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  • Apple Will Collect Fees On Apple Payments, Back Of The Napkin: Could Add Billions To Bottom Line [View article]
    Sep 10 09:08 PM | 2 Likes Like |Link to Comment
  • Apple Will Collect Fees On Apple Payments, Back Of The Napkin: Could Add Billions To Bottom Line [View article]
    The costs come from hooking up to the banking system through Visa and MasterCard. It is Visa and MasterCard that provide the underlying infrastructure that allows Apple to provide a wireless payment feature. All Apple is doing is helping IPhone users to connect to the Visa or MasterCard network. It is Visa or MasterCard that actually collect the money from the IPhone user's bank account and hand it over to the retailer. They do not do this for free. Apple's margin is probably closer to 10%.
    Sep 10 09:07 PM | Likes Like |Link to Comment
  • Apple Will Collect Fees On Apple Payments, Back Of The Napkin: Could Add Billions To Bottom Line [View article]
    Don't confuse gross revenue with net revenue. If we allow that Apple might gain access to $12 billion in revenue that is gross revenue charged by the users. Their revenue would be perhaps 1% of this number.

    If you really think transaction revenue is where its at then buy Visa or MasterCard. They own both the credit and debit card market. Every time you pay with a credit or debit card regardless of whether you swipe, click or whatever you are putting money in Visa's and MasterCard's pockets. It doesn't get any better than this. They have owned the payments market for nearly 40 years and it is extremely unlikely that anyone is going to knock them out of the box any time soon. Apple's payment service is really about helping to sell more phones.
    Sep 10 09:03 PM | 3 Likes Like |Link to Comment
  • Apple Will Collect Fees On Apple Payments, Back Of The Napkin: Could Add Billions To Bottom Line [View article]
    Very good analysis of the pay situation. It is pure horse flop that Apple's earnings would be materially impacted by their new pay launch. If anyone wants to play the wireless pay market they are still best advised to buy Visa or MasterCard. Between the two of them they pretty much own the credit card (be it wireless, swipe, NFC etc...) market. Neither would ever do a deal that "gave away" significant value to the likes of Apple or even Paypal. Paypal itself is much better positioned than Apple will ever be but most of Paypal's business is still basically credit card in nature and they hand over a significant chunk of their revenue to Visa and MasterCard.

    Like you say. Be bullish or bearish as you like but don't make the decision on misinformation.
    Sep 10 08:54 PM | 2 Likes Like |Link to Comment
  • Baby Boomer Spending Cycle: The Top 10 [View article]
    You may be missing one trend and that is the luxury vehicle market. Boomers drove Dodge Caravans for too many years. Now they want BMW and Audis. In the car business luxury vehicles are four or five times more profitable than a dodge caravan. BMW should do well for years.
    Sep 9 11:02 AM | Likes Like |Link to Comment
  • If The Economy Is Recovering, Why Is The Labor Force Participation Rate At A 36 Year Low? [View article]
    Good points to ponder. The underlying driver of today's environment is demographics. The baby boomers form the largest component of the population and labor force. Baby boomers are now reaching retirement age. Most boomers earn fairly good salaries and as they retire they are replaced with fewer and less costly workers. The impact is a net reduction in employment income for the economy as a whole. For the next ten years we are going to see more of this. Lower wages...lower consumption...lower growth in the economy. Japan has been living this "dream" for nearly two decades. What we see in Japan is what we will get in the U.S..

    The only thing to be done is to focus on the positives that might come from an aging demographic. For example, house prices should eventually decline. The wages of manual labor should increase as boomers aging bodies force them to hire people to cut their lawns, paint their houses or clean their homes. These will remain jobs with low skilled but at some point the boomers will be forced to pay $25 an hour to a cleaning lady because they just can't find one at $10 and hour. Opportunities for advancement should also improve as the boomers disappear and create openings for younger workers. Also with luck the U.S. will become a safer and cleaner place to live. Old people don't hold up liquor stores and they worry about clean water and sustainable development.

    If however everyone focuses on the old model of 4% GDP growth then there will be plenty of disappointment. One percent growth will be the new 4% growth.
    Sep 8 09:35 PM | Likes Like |Link to Comment
  • Don't Give Up On Target Yet [View article]
    Agreed. Target has blown its brains out with the Canadian acquisition of Zellers. Walmart Canada has crushed Target in Canada to the point that Target's next move will be to close the Canadian operations. The sooner they do so the less money Target will lose. They did no due diligence when they bought Zellers. Zellers was really a souped up dollar store and was not a suitable operation for Target.
    Sep 8 08:58 AM | Likes Like |Link to Comment
  • Mexico Economy To Move With Energy Reforms (Part 1) [View article]
    Good work. The only fly in the ointment is that Mexico has a long history of snatching defeat from the jaws of victory. Mexico, Argentina and India have been markets of hope for a very long time.
    Sep 5 09:48 AM | Likes Like |Link to Comment
  • Overlay Of Effective Demand Rule Upon Taylor And Rudebusch Rules [View article]
    Well done. It would seem that the Fed will keep rates well below the normalized rate until it feels that it has compensated for the fact that it could not cut rates below zero in the 2009 era.
    Sep 5 09:44 AM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    Quite so. Food stamps were intended to help the poor make ends meet when times were particularly tough. At some level this allows the poor to stay poor. Before food stamps people suffered but they learned that being poor is something to be avoided at all costs. The poor worked endlessly to make ends meet. The benefit was that their children learned to become better than their parents. The children became able to care for the parents. Being poor was not a life sentence.
    Sep 4 10:39 AM | 3 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    Absolutely fabulous advice. Money should only be borrowed to buy things that will outlast the debt. House...yes...grocerie...
    Sep 4 10:29 AM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    No in the least comparable. The countries mentioned (Haiti...) produce nothing. They are poor because they produce nothing. They are not poor because they save too much.
    Sep 4 10:22 AM | 5 Likes Like |Link to Comment
  • Warren Buffett Is Once Again Doing The Opposite Of The Crowd [View article]
    Buffet has no master who oversees his every move. He determines his own benchmark and he reports only annually. The great unwashed professionals who toil on behalf of an employer are measured daily which makes having a bad a very risky event at a personal level. When you are competing day to day with a thousand other drones who trying to beat the same benchmark what happens is that they all do the same thing. The punishment for being a step too slow on any given day far outweighs the benefit of being a step faster. Buffet has a different life. If his inner self feels the market is too expensive he raises cash. If he is early he couldn't care less. His clients (shareholders) cannot fire him. Sure they can sell their shares but his life is unchanged. He carries on in any event.

    The luxury of not being called to task on a daily basis gives him the ability to make well thought out choices. Buffet's real message to the world is if things look bad then just walk away. The great unwashed professionals would get fired for doing this. Their job is to add value every day even if they add no value from year to year.
    Sep 3 08:57 PM | 15 Likes Like |Link to Comment
  • Microsoft's Acquisition Of Nokia: Deal Gone Wrong? Probably Not [View article]
    Quite so. Only Apple makes serious money selling consumer devices. Why people pay up for these devices is a mystery. Nothing Apple does is really proprietary.
    Sep 3 08:39 PM | Likes Like |Link to Comment
  • Microsoft's Acquisition Of Nokia: Deal Gone Wrong? Probably Not [View article]
    Nothing goes on forever....
    Sep 3 08:37 PM | Likes Like |Link to Comment