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  • Testy Tuesday: Do We Need More Stimulus Already? [View article]
    @mobyss
    From FactCheck.org:
    The Obama Phone?
    Q: Has the Obama administration started a program to use "taxpayer money" to give free cell phones to welfare recipients?
    A: No. Low-income households have been eligible for discounted telephone service for more than a decade. But the program is funded by telecom companies, not by taxes, and the president has nothing to do with it.
    http://bit.ly/S2BfkC
    Sep 18, 2012. 12:41 PM | 2 Likes Like |Link to Comment
  • Amazon.com: No Impact From Sales Taxes? [View article]
    Short Interest Posted @Nasdaq
    http://bit.ly/S2n4fk

    "FINRA member firms are required to report their short positions as of settlement on (1) the 15th of each month, or the preceding business day if the 15th is not a business day, and (2) as of settlement on the last business day of the month.* The reports must be filed by the second business day after the reporting settlement date. FINRA compiles the short interest data and provides it for publication on the 8th business day after the reporting settlement date."
    Publication Schedule:
    http://bit.ly/Rq00Sr
    Sep 18, 2012. 11:39 AM | Likes Like |Link to Comment
  • Amazon.com: No Impact From Sales Taxes? [View article]
    Amazon getting singled out for collecting sales taxes vis-à-vis other remote online retailers, esp. for big ticket merchandise, could ironically present Amazon with a non-level playing field, something it had gleefully and aggressively defended and exploited to the hilt vs. B&M retail like Best Buy, Circuit City etc. So, until there is federal legislation forcing everyone to collect (unlikely anytime soon), there is bound to be major impact depending on how well its online competitors exploit this advantage.
    Sep 18, 2012. 12:43 AM | Likes Like |Link to Comment
  • As Amazon (AMZN) starts collecting sales taxes on California purchases, Wells Fargo claims a September survey of 1,000 Texans indicates the respondents' Amazon shopping habits have barely changed since sales taxes began to be tacked onto their orders in July. 33% of respondents to a broader survey say they would shop less if they had to pay sales taxes, but Wells points out consumers often overstate their intentions. [View news story]
    Amazon getting singled out for collecting sales taxes vs. other remote online retailers, esp. for big ticket merchandise, could ironically present Amazon with a non-level playing field, something it had gleefully and aggressively exploited to the hilt vs. B&M retail like Best Buy, Circuit City etc. So, until there is federal legislation forcing everyone to collect (unlikely anytime soon), there is bound to be impact depending on how well its online competitors exploit this advantage.
    Sep 18, 2012. 12:37 AM | 1 Like Like |Link to Comment
  • Amazon's Management Alignment With Investors: Another Reason To Own The Stock [View article]
    When you can make payroll for your talent pool paying with your own stock as currency, it is an immense edge over competition who don't have such stock award incentives with a currency sporting such lofty valuation and have to pay with cold hard cash which both hinders their capacity to attract talent and also affects the cash flow.

    But as of late since Amazon has had to buy back these shares perhaps because of difficulty distributing it to real investors beyond the cartel/pool, it will impact its cash flow.

    Here is some color on the cost to Amazon in using stock instead of cash for employee compensation and some of its acquisitions.

    Since 2007, share count has gone up by 40 million.
    And this in spite of spending $1.6 billion to buy back a little over 15 million shares.

    If one were to calculate the cost of dilution at the average price Amazon spent to buyback its shares over the past 5 years, it works out to over $4 billion.

    So, the theoretical cost of stock based compensation/acquisition has been over $5.6 billion, i.e. over $1 billion/year.

    And how much has Amazon’s TOTAL income been over those 5 years? $3.8 billion.
    Sep 18, 2012. 12:26 AM | 1 Like Like |Link to Comment
  • Amazon's Management Alignment With Investors: Another Reason To Own The Stock [View article]
    Forget about Bezos' 88 million shares. If you look at how many shares Amazon bought back to the number of shares exercised and flipped by insiders the past two years, they are almost the same number.
    Either you can say that the company is diligent about dilution or more likely the shares could not be distributed without seriously cratering its price and Amazon ended up the buyer of last resort.
    You see, the institutions haven't been adding for the past two years with their net holdings stuck at 300 million +/- 5 level and there is perhaps great difficulty distributing the shares to individual shareholders at these nosebleed levels.
    Sep 17, 2012. 04:15 PM | Likes Like |Link to Comment
  • Amazon's Management Alignment With Investors: Another Reason To Own The Stock [View article]
    A reader here on SA reported over a week ago that Bezos had Filed Form 144 on 6-Sep-12 to sell 1 million AMZN shares (of his 88 million holding) with Morgan Stanley as his broker. (http://bit.ly/U52aNs)
    Still I don't see a Form 4 indicating consummation of that sale.
    Either broker angling for a better price for placing the shares, or, more likely with the stock already making a series of all time highs, unable to find a buyer at these lofty levels?

    ISSUER: AMAZON.COM INC
    SYMBOL: AMZN
    FILER: BEZOS JEFFREY P
    TITLE: Chairman of the Board
    BROKER: MORGAN STANLEY SMITH BARNEY LLC
    RESTRICTED SHARES TO SELL: 1,000,000 DATE REGISTERED: 9/6/2012
    APPROXIMATE DATE OF SALE: 8/30/2012
    The Form 144 is filed with the Securities and Exchange Commission to reflect the intention of any holder of restricted stock to sell those shares. After the 144 is mailed to the S.E.C., the filer is permitted to sell the shares, or any fraction of them, within 90 days.
    Form 144 Data Source: The Washington Service (info@washingtonservic... or 301-913-5100)
    Sep 17, 2012. 02:29 PM | Likes Like |Link to Comment
  • There's No Longer A Bernanke Put [View article]
    In March 2009, the Financial Times published a letter to the editor concerning the then novel subject of QE. “I can now understand the term ‘quantitative easing,’ wrote Gerald B. Hill of Stourbridge, West Midlands, “but . . . realize I can no longer understand the meaning of the word ‘money.’”
    From Jim Grant's 23 March, 2012 Speech "Piece of my mind" at
    the Fed Reserve, New York
    Sep 15, 2012. 12:35 PM | Likes Like |Link to Comment
  • Herding Behavior Explains The Sky-High Prices Of Amazon And Salesforce [View article]
    In the case of AMZN, if there is herding by institutions, why don't we see growing accumulation in the aggregate? Institutional holdings have been pretty much flat for over two years at 300 million +/- 5 while the stock price has risen up from an already lofty level by another $100. The only herding I see is the number of institutions holding it has gone up from about 750 to around 900 now, indicating distribution within the institutional community. The total shares outstanding and insider ownership has been about the same, so no distribution to the individual investors happening either. Whatever dilution from stock grants has been soaked up by Amazon's buybacks.
    Sep 15, 2012. 11:39 AM | Likes Like |Link to Comment
  • Friday: QE Fever Turns To QE Forever! [View article]
    And I want to share excerpts from Jim Grant's speech at the NY Federal Reserve on 23-March-2012:
    (you can read the whole thing, and it is looong, here in one of his freebie issue at: http://bit.ly/Pjbb0S)

    If Chairman Bernanke were in the room, I would respectfully ask him why this persistent harking back to the Great Depression? It is one cyclical episode, but there are many others. I myself draw more instruction from the depression of 1920-21, a slump as ugly and steep in its way as that of 1929-33, but with the simple and interesting difference that it ended. Top to bottom, spring 1920 to summer 1921, nominal GDP fell by 23.9%, wholesale prices by 40.8% and the CPI by 8.3%. Unemployment, as it was inexactly measured, topped out at about 14% from a pre-bust low of as little as 2%. And how did the administration of Warren G. Harding meet this macroeconomic calamity? Why, it balanced the budget, the president declaring in 1921, as the economy seemed to be falling apart, “There is not a menace in the world today like that of growing public indebtedness and mounting public expenditures.” And the fledgling Fed, face to face with its first big slump, what did it do? Why, it tightened, pushing up short rates in mid-depression to as high as 8.13% from a business cycle peak of 6%. It was the one and only time in the history of this institution that money rates at the trough of a cycle were higher than rates at the peak, according to Allan Meltzer.

    But then something wonderful happened: Markets cleared, and a vibrant recovery began. There were plenty of bankruptcies and no few brickbats launched in the direction of the governor of the New York Fed, Benjamin Strong, for the deflation that cut an especially wide and devastating swath through the American farm economy. But in 1922, the first full year of recovery, the Fed’s index of industrial production leapt by 27.3%. By 1923, the unemployment rate was back to 3.2%. The 1920s began to roar.

    And do you know that the biggest nationally chartered bank to fail during this deflationary collapse was the First National Bank of Cleburne, Texas, with not quite $2.8 million of deposits? Even the forerunner to today’s Citigroup remained solvent (though for Citi, even then it was a close-run thing, on account of an oversize exposure to deflating Cuban sugar values). No TARP, no starving the savers with zero-percent interest rates, no QE, no jimmying up the stock market, no federal “stimulus” of any kind. Yet—I repeat—the depression ended. To those today who demand ever more intervention to cure what ails us, I ask: Why did the depression of 1920-21 ever end? Given the policies with which the authorities treated it, why are we still not ensnared?

    If you object to using the template of 1920-21 as a guide to 21st-century policy because, well, 1920 was a long time ago, I reply that 1929 was a long time ago, too. And if you persist in objecting because the lessons to be derived from the Harding depression are unthinkably at odds with the lessons so familiarly mined from the Hoover and Roosevelt depression, I reply that Harding’s approach worked. The price mechanism is truer and enterprise hardier than the promoters of radical 21st-century intervention seem prepared to acknowledge.

    In notable contrast to the Harding method, today’s policies seem not to be working. We legislate and regulate and intervene, but still the patient languishes. It’s a worldwide failure of the institutions of money and credit. I see in the papers that Banca Monte dei Paschi di Siena is in the toils of a debt crisis. For the first time in over 500 years, the foundation that controls this ancient Italian institution may be forced to sell shares. We’ve all heard of hundred-year floods. We seem to be in a kind of 500-year debt flood.

    Many now call for more regulation—more such institutions as the Treasury’s brand-new Office of Financial Research, for instance. In the March 8 Financial Times, the columnist Gillian Tett appealed for more resources for the over whelmed regulators. Inundated with information, she lamented, they can’t keep up with the institutions they are supposed to be safeguarding. To me, the trouble is not that the regulators are ignorant. It’s rather that the owners and managers are unaccountable.
    Sep 14, 2012. 04:00 PM | 1 Like Like |Link to Comment
  • Friday: QE Fever Turns To QE Forever! [View article]
    @XRTrader: all this QE analysis makes my eyes glaze over and frankly I am out of my depth debating its pros and cons.
    But there are opinions and analysis from experienced, sober and sensible financial experts like this one from David Merkel which make me go hmmm...
    http://bit.ly/R0g6rs
    The FOMC pulls out all of the stops. When this policy doesn’t work, what will they do?
    The FOMC commits to conditional but potentially unlimited agency residential mortgage-backed securities [MBS] purchases, continues and extends the twist program, and lengthens the period of FOMC Fed funds policy accommodation.
    In my opinion, I don’t think holding down longer-term rates on the highest-quality debt will have any impact on lower quality debts, which is where most of the economy finances itself.
    Also, the investment in Agency MBS should have limited impact because so many owners are inverted, or ineligible for financing backed by the GSEs, and implicitly the government, even with the recently announced refinancing changes.
    The key variables on Fed Policy are capacity utilization, unemployment, inflation trends, and inflation expectations. As a result, the FOMC ain’t moving rates up, absent increases in employment, or a US Dollar crisis. Labor employment is the key metric.
    GDP growth is not improving much if at all, and the unemployment rate improvement comes more from discouraged workers. Inflation has moderated, but whether it will stay that way is another question.

    A Statement to Dr. Bernanke:
    More debt will not get us out of this crisis. The Great Depression ended when enough debts were compromised, paid off, or cancelled, which from my study is 1941, before WW two started.
    Your policies further aid the growth of the budget deficit, and encourage malinvestment in housing and banking, two things in a high degree of oversupply. The investments in MBS only help solvent borrowers on the low end of housing, who don’t really need the help. Holding down longer-term rates on the highest-quality debt does not have any impact on lower quality debts, which is where most of the economy finances itself.
    The problems with unemployment are structural, not cyclical. Labor force participation rates continue to decline. There is greater labor competition around the world, forcing down wages on the low end. There is nothing that monetary policy can do to change this. You can create stagflation through your policies, but not prosperity.
    When inflation does arrive, the FOMC is going to find it very hard to raise Fed Funds or shrink its balance sheet. The banks will not react well as you try to shrink, and the long rates that you have held down will react violently.
    You haven’t thought through all of the “second order” effects of your policy. Even the “first order” effects, which favor the rich over the poor, seem to elude you. Assets rise, helping the rich. Interest rates fall, helping the rich who can borrow. Commodity prices rise, harming the poor.
    INSANITY IS DOING THE SAME THING OVER AND OVER, AND EXPECTING A DIFFERENT RESULT (caps mine).
    When will you realize that the policies of the Fed aren’t helping, and need to be abandoned?
    Sep 14, 2012. 03:41 PM | 2 Likes Like |Link to Comment
  • Amazon.com Throws Down The Gauntlet [View article]
    @mchg: I still don't see a Form 4 filed indicating Morgan Stanley has been sucessful in distributing these 1 million of Bezos' shares registered now over a week.
    Notice how in spite of the frothy share price, volume has been tepid these past couple of days. Perhaps the cartel is up to its eyeballs in the stuff and can only be counted on to merely toss it back and forth on escalating bids and the hoi polloi is wisely keeping away?
    Sep 14, 2012. 02:26 PM | Likes Like |Link to Comment
  • Bear Hunting Along The Amazon [View article]
    In other words, When the facts change, Paulo will change his mind!
    Sep 14, 2012. 02:11 PM | Likes Like |Link to Comment
  • Friday: QE Fever Turns To QE Forever! [View article]
    Does Bernanke Hate Old People?
    http://bit.ly/PqCmoV
    Bernanke Wealth Tax On savings accounts
    $160 billion transferred from savers to speculative funds & mega-banks
    Savings accounts held $1,600 billion. Assume these accounts earned 0.5% interest. That would result in $32 billion in interest income being paid to old people and other savers.
    What interest rate would be a fair rate for them to earn?.. if we look at inflation, near $4 gasoline, .. 3% per annum would certainly be fair. Should that be the case, savings account should be earning $192 billion of interest income. In short, holders of savings accounts are losing out on ~$160 billion of interest income, and that is probably a low estimate.
    Sep 14, 2012. 02:07 PM | 2 Likes Like |Link to Comment
  • Friday: QE Fever Turns To QE Forever! [View article]
    Yes, reg. AMZN I too noticed. Not writing to mock, but Phil, can you share why? Is it because you think being bearish at anything would be as futile as spitting into a QE money hurricane?
    Sep 14, 2012. 01:12 PM | Likes Like |Link to Comment
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