Is GM Finally Taking Action? Move Over, Whole Foods and Unemployment Numbers Making Big Gains

Who ya gonna blame?

Image courtesy of iaodesign/FreeDigitalPhotos.net

Image courtesy of iaodesign/FreeDigitalPhotos.net

It only took several years, but it finally occurred to GM that maybe now’s the time for some people in its ranks to actually face consequences for their actions following a massive recall linked to 13 deaths. GM CEO Mary Barra said, “This is an interim step as we seek the truth about what happened…It was a difficult decision, but I believe it is best for GM.” Whatever that means. Two unidentified engineers were placed on paid leave as GM continues to figure out who and what went wrong on 2.6 million vehicles with faulty switches. GM even enlisted NASA’s (yes, that NASA) Engineering and Safety Center to assist with the investigation as to whether the recalled cars are still even safe to drive with just the ignition key in them. Incidentally, this is not NASA’s first foray into the automobile industry. The space organization first worked with Toyota back in 2010. As for GM’s stock, well it took about an 18% hit this year.

Organic for all…

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Just when you thought organic food was just for the lucky, financially solvent few, in comes Wal-Mart to strike a deal with organic foods company Wild Oats, because – get this – they want organic food to be more affordable. Currently, Whole Foods dominates the organics market. But perhaps not for long as the mega chain did a survey and found that 91% of its customers would go organic for just the right price. Wal-Mart thinks that right price is going to be at least 25% below other national organic food brands. Starting this month, in some of their stores you can start picking up your Wild Oats products, including pasta, sauces and broths.  If you don’t find any yet, don’t sweat it. Eventually all 4,000 US stores will have you on an organic regimen in no time.

Getting back at the Great Recession…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Americans are looking a lot more employed these days. Fewer people applied for unemployment benefits for the week ending April 5 – only 300,000, according to the Labor Department.  While that still sounds like a huge number, it actually dropped by 32,000 applicants. Believe it or not, that happens to be a very good thing since numbers like that haven’t been seen in seven years, just months before the Great Recession began.

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Steel Numbers, Medicare Lottery? and Has Your Mars Bar Gone to the Dogs

Steel yourself…

Image courtesy of Baitong333/FreeDigitalPhotos.net

Image courtesy of Baitong333/FreeDigitalPhotos.net

It was big fun on Wall Street today with a slew of companies announcing their earnings. But the one everyone was waiting to hear from was Alcoa. In keeping with unofficial tradition, the global aluminum company, Alcoa, kicked off the first quarter earnings season by announcing their earnings on Tuesday afternoon. And wouldn’t you know it – they beat the Street’s predictions and were up by $0.09 per share. Wall Street loves Alcoa because when Alcoa goes up, it’s a pretty sure bet that a whole bunch of other companies are going to follow. Of the 21 companies that announced earnings, 11 beat the Street, two were right on target and eight got beat by the Street.

Doctor Moneybags…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Back in 2012, Medicare reimbursed close to 900,000 healthcare professionals to the tune of $77 billion. The average provider received $87,883. But not West Palm Beach opthomalogist Salomon Melgen. He seemed to have won the Medicare lottery, getting reimbursed around $21 million. It must be because he’s a superior doctor, right? But he wasn’t the only one making a some major cash as six more doctors also surpassed the $10 million mark. Minor things like that got the government a tad bit suspicious that maybe people were committing fraud. Yeah, I know. Hard to believe. So after years of secrecy, the beans have finally been spilled and detailed records are being released as to who got reimbursed and for just how much. Oh and btw, Dr. Melgen is involved in a criminal inquiry with a US senator.

Nothing to bark at…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Ū Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

In the $74.5 billion industry we call pet food, Mars, maker of some of your most beloved candy bars, decided to sell off their dog and cat kibble division. Procter & Gamble picked it up for a hearty $2.9 billion thereby adding brands, including Iams, Eukanuba and Natura brands, to their established canine and feline menus. While I am certain the fine folks at Mars are totally down with our four-legged friends, the fact is their pet food division wasn’t really bringing in enough cash to make it a keeper. By selling off the pet food division they can now free up some of that cash for research and development and also share the new found wealth with some very lucky shareholders, many of whom, I am certain, make wonderful companions to their furry friends.

All Good Things Must Come to a Land’s End, Fly Me to the Moon…Just Not On American Eagle and Food Fight!

Spinning into control…

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Back in 2002, Sears (SHLD) was loving Land’s End (LE) so much that it plunked down $2 billion for the brand. But sadly for Sears, the love was not reciprocated. So on Friday,  Land’s End, the company, famed for it’s no-iron shirts and rugged, yet elegant khakis was spun off, once again as its own company, with shares left to drift off into the hands of eager shareholders. Sears, which also own K-Mart, has been looking for ways to get some value out of the company and to make its stores…well to make people actually want to go into them and shop. Apparently people love shopping at Land’s End more since their net income was $79 million, up 58% from the previous year.

Up up and away…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

The results are in for the airlines and their rankings. If you want to know how they fared, just ask Wall Street. JetBlue’s (JBLU) stock went up today. That’s what happens when you come in at the number two spot. American Airlines (AAL) didn’t do as well  – no surprises there – and the Street sure let it know. They came it at a measly number 9, while its regional airline, American Eagle, was last. If you’ve flown American or American Eagle recently then you know that’s NO great shock. Just karma. As for the number one spot, well you can congratulate Virgin America. But don’t bother looking to Wall Street’s reaction on that one. Virgin America is a privately owned company.

Food fight!

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Image courtesy of nongpimmy/FreeDigitalPhotos.net

If you’re anti-war (and who isn’t?), you might want to put aside your beliefs for this next one. Or join in on the tasty fun as Taco Bell whips out yet another attack on McDonald’s and its ever dependable breakfast menu. The breakfast wars continue to heat up and Taco Bell is eager to take a huge bite out of the $50 billion a year fast-food breakfast industry. With its Waffle Taco all set to go against McDonald’s perennial classic EggMcMuffin, Taco Bell has been digging deep into its arsenal, with its latest ad that tries to paint the Golden Arches as more old hat than old school.

 

 

Springing Unemployment, GrubHub Grab and High Frequency Drama

Look out unemployment, here comes Spring…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

Weather, that fickle pernicious economic backstabber couldn’t stand in the way of the 192,000 jobs that were added last month, according to The Bureau of Labor Statistics.  However, experts were expecting that number to be a bit higher. They’re still satisfied, though, since unemployment stayed at a stubborn 6.7% – but to be fair, experts weren’t expecting that figure to budge from its perch anyway. If that doesn’t make you giddy, then how about the fact that there were actually more jobs added in January and February than previously reported. I know you can’t stand all this excitement but wait…there’s more!  The private sector has replaced/regained/re…whatever all the jobs it lost since December 2007 – which was the beginning of the ugly, terrible, horrible period we abhorrently call The Great Recession.

GrubHub is taking a big bite out of Wall Street today…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The latest IPO to grab Wall Street’s conditional love is GrubHub, the Chicago based online service that gets a commission from a restaurant every time YOU order from their website. The company which also owns Seamless.com and Menupages raised a hefty $192 million and the stock flew over 40% today. It’s currently serving over 28,000 eating establishments from San Francisco to London with sooooooo very many more businesses to go. Nothing like an established and profitable business to get the stock market to look your way.

High frequency trading: Insider or Outsider?

Image courtesy of rattigon/FreeDigitalPhotos.net

Image courtesy of rattigon/FreeDigitalPhotos.net

In the ongoing high-speed trader saga, following Michael Lewis’s book, “Flash Boys: A Wall Street Revolt” where he accuses some traders of rigging the stock market, US Attorney General Eric Holder joined in the fun: “I can confirm that we at the United States Justice Department are investigating this practice to determine whether it violates insider trading laws.” High-frequency/high speed traders use computer algorithms to execute transactions in milliseconds anticipating trades before they happen. Charles Schwab, the famed founder of the discount trading firm, called high-frequency trading a “growing cancer.” So clearly he’s not feeling the love there. Dems have ideas for taxing the practice into oblivion.  Republicans have plans not to pass those ideas. High-frequency traders have plans to continue what they are doing since they believe they provide liquidity to the market.

 

 

 

Brokestone, Unlimited ATM Heists? and Writing Barnes & Noble’s Next Chapters

Brookstone’s goes Halloween…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

What does a seasonal store that sells Halloween related merchandise have in common with a gadget store? Nothing really. But Spencer Spirit Holdings, where you probably shopped for Halloween merchandise just bought Brookstone, the gadget store where you apparently didn’t shop. The gadget company finally cried bankruptcy and agreed to be acquired by Spencer Spirit for $147 million. Brookstone, long the seller of items you obviously don’t think you need, including (in my opinion) an unusually large array of massagers, operates out of 244 locations, many of those at airports.

Don’t stop at the ATM…

Image courtesy of 2nix/FreeDigitalPhotos.net

Image courtesy of 2nix/FreeDigitalPhotos.net

You might want to reconsider using the ATM for the foreseeable future and stick to using your credit card instead. Once again, individuals who would rather resort to crime than actually earn their spending cash have figured out yet another way to rip off people who actually work hard for their money. The scam, not-so-charmingly nicknamed “Unlimited Operations” involves changing the controls on ATMs to be able to access unlimited withdrawls, whether the funds are there or not. So simple yet so sinister. In one instance, thieves/hackers/future inmates scored $40 million with just 12 debit accounts. Imagine if these criminals used their ingenuity and industriousness in more productive ways, like curing disease and ending world hunger…

Chapter and e-verse…

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Image courtesy of adamr/FreeDigitalPhotos.net

Barnes & Noble’s next few chapters are looking rather grim. Besides losing $2 billion during the last holiday shopping season, its e-reader isn’t fairing so well against Amazon’s Kindle and the perennial crowd pleasing iPad. Then one of B&N’s  largest investors, Liberty Media decided it is going to sell most of its preferred shares. Naturally, this caused shares of the bookseller’s stock to head south. What’s in store for the once mega-powerful bookseller remains to be seen (or read I suppose).

Faulty GM, Tesla’s Not Blooming in the Garden State and the IRS Has a Great Idea

As if you didn’t know…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Worst. Day. Ever. GM CEO Mary Barra sat through a brutal (though well-deserved, some would argue) Senate panel grilling demanding to know how GM could be so blatantly – and perhaps, criminally – negligent. Even though Barra has only been at the helm of GM since January, she was the one to come under fire over faulty ignition switches that have been linked to 13 deaths, so far. A GM engineer said that he’d never signed off on changes for the switch, but wouldn’t ya know it…documents show that very same engineer actually did approve changes. “I don’t see this as anything but criminal,”  said Sen. Kelly Ayotte (R-N.H.), who as a former prosecutor knows a thing or two about crime. By the way, this engineer is still gainfully employed at the company. Actually, nobody has yet been fired over this.

New Jersey is pulling the plug…

Image courtesy of Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net

Image courtesy of Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net

Bridgegate isn’t Chris Chritie’s only problem these days. Tesla just filed notice today that it intends to sue the Garden State in what should prove to be a highly entertaining showdown. Tesla accuses the New Jersey Motor Vehicle Commission of not playing nice by pulling the plug on the luxury electric car company for daring to sell their cars directly to the buyer instead of through a car salesman. You can laugh now. Or if you live in New Jersey feel free to cry. According to Garden State regulations, new car dealers need to have a franchise agreement, which basically means if you want to buy a car you have to go through a car salesman to do it.  Members of the State Auto Dealers Association i.e. the car salesman are the ones who insisted the Motor Vehicle Commission take action against Tesla. And yes, the State Auto Dealers gave way more money to towards campaigns than Tesla did. Do we have an understanding now?

Taxing on the IRS…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The tax code is too confusing? Imagine that. In one of the more anticlimactic statements of the century IRS Commissioner John Koskinen actually said what everybody else has been saying forever -that it would be a great idea to make the tax code simpler, especially for the alternative minimum tax and companies that do business abroad. Also, dealing with expenditures is like fighting a guerilla war with special interests.  Bet you never thought you’d hear guerilla and IRS in the same paragraph. Even though the filing deadline is still 13 days away, the IRS has received 73 million returns and issued $207 billion in refunds .Now go stimulate the economy with that refund of yours.

The Buck Stops at Facebook, The Path to Nowhere and Flash Angry Mob Boys

You do realize that’s way below minimum wage…

Image courtesy of Master isolated images/FreeDigitalPhotos.net

Image courtesy of Master isolated images/FreeDigitalPhotos.net

In some countries paying an employee a yearly salary of $1 is nothing short of slavery. But here in the United States that’s the salary earned by 29 year old Facebook founder and CEO Mark Zuckerberg. Sure he took a took a 67% hit in his salary from the previous year but he made up for it when he exercised some stock options that scored him $3.3 billion. He still owns 426.3 million Facebook shares. Zuckerberg is currently worth about $27 billion and is ranked the world’s 22nd richest person.

Here we go again to nowhere…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

“We can’t keep spending money we don’t have,” said House Budget Chairman Paul Ryan. But why should that stop Washington. Ryan, R-Wis., released a plan that would raise NO taxes, REPEAL Obama’s healthcare laws and do all sorts of other nifty things with which you may or may not agree. The plan would cut $5.1 trillion (Note the “t”) of budget spending over the next ten years. Dubbed “The Path to Prosperity” the plan isn’t actually expected to go far…well actually anywhere, especially in a Democratic controlled house. But that’s not going to stop them from debating it for the next two weeks. So sit tight.

Don’t be such a trader-hater…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Michael Lewis’s controversial new book “Flash Boys” about how high speed traders and high-frequency traders manipulate the stock market hit a lot of Wall Street nerves today with many high-speed traders fighting back that they are nothing short of upstanding businessman (I added that last part). The Modern Markets Initiative was particularly ticked off by Lewis’s comments on 60 Minutes Sunday night when he said “Stock market’s rigged.” The Modern Markets Initiative fired back saying,  “The markets are not rigged. Saying otherwise is a broad generalization that lumps the vast amount of good market behavior in with a few bad actors.” BTW, members of the Modern Markets Initiative are high-frequency trading firms. Meanwhile the FBI has launched an investigation into high-speed and high-frequency trading.