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.

Converse: Back the Chuck Off!; BofA Bummer; Whole Foods: I’ll Give That Tomato a 6

Chuck it…

20141015_091405

Converse, the force behind one of the most iconic shoes ever, not to mention my favorite pair of kicks, is heading to the courts. The legal courts, that is. The Massachusettes-based shoe company, a subsidiary of Nike, is suing 31 other companies for trademark infringement which basically means those companies have allegedly been ripping off the way cool, timeless design that has found their way onto famous feet since 1908. The company has reportedly spent hundreds of millions of dollars promoting the shoe and, in my most humble opinion, if there were/is such a thing as a shoe hall of fame, then Chuck Taylors ought to be inducted in to it. Just saying. Among the companies being sued are Wal-Mart, K-Mart and Skechers, not to mention Ralph Lauren and Tory Burch. I might add that I wear my Chuck Taylors regularly except I don’t think that’s going to help bolster Converse’s case. Converse is also filing a complaint with the International Trade Commission hoping to prevent counterfeit look-alikes from making their way onto our shores.

Hind quarters…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

BofA has surely had better quarters. The second largest bank (by assets, mind you) had a net income of $168 million losing $0.01 per share. A year ago at this time BofA earned $0.20 per share on $2.2 billion. Ah well, the past is in the past. But at least it’s not as bad as the $0.09 loss per share predicted by analysts. BofA can thank Uncle Sam for its quarterly losses as BofA had to shell out about $16.65 billion to the DOJ in settlement fees for the bank’s prominent, unappreciated role in the 2008 financial crisis and all those awful mortgages.

On a scale of 1 to 10…

Image courtesy of Pixomar/FreeDigitalPhotos.net

Image courtesy of Pixomar/FreeDigitalPhotos.net

Whole Foods is getting in on the ratings game.  Next time you stop in at one of their 400 plus stores, check to see if that head of lettuce falls under the “good,” “better,” or “best” category. Yes, your produce will now be categorized because the organic wholesaler wants you to know to what degree your chosen produce is affected by pesky pesticide and less than pleasing farming methods. Other factors that will be taken into consideration when scoring your produce include the amount of energy and water used. Indeed, several environmental factors can and will directly impact the score of that apricot you’ve been eyeing. No word yet if those environmental impacts will have an “impact” on your wallet but Whole Foods might also want to consider a scoring system for the price of its produce and flowers. For instance, it could rate its merchandise as “cheap,” “expensive,” and “I’m about to blow half my paycheck on a pineapple.”

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.

Twitter Tries to Up Its Game, Olive Garden Not Blooming and BofA Wants Quality Time With the Attorney General

Tweeting it all out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Twitter just announced plans to snap up SnappyTV for an undisclosed amount. SnappyTV is a video sharing service where users can do all sorts of convenient and entertaining things like clip and share videos. Twitter is forging ahead with great big plans to integrate SnappyTV and all the visual enhancements it is bringing with it into Twitter Amplify. And really, who doesn’t love visual enhancements?  The social media company is in a mad crush and rush to grow its user base after announcing a less than 6% increase in growth. Numbers like that did less than wow investors and so it is on a mission to find ways to justify its high valuation that many have been calling into question.

Darden leaves Wall Street hungry for more…

Image courtesy of Feelart/FreeDigitalPhotos.net

Image courtesy of Feelart/FreeDigitalPhotos.net

Darden Restaurants, the apparently not so forceful force behind the Olive Garden chain, failed to feed enough people and beat analysts expectation. Despite its efforts to dump the Red Lobster chain, the company’s profit wasn’t as high as Wall Street would have liked. Revenue for the period ending in May was a paltry $2.32 billion. But the hard-to-please Street was looking for $2.33 billion in revenue. Even though the company gained $0.84 a share, Wall Street was left unsatisfied and wishing for $0.10 more per share. The company and its food offerings is having a hard time competing with fast-food establishments that have been offering better quality food with more affordable prices. As a result, Darden’s net income fell a whopping 35% from a year earlier.

BofA feeling unsettled…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like Bank of America CEO Brian Moynihan wants to spend some quality time with US Attorney General Eric Holder. But bonding is not on the agenda. Instead, the BofA CEO wants to try and hash out the kinks over settlement issues. BofA, the second largest bank in the United States sold some really bad loans a few years back, in case you hadn’t heard. Now the time has come to pay for all the trouble it caused and the price tag on all that trouble is going to cost billions of dollars. Reps for the bank and reps for the Justice Department already had a bunch of meetings to try and reach an agreement. But the two sides just couldn’t play nice. So Moynihan probably took a cue from JP Morgan Chase CEO Jamie Dimon, who also personally met with Holder in back in November where the two sides emerged with a $13 billion settlement agreement. While the move seemed peculiar at the time, the fact is that it worked and the formula has been used with other naughty banks that helped cause the epic 2008 financial crisis.