year remains intact. [View news story]
The Affordable Care Act actually discourages small businesses from growing, says TheStreet.com's Robert Weinstein. Buried within 2,700 pages of the Act is a requirement that businesses provide all employees with "acceptable" health insurance coverage, but exempts businesses with 49 or fewer full time employees. For small business owners, this is a glaring disincentive not to grow beyond 49 employees as a result of the costs and additional regulations companies face with 50 or more. [View news story]
"When I see Goldman Sachs (GS) pull back risk that much that quickly, I get a little anxious about what could be around the corner," says Nomura's Glenn Schorr. Goldman's "value at risk" (VAR) fell to its lowest level since before the financial crisis, it reported yesterday - this despite Q1's rally in risk assets. [View news story]
Investors may be getting nervous about Progress Energy's (PGN -0.4%) ability to complete its merger with Duke Energy (DUK +0.6%), announced in Jan. 2011. PGN stock now trades at a 4.15% discount to the price implied by the deal terms, and ISI Group speculates regulatory conditions might derail the deal, placing the odds as high as 50% while estimating the market has priced in 20%. [View news story]
Coca-Cola Or AT&T? Dividend Yield Vs. Dividend Growth [View article]
Predicting The Future Of The Oracle Of Omaha [View article]
How Stock Certificates Can Make You A Better Investor [View article]
EU Competition Commissioner Joaquin Almunia is preparing a formal complaint against Visa Europe (V) over its credit card fees. Visa Europe, which runs the biggest card network in the EU, agreed to cut debit card fees in December 2010 to settle an investigation into that section of its operations. [View news story]
Though DisplaySearch forecasts a major growth slowdown in 2012 for "cover glass" products such as Corning's (GLW) Gorilla Glass, DigiTimes' sources see new touchscreen applications such as advertising windows and vending machines giving demand a lift. It's added that LCD panel makers are already upgrading their plants to support such applications. [View news story]
Nigam Arora suggests today's central bank action was brought on by the near-failure of a large European bank overnight. EU banks, particularly the French ones, rely heavily on wholesale funding markets, and he believes a big one ran into trouble, and "the cavalry was called in." [View news story]
The Congressional panel looking into MF Global's (MFGLQ.PK) collapse plans to study whether Jon Corzine's "star power" clouded the judgement of the ratings agencies, which only downgraded the firm just before or just after its collapse, the WSJ reports. Given MF's EU exposure, the alarm should have been raised sooner, an analyst says. [View news story]
The Bundesbank sells 150K ounces of gold in October, lowering its stash to 109.19M ounces. "There is no reason to start speculating about the future of German gold reserves," says a Buba spokesman, as the sale was to the Ministry of Finance for the purpose of minting commemorative coins. Whatever the reason, the bank now holds less metal, more paper. [View news story]
Egan Jones says Jefferies (JEF) needs to raise $1B in equity (market cap is just $2B) and unload $5B in assets if it wants to avoid getting downgraded to junk territory. The 90% debt/capital ratio is more along the lines of Goldman Sachs (GS) and Morgan Stanley (MS). The difference is Jefferies does not have implicit government backing. [View news story]
Though 30 years ago Ted Benna took advantage of an IRS loophole to develop a retirement-planning phenom that become known as a 401K plan, today he would like to scrap the system altogether. He says the plans offer too many investing options and too many opportunities for investors to makes a mistake as they follow the herd mentality. The godfather of IRAs on his creation: "Blowing up the existing structures is the only way we can simplify them." [View news story]
It's an interesting question...who owns the Fed? And who better to answer it and try to dispel rumors than the Fed itself: "Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year." [View news story]
The Fed's capital structure includes another oddity - member banks get one vote each. A concentration of share ownership such as what takes place in a merger of two member banks does not increase the combined entity's voting power any more than it increases that of the other banks.