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  • A below par reading on personal spending for April was affected by lower gas prices and home heating bills and isn't a biting indictment on retail spending (AEO, ANF, ARO, BBBY, BBY, BJ, CHS, COH, COST, DG, DLTR, GPS, HD, JCP, JWN, KSS, LOW, LTD, M, NDN, NKE, ODP, PIR, PLCE, RSH, SKS, SPLS, TGT, TJX, URBN, WMT, WSM, ZLC), according to economists. Auto sales also cooled off just a bit in April which had an impact. So far, retail trends have been largely favorable in May as the height of the spring selling season shifted a few weeks later. [View news story]
    What about the declining personal income? Warmer than usual weather caused some people to skip work? Is that it?
    May 31, 2013. 08:51 AM | Likes Like |Link to Comment
  • Annaly Capital - The Slippery Slope Begins [View article]
    "The recent pullback in shares of mREITs have caused prices to gravitate closer to their book value than before. Nevertheless, due to the future decrease in earnings, I expect retained earnings to decrease and with them -the book value."

    Assuming future decrease in earnings doesn't put their earnings into negative territory , how does the book value decrease? wouldn't the retained earnings simply accumulate at a lower rate?

    Paired with Robin's comment, this makes two wacky statements.
    Oct 15, 2012. 09:37 AM | 10 Likes Like |Link to Comment
  • Richard Barley has a kind word for bonds (currently in the midst of a savage sell-off), saying the global growth outlook continues to be dismal despite the Fed and ECB. Could the curve get steeper still? Sure, but the date of any increase in short rates keeps getting pushed further into the future, which should help anchor the long end. [View news story]
    You're significantly misunderstanding the power of a printing press or you think they're actually creating physical bills.
    Hint: The Fed can buy everything outstanding if they had to, especially when they can create dollars virtually.

    The only problem, in that scenario, is that the USD will suffer quite impressively against a basket of other major currencies.
    Sep 14, 2012. 11:34 AM | 1 Like Like |Link to Comment
  • "We've probably done more strategically in 3-4 years than most corporations of our size do in 30 years," says Morgan Stanley (MS) CEO Gorman, noting the bank has 10 more executive committees overseeing risk than it did in 2009. So adding more layers of committees is a good thing? (full presentation)  [View news story]
    more layers = less information + communication velocity = increasingly poor reaction time (let alone being proactive)
    Jun 12, 2012. 01:21 PM | 1 Like Like |Link to Comment
  • Facebook Should Have Never Become A Public Company [View article]
    I do not understand this article...
    First you say "Facebook Should Have Never Become A Public Company" and then "Facebook has VCs breathing down the company's neck. The VCs of Facebook have one goal and that is to make money." How else do VCs exit a private company at the highest valuation?

    And also... "Now I am always a big fan of companies putting their products before profits because, in the long run, shareholders will be happy. This is one of the reasons that made Apple ( great. " and then "Zuckerberg also has no sense of proper acquisitions. When he shelled out a $1 billion for Instagram, a company with no revenue, I realized Facebook was going to become a poor investment. It was an even bigger issue when he didn't even consult with the board of directors on it." If Instagram is for the long-term, and not for immediate profit, isn't Zuckerberg's move relatively similar to Apple and less so of Cisco and Dell and the sorts?

    So is Zuckerberg a sucker for 1) getting some profit hungry VCs to exit, 2) cashing out high AND retaining control and 3) acquiring "Instagram" for the long-term direction of FB and not for immediate/short-term profit (as most executives would)?

    Surely, those who purchased FB stock publicly are in the red... but Facebook should never have become a public company?

    This is a shameful article.
    May 31, 2012. 04:58 PM | Likes Like |Link to Comment
  • Syriza party leader Tsipras tells the WSJ he sees little chance Europe will cut off funding to Greece as his country would then be forced to stop paying its creditors (also Europe). "If I owe the bank $1M it's my problem, if I owe it $100M, it's the bank's problem," once said a man who knew how to navigate the waters of insolvency.  [View news story]
    Germany and the Euro would be better off recapitalizing their own banks and simply cut Greece off instead of bailing them out only to receive half of it back. If a Greek radical like Syriza is willing to take the world hostage to only gain for themselves is nothing short of terrorism.
    May 17, 2012. 03:32 PM | 2 Likes Like |Link to Comment
  • The expected retirement age is now 67 up from 60 during the 1990s, and a new low of 38% expect to retire comfortably, according to Gallup. That the workforce participation rate will continue to decline (and take the UE rate with it) doesn't jibe with that poll result. Additionally, 33% expect Social Security to be a major source of income, up from 27% just before the financial crisis.  [View news story]
    I expect the worst and prepare for the worst.
    Optimism provides downside.
    Apr 30, 2012. 03:01 PM | 1 Like Like |Link to Comment
  • Starbucks (SBUX -2.2%) plans to stop using crushed cochineal bugs to color some of its drinks and food items after the practice draws the attention of consumer groups. Though the FDA-approved extract is commonly used in juices, yogurts and other products, it was Starbucks that caught the attention of vegans. [View news story]
    If it took products sold by a company the size of Starbucks to alert a group of people of a certain issue (whether it is an actual issue or not is debatable), imagine all the stuff that's not in anyone's radar but is happening...
    Apr 19, 2012. 01:36 PM | 1 Like Like |Link to Comment
  • Deutsche Bank (DB -1.4%) is preparing a capital raise of up to €3B this summer, according to sources. The move is aimed at stemming criticism of its high leverage ratio (towering over that of U.S. banking giants), and prepping for introduction of Basel III rules.  [View news story]
    A whole €3?
    Apr 19, 2012. 11:15 AM | Likes Like |Link to Comment
  • The nominal price of natural gas dipped below $2 to the lowest price in 10 years, but adjusted for inflation, the price has fallen below its 1994 level. It might be the lowest price ever, suggests Mark Perry, but the EIA's price series only goes back to 1994.  [View news story]
    We will continue to completely ignore viable alternative energy resources which are both cheaper and cleaner than oil/coal and expel tax dollars to satisfy the social and political infatuation with "renewable resources". Let us ignore the concept of transitionary energy resources while we improve our technologies to make renewable resources a vaiable cost/benefit tradeoff in the future. We MUST invest in expensive, exponentially improving, quickly obsolete renewable energy technologies to build solar farms today so that they may be able to last 20 years to produce electricity at 10-20x the cost of today's going rate!!!
    Apr 11, 2012. 04:55 PM | 2 Likes Like |Link to Comment
  • "My Gnome is hearing that all bidders have walked from RIMM," tweets Doug Kass, and in doing so contributes to today's selloff in Research In Motion (RIMM -7.6%). Gene Munster did his part courtesy of a CNBC appearance (video).  [View news story]
    Walked? Probably has a lot to do with RIM's change in position from "we will not sell, we are great" to "... we are willing to sell, now". Too little, too late. Now everyone is probably thinking... "If you're willing to sell now, why should we buy you? We can wait, you probably can't"

    And so it begins (or ends)...
    Apr 3, 2012. 01:36 PM | 1 Like Like |Link to Comment
  • As the saying goes, "when it rains it pours." For Goldman Sachs lately, it's been nothing short of a deluge. First it was the Greg Smith "tell-all" op-ed in the New York Times, now its a report in the Sunday edition that a private equity fund controlled by Goldman was holding a 16% stake in a web site called - purported to be one of the largest sex trafficking sites in the United States.  [View news story]
    Most people would. That's an issue with today's society, not just GS.
    Apr 2, 2012. 10:14 PM | 2 Likes Like |Link to Comment
  • Google (GOOG) plans to roll out a branded tablet later this year to be priced at $150, NY Post reports, undercutting the $199 price of Amazon's Kindle Fire. “It will cost more to build than it will sell for, which means Google will pay a heavy subsidy for its tablet,” an ITG analyst says. “There is no choice but to do that, if Google wants to compete.” GOOG +0.6% premarket. (previously)  [View news story]
    Google's strategy to sell hardware below cost is akin to the game console market. If this strategy works, imagine the impact on smartphones... let alone Apple's margins.
    Mar 29, 2012. 06:27 PM | 1 Like Like |Link to Comment
  • Research In Motion says on its earnings call (webcast) it expects FQ1 revenue to decline from FQ4's $4.19B; the consensus is for $4.26B. RIM also expects its gross margin to face ongoing pressure, and FY13 subscriber growth to fall from FY12's level. It also wants to achieve over $1B in annual cost savings through a restructuring program, and plans to abandon most consumer markets. RIMM now down 2.3% AH. (more)  [View news story]
    Phone sales should be used as nothing more than a cash cow at this point (R&D expenses as sunk cost). Their remaining value is in patents and network infrastructure. They need to sell themselves to someone who can leverage their remaining competitive advantage in secure mobile networking. There are many suitors, but only one of them has the chance to make it work -- Microsoft. They are trying desperately to make inroad into the growing smartphone market share where they once held a sizable share. Acquiring a competitive advantage in business mobile solutions and RIM's subscriber base can provide a significant leg-up for Microsoft. Instead of combining everything into one windows phone, they could use this opportunity to keep their current line of windows phones separate and introduce a "business oriented" line of windows phones incorporating key RIM security features as well as that fantastic keyboard (or not) so as not to make the same mistake as RIM and attempt to capture the consumer market with a business-oriented phone.
    Mar 29, 2012. 06:21 PM | 3 Likes Like |Link to Comment
  • Research In Motion's Stock Price Provides A Margin Of Safety And Upside [View article]
    What? Wouldn't selling puts on a non-volatile stock carry even greater "prohibitive downside risk"? After all, the implied vol in the put option is "implying" higher risk -- therefore, priced in.

    Take for example... two cars. One European, other Japanese. Both 4 years old with the same MSRP when new. The Japanese car sells for 60% of new while the European car sells for 40%. There is a relative discount for the European car due to it's perceived unreliableness. Another way to put it is, there is a relative premium for the Japanese car due to it's perceived reliableness. Here's the kicker... which one most likely has better upside? You decide.
    Mar 26, 2012. 11:57 AM | Likes Like |Link to Comment