Uh Oh Canada: Trump Starts Up With Our Neighbors to the North; Marissa Mayer Walks Away Golden; Nasdaq Yowza!

Good Tariffs don’t make good neighbors…

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Image courtesy of dan/FreeDigitalPhotos.net

As if things weren’t awkward enough between the President and Mexico, now it’s the U.S.’s relations with Canada that are getting the Trump treatment. This time it’s Canada’s lumber industry that’s getting caught up in the import debate as the President’s plan calls for a tariff of up to 24% on Canada’s lumber products. Canadian lumber companies are pretty ticked off and Canada’s Prime Minister, Justin Trudeau, is itching to fight back. Just how remains to be seen. In case you didn’t know, Canada is the world’s largest soft-wood lumber exporter and the U.S. is its biggest customer, reportedly importing $6 billion worth of the resource just in 2016. But here’s where things get dicey, well for the U.S. anyway – shares of home-building companies took a very unwelcome dive on the soft-lumber dispute, as Wall Street realized raw materials could get a whole a lot pricier. That will likely end up leading to a very unpleasant domino effect on other related industries. If you’re looking to buy a home, take note that this Canada lumber is issue is sending home prices up as well. Incidentally, Canada is going to stop importing U.S. dairy products, as a sort of retaliatory action. Sort of. But basically, this means dairy farmers are getting screwed here too. And don’t you hate when that happens? On the flip side, U.S. lumber producers said that cheap lumber imports from Canada, which are they say are unfairly subsidized by the Canadian government, have put a major crimp in their business and these tariffs will give the domestic lumber industry a much needed reboot.

What color is your parachute?

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Yahoo might have gone bust but Marissa Mayer will be walking away from the entity with $186 million lining her pockets. That’s even after Verizon agreed to buy the  beleaguered company. She’s sitting on 4.5 million shares of the failed internet company and she’ll get that substantial wad of cash once she pays to exercise her options. That $186 million is based on Monday’s closing price, in case you were wondering, and while Mayer may not have had the best run at Yahoo, the stock still tripled during her five-year CEO stint there. And as Verizon plunks down $4.5 billion for Yahoo, Mayer will take in another $3 million as part of her golden parachute. That’s besides the fact that last year she lost out on her bonus following the massive data security breaches that affected one billion Yahoo accounts.

Making a break for it…

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The Nasdaq broke the 6000 mark with a lot of help from big corporate gains and, believe it or not, even President Donald Trump. That’s because the President has big “tax reform and reduction” plans which involve reducing the United States’ onerous corporate tax rate from a whopping 35% to a more corporation-friendly, and globally competitive, 15%. Plans like that could mean a big boost all-around on Wall Street. Companies including Apple, Microsoft and McDonald’s, to name a few, reported impressive gains, sending the Nasdaq all the way up to 6034.74. If you’re finding Trump’s contribution hard to swallow, consider that the result of France’s Presidential election also factored into that 6000 point breakthrough. French Presidential Candidate Emanuel Macron’s first-round victory helped matters, probably because of his centrist politics, which apparently Wall Street digs. It wasn’t since March 7, 2000, that the Nasdaq broke the 5,000 barrier. But alas, that remains nothing but a very distant memory.  The Nasdaq, incidentally, is up over 10% since the beginning of the year and up way over 20% in the last twelve months.

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Apple Bites Back at EU; IMF Chief Found Guilty But She’s Still Allright; Lands’ End Going for New Beginning with Latest CEO

An inconvenient target…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

The EU might be demanding a whopping $14 billion from Apple, but it’s not going to happen so quickly. Or easily. Or at all, if Apple has its way. Back in 2014, the EU accused Ireland of skirting international tax laws when it let Apple park tens of billions of dollars there in order to keep it from getting into the grubby hands of pesky tax collectors. Apparently, Apple only paid a corporate tax rate of 3.8% on $200 billion of overseas profits. In exchange for keeping its profits there, Apple kept jobs there, all safe and secure. The EU said the tax deal amounted to illegal state aid and Apple needs to cough up the record setting fine. Both Apple and Ireland deny that they did anything wrong and think the EU needs to get its stories straight.  Apple says it was singled out by the EU because of its massive success – “a convenient target” as its lawyer so eloquently put it, and that the EU commission conveniently blew off tax experts that were brought in special by authorities in Ireland.  In the meantime, Ireland says that other countries should close their own loopholes and is accusing the EU of overstepping its boundaries as it interferes in member states’ sovereign affairs.

Guilty but not…

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Image courtesy of Sira Anamwong/FreeDigitalOhotos.net

She may have been found guilty of negligence over a payout that happened back in 2008, but it’s not entirely clear if IMF Chief Christine Lagarde is actually guilty of anything.  The trouble started when Lagarde was France’s Finance Minister. Her boss was none other than President Nicholas Sarkozy (half-brother-in-law to Mary-Kate Olsen, fyi). President Sarkozy’s good buddy was this tycoon named Bernard Tapie who got really angry with the French government and then sued it. You see, Tapie sold his stake in athletic company, Adidas, to French bank Credit Lyonnais, which as luck would have it, was state owned. The bank then went ahead and sold that very same stake for a whole lot more money than what Tapie was paid. Tapie cried fraud on the government and became embroiled in a fifteen year legal battle. Enter Lagarde, who against official advice, recommended private arbitration in lieu of continuing to pursue the expensive legal battle. Tapie was awarded an outrageously high 400 million euros (roughly $417 million), and for this Lagarde was found guilty because she didn’t contest the award (which came from public funds, mind you). Incidentally, investigators suspected that the arbitration process was not kosher and was actually rigged in Tapie’s favor. He has since been ordered to pay the award back. In the meantime, Lagarde isn’t even facing any jail time, much less a fine. That’s because the state, according to its own opinion, had a weak case, while Lagarde has an excellent reputation and is in good international standing. Boom.

Canvas is so last year…

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Lands’ End is going luxe again. After dumping its posh CEO, Federica Marchionni – after less than two years –  the company just announced it hired Jerome Griffith, formerly of Tumi, who just this year wrapped up selling the company to Samsonite Luggage to the tune of $1.8 billion. Griffith also held posts at Gap Inc. and Tommy Hilfiger and has a solid reputation for turning companies around. It was only three months ago that the company booted Marchionni, who previously held posts at Dolce & Gabbana and Ferrari. But alas, she couldn’t make it past the two year mark, as her vision for making Lands’ End an upscale brand, via the Canvas line, did not resonate with a customer bas that wasn’t even looking for upscale. Hence, she went the way of acid wash and parachute pants. Her vision was, in fact, so at odds with the Lands’ End customer base that the company had to eat a $4.4 million loss from the line.  The company also didn’t care for the fact that she stayed put in New York while Lands’ End offices were already comfortably situated in Wisconsin. Geography won’t be an issue for Griffith who is gearing up to set up house and home in the in the state. Lands’s End is counting on Griffith’s business acumen. During his run at Tumi, he saw revenues increase from $196 million in 2009 to $547 million in 2015.  And Lands’ End needs all the help it can get after watching its sales take in a loss last year of close to $20 million.