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Brandon Matthews (pseudonym) is the founder of, which was borne of his desire to help retail investors after witnessing the continually changing ways that Wall Street can cheat them. Brandon has worked for Monroe Parker Investment Bankers, Morgan Stanley Dean Witter, American... More
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  • Political Wrangling Will Kill The Markets & Economy
    Osama Bin Laden is probably laughing hysterically at the moment. You can forget about any terror threats right now from abroad, because our own government seems content to do the work of Al Quaida for them. The uncertainty and fear being created by the potential expiration of the Bush tax cuts, is leading towards economic disaster.

    According to recent reports, if no action is taken by January 1, 2011, taxes will rise for ALL Americans. One report I read suggested an increase of $2600.00 a year per individual. Throw in a wage freeze for the single largest working segment, and you will get lower homes sales, lower new car sales, and a trickle down effect that will make the recent recession look like a bull market.

    It’s much more complicated than that. In 2010, the investment opportunity so widely recommended was dividend paying stocks. American business answered by raising dividends to attract investors. The government’s response through inaction or intent, is to raise the taxes on dividends as ordinary income from 0% to 15%, to as much as 39.6%. This should create a very nice sell off in December of some of the largest corporate equities, as the income derived by investors makes the investment vehicle much less attractive.

    Right now, the maximum federal rate on garden-variety long-term capital gains and qualified dividends is 15 percent. Starting next year, the maximum long-term capital gains rate will increase to 20 % (or 18 % on gains from assets held for over five years). Dividends will once again be taxed at ordinary income rates. So, the maximum rate on dividends will balloon to a whopping 39.6 %.

    Long Term Capital gains are scheduled for an increase in 2011, as well. Recently, it was reported that Apollo Group had filed a 144 filing with the SEC, to sell its long term stake in Sirius XM Radio. These sales are not guaranteed, but the long term capital gains increase will cost Apollo as much as $5 million or more in extra taxes if they do nothing now. Sirius XM Radio is fortunate, because its institutional owners for the most part are new, and few institutional holders have long term gains to consider. Other equities however, don’t enjoy such a luxury. Multiply this one filing by a hundred thousand or more, and the economic effects will devastating.

    It’s going to muck up economic decisions” and cause widespread selling of stocks as investors seek lower capital- gains tax rates before year-end, said Mark Bloomfield, president of the American Council for Capital Formation, a Washington group that advocates for lower taxes on investments. Consumers and investors “will be frozen because they don’t know what the government’s going to do.”

    The long term holders of the majority of U.S. equities, will be forced to cash in their gains in December to avoid hundreds of billions of dollars in 2011 tax increases  from stealing their profits. All the FED money it can print, will not be able to stop the largest selloff the markets have ever seen. Consumer confidence will fall, and jobs will be lost.

    That is the risk our government is toying with, over such issues as taxing the rich and extending unemployment benefits for the people they are supposed to serve. The fear and uncertainty alone is plaguing the markets and the economy, and not just here in the U.S. but on a global scale. It’s no longer a situation of stealing from the rich to give to the poor. It’s stealing from all to give to China, because frankly, the U.S. is broke.

    Disclosure: Long SIRI

    Disclosure: Llong SIRI
    Nov 30 11:20 AM | Link | 5 Comments
  • Verizon Wireless Blames Terminally Ill Customer For False Charges: Refuses To Cancel

    I called Verizon on behalf of my terminally ill aunt today, after speaking with their customer service this past weekend and being told to call back during the week, to speak with the company's fraud department. The rep I spoke with explained that it appeared the phone had been cloned, as there were multiple calls received that originated from Toronto, Canada.

    The result of these calls was an astronomical bill that approached $800.00. A google search of the number ties it to some sort of embezzlement scheme originating out of Toronto. The fraud specialist at verizon explained to me that because they show that these calls were received by the phone, it is not their problem.

    He explained that I would have to seek third party assistance, such as retaining the services of a lawyer to dispute the charges, or contacting the Better Business Bureau.

    When I suggested instead that we will just pay the bill and cancel the line, and take our business elsewhere, the fraud specialist said he would gladly transfer the call to the appropriate department, yet then went on to explain how it is the responsibility of customers including this terminally ill patient, to monitor usage to avoid these issues.

    I asked how monitoring these issues would help in light of the fact that Verizon could simply charge a customer for calls that were never sent or received and his only suggested option was to seek remedy elsewhere. He stated that it wasnt really an issue, as only 300 minutes were billed, yet the statement indicates 1200 minutes worth of charges.
    Again, I asked him to cancel the line. He proceeded to deflect responsibility again to the phone user, insisting that usage should be monitored by individual customers. At that point, I got angry and a little tired of this gentlemen telling me that getting upset was not going to help. I again asked to be transferred to the cancellation department. Again, he began talking in a deflective manner.
    I then told him in no uncertain terms to stop talking (explative!) and transfer me. At this point he refused, and stated " that's not going to happen."

    If this is indicative of Verizon's policies, the option for the company stock as far as I'm concerned is to sell it. As more and more customers learn of these issues, cancellations will spike. I will be putting my Droid-X for sale on E-bay this afternoon, and visiting a T-Mobile dealer.

    So all this based on a single experience? Hardly. Google searches reveal a very troublesome trend. In fact, there are 236,000 results for "verizon s^&ks" and 279,000 for "hate verizon," most of which seem centered on customer service experiences.

    No positions, although I'm seriously considering shorting VZ right now.


    Disclosure: No Positions
    Tags: VZ
    Nov 23 12:21 PM | Link | Comment!
  • British Invasion 2.0
    I don’t put much stock in coincidences. When someone tries to explain an event to me as a coincidence, experience has taught me that the person is most likely being deceptive; basically challenging me to prove they are lying, knowing that I probably will not succeed.

    So is it just a coincidence that on the very day that Apple (NASDAQ: AAPL) announces the availability of The Beatle’s music collection on iTunes, that Sirius XM Radio (NASDAQ: SIRI) announces an exclusive Paul McCartney concert to air on six seperate channels? This while launching a 24/7 month-long ”commercial-free music channel devoted to McCartney’s legendary and expansive music catalog, including music from his solo records, tracks from every Wings album as well as the iconic songs he recorded with The Beatles.” I highly doubt it. In fact, this British Invasion 2.0 may just give a glimpse into SatRad 2.0, and just may force Apple or Google (NASDAQ: GOOG) into making a future bid for Sirius XM.

    ♪ You say you want a revolution?♪ 

    The ability for Sirius XM Radio to put together a full-time channel so quickly, that capitalizes on the Apple-Apple deal, is a revolution unto itself. With the Apple Corps statement that over 600 million copies of their albums have been sold to date, this exclusive channel and concert are sure to boost Sirius XM’s subscriber roles substantially, as the Beatle’s music is being revived. The new Beatles offerings are soaring into the top spots at iTunes. The most interesting and overlooked aspect I believe, is the exclusive concert itself. The announcement of the concert makes it clear that this was a pre-planned media event.

    There was at least one person, who knew about both the Apple and Sirius XM deals, and that is Paul McCartney himself, along with Ringo, Yoko and the rest of that inner circle of course. Immediately, the question must be asked whether this Sirius XM, exclusive live concert performance, will be made available on iTunes at a later date. I believe it goes without saying, as McCartney & Co. would have insisted on it. That of course would mean, that at some point, Sirius XM and Apple would have sat down to discuss the terms already. We have now put Apple and Sirius XM in the same room, and will have to wait and see if any revenue sharing agreements were made.

    Two months ago, I reported that Sirius XM’s sharp price rise could be related to Google’s intent to take on Apple’s iTunes. At the time I wrote:

    “I believe it’s conceivable, that Sirius XM was making this announcement to either Apple, Google or both in an attempt to capitalize on the newest war between the two tech giants.”

    ♪ People say I’m crazy… ♪ 

    I was referring to the announcement of Sirius XM’s SatRad 2.0. I also wrote that certain patents indicated that Satrad 2.0 could make available live concert broadcasts, on a pay per view type basis. Are these concerts to be lost forever once aired? Not likely at all. Sirius XM already makes the XM Skydock, which turns any iPhone or iPod into a Satellite Radio. Given this, it is certainly not much of a stretch for Sirius XM and Apple to colaberate on of California based institutional investors (incliexclusive music offerings.

    Fortunately for Sirius XM investors, Google might not be all that pleased about this, leaving it in the precarious position of having to make a play for Sirius XM, which of course could and most likely would, be challenged by Apple.

    Of course, this, along with a higher than normal number of California based institutional investors (including one betting nearly $100 million on Sirius XM all of a sudden), could simply be just a coincidence

    Disclosure: Long SIRI

    Tags: SIRI, GOOG, AAPL
    Nov 18 6:39 PM | Link | Comment!
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