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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…
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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?
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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.
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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…
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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…
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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.