Divided They Fall at United; Puerto Rico’s Fiscal Plans Fall Short; Barnes & Noble is Singing the Fiscal Blues

Who me?

Image courtesy of  jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

The airline United is anything but these days as honcho Jeff Smisek ducked out of the company he had been helming, along with two other executives. Apparently, it’s because of a Port Authority investigation that’s in full swing stemming from some events in 2011 that resulted in the “chairman’s flight.” The “chairman” refers to former Port Authority chairman David Samson, who managed to finagle United to offer twice weekly flights from Newark airport to Columbia, South Carolina. While I’m sure Columbia, South Caroline is a fabulous place, that particular flight route was initially deemed unprofitable. So what made the route become profitable all of a sudden? Coincidentally, David Samson’s weekend home is located there and that flight makes for an awfully convenient commute. See where I’m going with this? But the burning question is if those flights were a sort ahem bribe from the airline or a shakedown by Mr. Samson in exchange for some investment cash and other dispensations from the P.A. That all remains to be determined. David Samson already resigned in 2014 after a probe began over intentional lane closings on New York’s George Washington Bridge. Did I mention Samson was a close confidant of Chris Christie. Just saying. Days after stepping down, the Newark-Columbia route was shut down. I guess it wasn’t profitable anymore. As for Smisek, well he still walked away with $5 million and another $3.5 million in stock.

You debt-or believe it…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Puerto Rico thinks they finally have a plan to fix all that fiscally ails them. To address the territory’s $72 billion debt, a panel put out a five year plan to restructure $47 billion of it. With bondholders left to pick up the remainder, Puerto Rico will still be left with a $14 billion financing gap between 2016 – 2020. Lucky bondholders. Debt from the power, water and sewer companies is not included. The plan includes many reforms including a lot of cuts to education and teachers’ pensions. Why education is always the first to get spending cuts is weird since kids aren’t the ones responsible for creating debt. Know what I mean? Also, the plan calls for exploring public/private partnerships for hospitals, highway, building and transit authorities. The plan also wants to explore changes to the tax laws because, after all, why should the United States be the only place that needs to overhaul its tax code? As with any iffy fiscal plan, no timeline has been set which, in my most humble opinion, doesn’t bode well. Even then, the plan still needs approval from legislature and the governor.

What’s in store…

Image courtesy of adamr/FreeDigitalPhotos.net

Image courtesy of adamr/FreeDigitalPhotos.net

Barnes & Noble, though it may be the largest book store chain on the planet, still took a big old $35 million hit on $939 million in sales – worse than the year before when it saw a loss of $28.4 million Hey, the bigger they are the harder their sales fall. But who knows? Maybe with new CEO Ron Boire taking the reigns – as of yesterday – maybe there’s still hope for the embattled bookseller. These new earnings reflect B&N’s spin-off of its college-division, 600 stores and the Nook, B&N’s shaky attempt at putting its electronic stamp on the e-reader industry. The bookseller just can’t seem to make strides against Amazon. Well, to be fair, most companies find Amazon to pose quite the challenge. In any case, B&N lost 68 cents a share when last year at this time it only lost 56 cents a share.  $17 million of B&N’s loss was from the Nook and this was B&N’s fifth straight quarter of losses, sending shares down today over 16% at one point today.  But B&N has a plan, so they say for a new store prototype. Those stores will be considerably smaller and carry a larger assortment of merchandise, including toys and games, which incidentally saw a 17.5% increase for the chain.

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