Greece’s Chance to Save Itself; BofA Banks Big; It Figures: IRS Numbers Need Work

Come on Greece, you can do it…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Greek Prime Minister Alexis Tsipras isn’t down with the reforms proposed by Greece’s creditors in order to get his country the financial aid it so desperately needs. Tsipras even went so far as to call the reforms “irrational.” But you know what’s actually irrational? Letting your country’s banking system collapse as your homeland dives head-first into financial ruin. So instead Tsipras has decided to take one for the team, embracing the strict reforms and urging his MP’s to the same.  Aw. Isn’t that sweet of him? What a guy. Those reforms, which are putting frowns on the faces of many Greeks, include imposing higher taxes on just about…everything. Early retirement would not only now be off the table, but the retirement age would also go up to 67. And while Tsipras may do his political best to get his MP’s to agree to these measures, he’s already getting some heated opposition from the Syriza Party who have no intention of allowing the reforms to easily pass.

Legal-ease…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Bank of America is having a very good day. Make that a very good quarter. After some unimpressive quarters, the bank had a major rebound in large part because it doesn’t have to pay as much money to a bunch of lawyers anymore.  Because of the bank’s sketchy role in the 2008 fiscal crisis, BofA already had to fork over $13 billion to both federal and state regulators. That was just for the settlement. The bank’s legal fees this time last year were a staggering $4 billion. However, this quarter, those fees went down to only $175 million. It probably would have been a whole lot cheaper for Bank of America to just admit its shifty involvement from the get-go. But, oh well. BofA took in close to $5 billion in profit this quarter, with $22 billion in revenue and 45 cents per share, when analysts only expected 36 cents a share. What is down from a year ago are delinquent mortgages. Those fell by more than half to an almost respectable 132,000.  And nobody is complaining about that drop.

In case you were wondering…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

U.S. taxpayers filed a whopping 126 million tax with 94 million of those filers even having health insurance. $249 billion were awarded in refunds to 92 million filers. The average refund came in at $2,711.  A total of 7.7 billion in subsidies was claimed and 6.6 million taxpayers paid an average of $190.00 in fines for not having insurance. As for the IRS’s customer service, or lack thereof, the agency received 50 million calls, although 8.8 million of those calls were disconnected by the IRS. Oops. 20 million filers requested to speak to a real live person at the IRS and 37% actually got to do just that. They only had to wait an average of 23 minutes. Clearly they possess the virtue of patience.

Morgan Stanley Finally Owns Up to All the Trouble It Caused; It’s a Darn Claim Unemployment Filings Are Up; Sears is Losing It

It was just a matter of time…

Image courtesy of  dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

Morgan Stanley is taking a bit of a beating today on Wall Street now that it has finally finally settled with the Department of Justice over its shady little role leading up to the 2008 financial crisis. Morgan Stanley reached a deal with the DOJ  that’ll have the bank paying $2.6 billion to get Uncle Sam off its back.  Attorney General Eric Holder and the DOJ will graciously end their probe into whether Morgan Stanley duped investors by telling them how very great their home loans were when in fact, they were anything but. This settlement is sure to put a major dent in MorganStanley’s 2014 profits. By major, I mean it’ll eat up nearly 50% of what MorganStanley got to take home in 2014. It officially lands Morgan Stanley on that illustrious list of banks who also had to shell out billion dollar settlements to the DOJ for their smarmy actions leading up to and during the 2008 financial crisis, including  – but not limited to –  Bank of America who reigns the top spot with a $16.7 billion payout. It’s followed by JPMorgan Chase which holds the number two spot for its $13 billion settlement. Citigroup rounds out the group with a $7 billion settlement.

Don’t stake this claim… 

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

The number of people filing jobless claims went up. Not down. But up. The number climbed to 313,000 people instead of a projected 290,000. While the news is a bit of drag, economists  – who presumably know a thing or two  – are telling us that we can’t work ourselves up into a collective panic over one month’s lousy numbers. At least for now, anyway. First, the number of people filing those claims is still relatively close to the 300,000 mark. If it were way past that number, then yeah, having a fiscal freak out might be considered almost acceptable. Two, the labor market’s rockin’, sort of, and hiring is strong, which brings us to reason number three. Because hiring is strong, wages are actually going up. Walmart, TJ Maxx, Gap…the list goes on as to how many retailers are raising its employees’ wages. All these factors allow us to almost ignore this fiscal hiccup. However, leave it to Fed Chairwoman Janet Yellen to remind us that, “wage growth remains sluggish” and that there’s always room for improvement.  You don’t say.

Loser…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Sears isn’t having a very good year. Actually it hasn’t had a good year in…well, many many years. It just reported its fourth straight year of losses with this quarter losing $159 million and $1.50 per share. Incidentally, that figure is not nearly as dismal as last year’s $358 million fourth quarter loss. So you see, there is a bright side. Sort of. Run by the The Hoffman Estates, which also runs Kmart, the company has tried just about everything to help the ailing retailer reverse its downward financial spiral. From store closures to slashing inventory, the retailer has tried countless ways to cut costs. The company closed over 230 stores in 2014 and today has over 1,700 stores, which sounds impressive. But you know what’s more impressive? The over 3,500 stores the company had five years ago. The latest plan is to spin off between 200-300 stores into a REIT, which stands for Real Estate investment trust, by the way. The idea is apparently going to allow the failing company to pick up some $2 billion and help turn the fiscal tide. But if you want to know how exactly that works you’re on your own.

Happy Über New Year; DOJ: You’re Up, Morgan Stanley; Labor Department Jobless Claims are New Year’s Bummer

Year end surge…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

A heads up to all of you located in cities where Über is actually allowed to operate: Über is getting ready to ring in the New Year with some price surging. Of course, Über prefers the less obvious term, “dynamic pricing.” Just don’t expect to see any dynamic pricing for the rider, who might very well be paying as much as seven times the usual fare if the service is used between 12:30 am and 2:30 am. New Year’s is expected to be the busiest night of the year for the ride-sharing app, and many other services similar to it, due to the heightened demand on this particularly auspicious day. On its blog, the folks at Über said they are expecting to give more than 2 million rides in a 24 hour period and you’re best bet for the service is to call right when the ball drops or if riders are feeling especially adventurous, they should wait until after 2:30 am. Über also offered to graciously  – and economically – text riders to let them know when surge pricing – excuse me, I meant to say “dynamic pricing”  – ends.

Unsettled business…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

It’s Morgan Stanley’s turn to tangle with the DOJ in an effort to reach a settlement for Morgan Stanley’s role in the 2008 financial crisis. Like its peers, including JPMorganChase, Bank of America, Citigroup, etc…Morgan Stanley is also staring down the wrong end of a DOJ investigation for its role in getting New Century Financial Corp to issue subpime mortgages. Apparently, the bank knew that homeowners would have a hard time paying mortgages but still issued them anyways. Well, that didn’t work out for anyone, now did it? Incidentally, New Century went bust following a bankruptcy filing back in 2007.

Wishing you an employment-filled New Year…

Image courtesy of nonicknamephoto/FreeDigitalPhotos.net

Image courtesy of nonicknamephoto/FreeDigitalPhotos.net

Leave it to the Labor Department to help ring in the new year with some disappointing news: namely that the number of people filing jobless claims rose last week by 17,000. While the total number of people still remains below the 300,000 mark (just barely), we are still left with 298,000 making a New Year’s resolution to get a job (we hope, anyways). Analysts actually only expected that number to hit 290,000, but, oh well. Can’t accurately predict ’em all. But we are supposed to be reassured by the fact that this time of year brings with it good tidings of volatile claims and all fiscal signs still point to a decent economic recovery and climate. Also, the four-week average, which tends to be more accurate, was only up by 250. So maybe it’s okay to breathe a little little sigh of relief.

BofA Boffo Payout; Nyet to Big Macs; and HP’s Big Little Surprise

Would you like that in small bills?

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Bank of America just set a new record but they probably wont be bragging about this particular accomplishment. The bank officially (as of tomorrow, anyways) holds the dubious distinction of having to pay the largest settlement ever to settle a number of allegations brought by Federal and state authorities over its sales of mortgage-backed securities leading up to the 2008 financial crisis. That magical number weighs in at a monstrous $17 billion easily surpassing the paltry $13 billion that JP Morgan Chase had to pay to settle similar allegations. The money will be divided with $7 billion going towards consumer relief and the rest going towards paying back Uncle Sam for all the misery it caused. But that’s not all. As part of the deal, BofA actually has to admit – ADMIT – wrongdoing. Countrywide Financial and Merrill Lynch will also be held to the task as the bulk of bad mortgages came courtesy of them when BofA acquired them in 2008. Of course no actual heads will roll. Or will they? One Los Angeles US attorney filed a civil suit against Countrywide co-founder Angelo Mozilo. While BofA must not have been too happy about the settlement, Wall Street sure was as shares of the bank took a little climb following the news.

No need to supersize that just yet…

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Image courtesy of tiverylucky/FreeDigitalPhotos.net

You know Russia is royally ticked off at the US when McDonalds starts to suffer. Of course that wasn’t the official line coming out of the Kremlin, mind you. But it is true that four McDonald’s in Moscow were just shuttered for “sanitary reasons.”  One of the “temporarily” shuttered eateries happens to have been one of the most frequented McD’s in the world. In fact, Russia is one of the biggest markets for McDonalds. When asked if the closures had anything to do with the sanctions, officials referred to the “sanitary” statement without actually answering the question. Hmmm. However, there are still well over 430 McDonalds in Russia. For now, anyways.

Surprise surprise…

Image courtesy of jannoon028/FreeDigitalPhotos.net

Image courtesy of jannoon028/FreeDigitalPhotos.net

HP surprised everyone today, perhaps even itself, as it reported increased revenue in its earnings. While it was a modest 1% gain, it was nothing to scoff at. The increase was due in large part to its personal computer division which took in a plump 12% increase. The company is currently undergoing a major overhaul. Which is kind of ironic as my brand new HP laptop (I purchased it in February) is also undergoing a major overhaul at Geek Squad headquarters –  that is after already spending lots of quality phone time with several Geek Squad technicians over the last few months – but I digress. Profits came in at just under a billion which might seem impressive. But it’s not since last year at this time the HP reported $1.4 billion in profits.

 

 

Russia: Sanctions? Ha! I’ll Show You Sanctions! More Boffo Hits to BofA and Time Warner Not Feeling Foxy

Putin it out there…

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Russian president Vladimir Putin always has to have the last word, doesn’t he. He’s like one of those inflatable punch toys. No matter how you much you punch it, it just floats right back up. I am talking about sanctions, mind you. The ones that Russia is imposing on the West, including the United States. Russia majorly one-upped the entities imposing sanctions on it over tensions in the Ukraine by banning agricultural products from the US, the EU, Canada and even Japan. They plan to have this ban in effect for a year!  Apparently it’s a very very long list of items too. So yeah, if the West wants to send Putin a message it’s going to have to think way beyond that teeny tiny economic sanctions box. Of course food prices are sure to rise in Russia with a move like this. But make no mistake that there’s also a steep $1.3 billion price to pay in the US and the rest of the West. And that’s going to be awfully hard to swallow.

And it’s official…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Bank of America is out almost $17 billion (it will be anyways) all because it misled investors over mortgage-backed securities. This settlement comes just weeks after a New York judge ordered the bank to pay out $1.27 billion for its less than virtuous Countrywide Financial “Hustle” program which is just as bad as it sounds. Some of the settlement cash will actually go towards helping struggling homeowners by reducing their mortgages. The rest is fees fees fees and a few billion in penalties to various federal, state and local entities. BofA CEO Brian Moynihan and US Attorney General Eric Holder have been hashing out the details as of late. BofA was trying to get away with paying just under $13 billion but fate, the justice system and AG Holder’s impending lawsuit had other plans. Now BofA holds the dubious distinction of holding the record for the largest settlement payout, knocking JP Morgan off its $13 billion podium. But Bofa still comes out a winner since no criminal charges will be filed for what could arguably be considered awfully criminal behavior.

Time Warner is running out?

Image courtesy of dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

There was no shortage of love today on Wall Street for Rupert Murdoch and his 21st Century Fox empire now that his $80 billion bid for Time Warner has been scrapped. In fact, the media company’s stock surged while, ironically (or maybe not) Time Warner’s second quarter earnings took a hit. Sure its quarterly profits were up 10% with $6.8 billion in quarterly revenue. But the stock took an 11% dive thanks to Fox just because its interest in its rival came to a bittersweet end.

 

Russia is Not Kicking the Right Game for Adidas, Will Brian Cornell Hit His Target? And BofA’s Boffo Payout

From Russia with loss…

Sira Anamwong/FreeDigitalPhotos.net

Sira Anamwong/FreeDigitalPhotos.net

Adidas lowered its full year profit target thanks to Russia. And golf. But not Russian golf, it should be duly noted. Despite the fact that Russia is hosting the 2018 World Cup, the world’s second largest sporting goods maker and World Cup sponsor decided to shutter a bunch of stores and scrap plans to open a bunch more in that region. But hey, that’s what happens when your governmemt supports Ukranian rebels. The German-based company is weary of Russia and its ability to pull in the sales it has in the past because of all those sanctions coming courtesy of Europe and the US. Which is really too bad because sales in Russia for the brand were over 1 billion euros in 2013. Now Adidas expects net profit of 650 million euros when it previously expected those numbers to be between 830 million euros and 930 million euros. Go ahead and do the dollar conversion math. Just kidding. Adidas initially expected net profit between $1.1 billion and $1.2 billion but now it doesn’t even expect to go past $870 million. As for the company’s Taylor-Made golf division…well, it’s golf. And not soccer. And across the pond that means a lot.

Hit or miss?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Target’s making big news today. And no it’s not for any security breaches or lousy earnings. Well at least for now, anyway. The news out of the Minneapolis-based company is the appointment of its new CEO Brian Cornell, the first CEO in Target’s history to come from outside the company’s ranks. The 55 year old Cornell recently held a big gig over at Pepsi and some rumors said he was going to be the successor to the throne there. But instead he made his way to the embattled Target, which is currently experiencing declining same store sales, a troubled Canadian expansion (Oh, Canada) and continuing fall out from its holiday season security breach. So take a seat and let’s watch to see if the seasoned exec can pull the retail giant out of its slump and get that stock back on the upswing.

Another one bites the dust…

Image courtesy of hin255/FreeDigitalPhotos.net

Image courtesy of hin255/FreeDigitalPhotos.net

And this time it’s Bank of America as a Manhattan judge ordered the bank to pay a $1.3 billion fine for mortgage fraud. Mind you this is not part of settlement talks that Bofa is currently having with the US Department of Justice. This latest penalty was from an actual lawsuit that BofA lost that and was connected to “The Hustle” program. As sexy as that sounds it is anything but as loans that were made at Countrywide Financial were rushed to “High Speed Swim Lanes (HSSL)” and sold to Fannie Mae and Freddy Mac. Oh if only the actual dealings were as playful as the terms used to describe the dubious actions behind them. Bofa was found guilty of getting its employees to take bad loans off the books and put them right into the hands of unwitting investors. As for the DOJ settlement, the US wants BofA to pony up $17 billion while the bank was looking more toward the area of between $12 billion to $13 billion. The two sides continue to hash out the ugly details, even, I am sure, as I write this. The company released its second quarter earning weeks ago to the tune of a 43% drop thanks to its declining mortgage business and increasing legal fees.

 

Dissing 21st Century Fox, BofA Not Feeling the Legal-ease and Hershey’s Not So Sweet News

Rejected…

Image courtesy of Ohmega1982/FreeDigitalPhotos.net

Image courtesy of Ohmega1982/FreeDigitalPhotos.net

Looks like Time Warner has no love for Rupert Murdoch. The media tycoon, who reigns over 21st Century Fox, put out an offer last month to buy its rival for $80 billion, or about $85 a share in stock and cash. He even graciously offered to sell off CNN, to avoid any anti-trust and regulatory issues. But he was still denied since it was “not in the best interests of Time Warner.” Many feel, however, that Murdoch was unfettered by this rejection and will likely come at Time Warner with an even better offer , especially because Murdoch is such a big fan of HBO. I’m sure he likes the hit show Girls, but it’s probably more about HBO’s $20 billion value that really makes him a super fan. That, and the fact that a “merger” like this could pull in $65 billion a year in revenue. Wall Street also appreciated news of the rejection and sent Time Warner shares up over 15%.

Banking on lawyers…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Bank of America came out with its earnings today and yeah…they had profits. Too bad they were down over 40% from a year ago, which means there was nothing for them to brag about today. Unless it wanted to brag about how its legal bills went up from $471 million last year to $4 billion this year. BofA can thank its lawyers for its $2.3 billion profit which was down from $4 billion a year ago. The Charlotte-based bank gained $0.19 a share instead of analysts’ predictions of $0.29 a share. Mortgage revenue was also down  but man, it was those legal bills that really put a crimp in profits. Good thing (or not?) that it reached a $650 million settlement with AIG for some outstanding mortgage bonds. However, the bank’s legal bills are far from coming to a halt. If it could just hammer out a deal with the DOJ for all the damage it caused leading up to the financial crisis by selling bad mortgages…

 

Not so sweet on this…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Hershey’s is about to induce a migraine. With commodities like cocoa and dairy going up, the number one candy maker in the United States is hiking up its prices by 8%. It’s the first time in three years that they’re doing this and who can blame them (well, I can) since cocoa and its fellow chocolate making ingredients are almost at three year highs. You can expect other companies like Nestle SA and Kraft to follow (though maybe they wont, but they probably will). At least you’ll have some time to prepare as you won’t feel it in your wallets until next year, when the hikes are set to take effect.