It’s Equal Pay Day! Just Not For Everyone; JP Morgan Chase Chief Urges…Confidence; Wells Fargo Whistleblower Gets Last Laugh. Sort of.

100% Wrong!

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It might be 2017, but in a lot of ways it may as well be 1917. For some inexplicable reason a pay gap still exists between men, women and people of color. So weird, right? Hard to believe, but on average women still make 80 cents for every dollar a man gets. That’s assuming we’re taking about white, straight women. It all goes precipitously downhill from there. It’s a good thing women have an advocate in the form of Facebook COO Sheryl Sandberg.  Her nonprofit LeanIn.org has just whipped out its latest campaign, with a little help from Funny or Die, called #20percentcounts.  Because it absolutely does. One of the more startling facts of data from the Institute for Women’s Policy Research shows how closing that offensive 20% pay gap would actually lift over three million working women out of poverty. Out. Of. Poverty. In honor of Equal Pay Day, look for 20% discounts from several businesses to draw attention to this issue. For the full list, stop on by at LeanIn.Org.

Sauce-d…

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Well, if Jamie Dimon is saying it then it must be so. The JP Morgan Chase & Co. CEO just regaled us with his annual letter and started by saying just how friggin’ awesome the United States is and how it is “stronger than ever before.” But. It’s a big but. More like a BUT. He then goes on to discuss how “…something is wrong” with our country. He does, after all, sit on the President’s business forum, so I guess he would notice a few things that are…amiss.  For instance, he’s not digging the labor market, or rather there aren’t enough laborers in it. Of course, inner-city schools made a brief appearance in the letter, along with destructive anti-trade policies, infrastructure spending, corporate taxation, and those ever-pesky excessive regulatory rules. Dimon really took a lot of issue with all those banking regulations that are apparently marring the business landscape of the country. In all fairness, he would know a thing or two about that. Dimon feels the public should start showing a little more (un)conditional love towards our great big, fiscally-motivated financial institutions. The takeaway, according to Dimon’s letter? “Confidence is the ‘secret sauce’ that, without spending any money, helps the economy grow.” Got that? Confidence = Secret sauce=economic growth .Who knew?

Awkward…

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In all the talk about Wells Fargo’s illegal activities and all-around bad behavior, it seems a very important figure got lost – that being the very brave whistleblower who called out the bank over its fraudulent account opening activities. Said whistle-blower lost his job in 2010 after calling to complain to the bank’s very own ethics hotline, in addition to his supervisors,  about his suspicions that Wells Fargo was engaging in some problematic business practices. Now, not only was the bank ordered to hire him back, but it also has to pay him…wait for it…$5.4 million. Of course, that number pales in comparison to the $185 million worth of settlements that Wells Fargo has had to cough up already. But still, it’s gotta hurt for Wells Fargo. Well, cry me a river. Because after all, that $5.4 million is meant to cover back pay, damages, compensation and, of course, legal fees. This payout also has the dubious distinction of being the largest award ever ordered by OSHA. Naturally, Wells Fargo is not happy with the ruling and plans to fight it. As for the employee’s plans to return to Wells Fargo, well, that remains to be seen.

 

Busted! Data-Breaching Cyber-Crooks Indicted; Trump Dumps on China; Campbell’s Soup Aims for Comeback,

So not cool…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Prosecutors announced charges today against four very greedy men who hold the notorious distinction of having perpetrated one of the largest data breaches. Ever. They’ll have plenty of time to celebrate that odious achievement in what will presumably be a significant stretch of time spent in an prison cell sans internet. The alleged perps ran their illicit actives from 2012 until mid 2015, where they used their tech skills in the worst way for online casinos, hacking, stock manipulation and an assortment of other cyber-crimes. In the exceptionally unflattering indictment, are the four men are accused of targeting financial institutions, publishers, online stock brokers and software firms. Among some of particularly odious crimes, the alleged perps engaged in perennially classic money laundering, not to mention running an unlawful bitcoin exchange. JP Morgan Chase was one of the 15 unfortunate victims of the online schemes that generated hundreds of millions of ill-gotten dollars and stole data from more than 100 million customers. JP Morgan’s 2014 hack earned the financial institution the dubious distinction of suffering the “largest theft of customer data from a U.S. financial institution in history.” Lucky them.

And here’s where it starts to make sense…or get weird…

Image courtesy of Keattikorn/FreeDigitalPhotos.net

Image courtesy of Keattikorn/FreeDigitalPhotos.net

Now that SNL is over, Presidential candidate Donald Trump has decided to take on China today in an op-ed piece for “The Wall Street Journal” where he accuses China of “robbing Americans of billions of dollars of capital and millions of jobs.”  He made a pledge that if he is elected, one of his first actions would be to get the U.S. Treasury department to declare China as a currency manipulator. The man is on a mission to put the kibosh on Chinese piracy and counterfeiting of American goods, not to mention stealing U.S. trade secrets. Don’t be so quick to judge. Or laugh. The Donald wants to get China to the negotiating table to establish trade with them that is more, shall we say,…fair. It’s a sentiment echoed by plenty of lawmakers and domestic corporations alike, not to mention millions of Americans who fell victim to competition from Chinese manufacturing. It’s not just Trump who says that China depresses its own currency in order to make Chinese imports cheaper than domestic made products. Economists also say China’s yuan currency is undervalued with estimates ranging from 15% to 40%. It wouldn’t exactly be the first time China received that designation either. They earned that dubious distinction back in July 1994.

Soup-y sales…

Image courtesy of  vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

Campbell’s soup is embarking on a new chapter of its condensed-soup life, revamping its classic chicken soup recipe by scrapping ten out of thirty ingredients found in it. Say good-bye to the alleged migraine-inducer, monosodium glutamate, aka MSG, along with some other ingredients that are just as annoying to say and even harder to spell. Basically, nothing you’d necessarily miss. Campbell Chief Executive Denise M. Morrison explains, “We’re closing the gap between the kitchen and our plants.”  A truly touching statement indeed. But there’s a bigger reason for wanting to close that gap: money. The condensed soup company has been losing plenty of it because of shifting consumer tastes that involve the desire for ingredients that are made by mother nature, as opposed to advancements in science. In its last three quarters, Campbell’s saw a 5% drop in unit sales, besides the fact that sales peaked way back in 2012 at $16.2 billion, with sales dropping steadily ever since. If you can’t wait to test drive the new, presumably healthier version, look for the limited edition cans featuring Star Wars characters. Bon Appetit.

Banks Behaving Badly Get Slapped with Billion Dollar Fines; Target’s Earnings Bullseye; Hormel Ears on All That Spam

Busted…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The fun is over for a group of foreign exchange traders who brazenly dubbed themselves “The Cartel” and went about manipulating the price euros and dollars to score some extra cash. Now, because of them, five major banks have to shell out over $5 billion in settlement fees. Citicorp, J.P. Morgan Chase, Barclays and Royal Bank of Scotland all admitted their fiscal misdeeds that began in December of 2007. UBS pleaded guilty to one count of wire fraud and has to pay over half a billion dollars in fines. But the Swiss bank dodged some other penalties and gained conditional immunity for being the first to report on the criminal activities taking place. These forex traders would share confidential information about their clients’ orders and then plan out trades that would conveniently boost their own profits. Entrance into the group was by invitation only and one participant said at one point, “If you ain’t cheating, you ain’t trying.” Charming, huh? The resourceful plan proved quite profitable until January 2013 when investigators finally honed in on what was going on. Even though no criminal charges were brought, as per the settlement agreement, investigations into other foreign exchange issues are not going away any time soon.  And of course, plenty of traders were given their walking papers. As for the movie rights…well, I suppose you can expect to see this play out in theaters within a few years. No sense in Hollywood not profiting off this, right?

Hit it…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Seems like only yesterday when Target was rocked by a data breach that cost the retailer tens of million of dollars. Then there was the fiasco, also known as “Target’s Canadian Expansion,” that saw the retailer pulling the plug on the 133 stores located there. But those not so minor hiccups seem to be water on the fiscal bridge as Target released its latest earnings that hit their mark and saw its third straight quarter of sales growth, especially in home goods and apparel. So how good were these earnings? How does a a 52% increase in profits sound? That’s right, Target scored $635 million in net income, up from $418 million just one year ago, gaining $1.10 per share. Analysts were only predicting $1.02 per share. Clearly, those analysts were not amongst the many consumers lined up at five in the morning hoping to score some limited edition Lilly Pulitzer merchandise. Revenue was also up 2.8% which had everybody on Wall Street marveling at the fact that Target’s great earnings put Wal-Mart’s not great earnings to shame. Especially because sales at Target were up 38%, which is about double what Wal-Mart pulled in.

Talking turkey…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

Hormel, the original Spam maker, long before it was known for crowding our inboxes, just released its earnings and there’s good news. And bad news. The good news is that profit for the company increased 29% to $180.2 million with sales of $2.3 billion. The company pulled in 67 cents per share while analysts expected 62 cents per share. You may not be eating Spam, but somebody out there is. Besides, Hormel, being the largest meat processor in the United States, makes tons of other products including Roast Beef Hash and, I kid you not, Wholly Guacamole. In case you didn’t realize, Hormel’s got big business going in the refrigerated foods industry. The company also has a Jennie-O turkey store business, which brings us to the bad news: bird flu. There is a new bird-flu outbreak and if you want to sound sophisticated you can refer to it as avian influenza. Not only is this expected to take a big bite out of Hormel’s numbers, but it is also predicted that this outbreak is going to wreak havoc on the rest of the turkey industry as well. Forgive me if I just put an extremely early damper on your Thanksgiving.

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…

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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… 

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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.

Smokin’ Earnings for CVS; Yelp Satisfies Craving by Scooping Up Eat24; Israelis Go Full Force On Corporate Cyber Attacks

Butt out…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

CVS had some smokin’ good earnings even though it kicked the tobacco habit. As one of the largest pharmacies in all the land, CVS beat those fourth quarter estimates, and perhaps even shocked the tobacco industry, by earning a record $1.32 billion in profit and $1.21 a share. A year ago CVS pulled in $1.27 billion, tobacco and all. It was a big gamble, getting rid of cigarettes and its nicotine friends, since tobacco helped CVS pull in $2 billion annually. What may have contributed, however, to this quarter’s pleasing numbers was a super-combo of two very unique factors:  First, there are more insured Americans – who were previously uninsured – making up for lost times by getting all their prescriptions filled, and then some. Then there was that flu vaccine that proved less than useful against this season’s particularly nasty strain of the virus. Because the vaccine wasn’t as effective this time around, consumers were flocking to CVS to buy flu remedies causing a 13% increase in sales to $37.1 billion. Analysts only expected CVS to pull in $36 billion. So I guess, in some weird alternate universe, CVS can thank the flu. Sort of.

Can I get that to go?

Image courtesy of Iamnee/FreeDigitalPhotos.net

Image courtesy of Iamnee/FreeDigitalPhotos.net

Yelp is hoping to increase its presence in the food delivery arena by chowing down Eat24 to the very hearty price of $134 million. The two companies did some experimenting over a year ago and apparently it whet Yelp’s appetite to go full force on acquiring the online ordering engine. While Eat24 was only founded back in 2008, it already deals with 200,000 restaurants in 1,500 cities. Yelp will now compete with GrubHub –  who itself had a nifty little IPO debut back in April –  and is counting on its recent purchase to allow for a more streamlined approach to the online ordering experience. Sounds pretty tasty to me. Yelp currently has around 84,000 advertising accounts and, in case you were curious, it also has about a million restaurants listed with 135 million average monthly users dishing out their reviews, however unsavory they might be.

Bring it on…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Because Israel’s cyber-security is actually a matter of life and death for its citizens, it only make sense that it would lead the way in cyber-hacking defense. And since necessity is the mother of invention, it should come as no surprise that the latest defense mechanism to be used in the fight against corporate hacking – think Target, JPMorgan Chase, Home Depot, to name but a few –  is coming from Israel’s military. And hey, if you happen to make a few bucks on all the economic opportunities that come with protecting your peeps, then why not? Unit 8200, Israel’s elite intelligence division, has entered the cyber defense fray, launching its very own “cyber security” foundry called Team 8. With some help from investors like Google Chairman Eric Schmidt and Cisco, it’s safe to say (no pun intended, or maybe a little) that Team 8’s got some major street cred. Founded by former Unit 8200 member Nadav Zafrir, Team 8 bills itself as a “start-up for start-ups” (catchy, huh?).  No doubt Target, Home Depot and JPMorgan Chase are currently exploring their cyber-security options and licking their chops in anticipation of what Team 8 can do for them. Or not. Whatever the cost to implement the technology, it will still pale in comparison to the epic damage cyber hacks can cause. But I’m guessing if Eric Schmidt is throwing money at Team 8, then it’s probably worth it to have a go at the technology.

Doggy Doo Quarter at JPMorgan Chase; No December Retail Magic; Carnitas Crisis at Chipotle

Dog poo days…

Image courtesy of imagerymajestic/FreeDigitalPhotos.net

Image courtesy of imagerymajestic/FreeDigitalPhotos.net

Jamie Dimon, CEO of JPMorgan Chase, the biggest bank by assets, is not having a very good day, it seems. Mr. Dimon said the bank will “try to avoid stepping in dogs**t.” A highly technical term coming from the mouth of one Wall Street’s most powerful (and presumably, potty-mouthed) bankers. I guess when you have had better fiscal quarters, “stepping in dogs***” seems an adequate description. Sure the bank pulled in $1.19 per share. So yeah, it made money. There are a ton of companies who would be thrilled to pull in earnings like that. But the bank missed expectations. When you’re JPMorgan Chase and analysts expect you to pull in $1.31, well then, missing analyst expectations is more than a bit of a drag. It also suggests that its competitors will fare similarly. JPMorgan Chase took  a 6.6% hit in its quarterly profit. A $1 billion plus legal bill, courtesy of Uncle Sam’s litany of investigations, is certainly partly responsible for putting a crimp in those earnings.  “Banks are under assault,” says Mr. Dimon when asked about all those legal fees. And I’m sure you’re hurting for him. But let’s face it, that $1 billion is nothing compared to that $13 billion settlement JPMorgan Chase ponied up back in 2013 over its less than desirable role in the sub-prime mortgage crisis.

Not so merry after all…

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Image courtesy of ratch0013/FreeDigitalPhotos.net

The most wonderful time of the year was not the most wonderful, fiscally speaking. Far from it, in fact. The Commerce Department and the National Retail Federation regaled us with the lousy news that December showered us with bad tidings of a .9% drop in retail from the previous month. Sales hit $616 billion, which seems awfully jolly. It was even a 4% increase over the same period last year. But again, I reiterate – a .9% drop, month to month. Is it too late to say bah humbog? I think not. Interestingly enough, some of that drop in consumer spending was actually because not as much money was being spent on gas. Dropping oil prices made holiday driving a bit more fiscally festive, just not lucrative. Fun fact: About 10% of retail sales comes from gas purchases. But those steep discounts from retailers, as they desperately attempted to lure shoppers, actually proved to be a major downer for those retail numbers. Hence, there is no good fiscal cheer to be had. But we’re not supposed to get too worked up over this drop since it marks the first time since 2011 that holiday sales even increased by more than 4%. So carry on then.

Big problemo…

Image courtesy of KEKO64/FreeDigitalPhotos.net

Image courtesy of KEKO64/FreeDigitalPhotos.net

Chipotle has put the kibosh on its barbecued pork offerings at about 600 of its eateries after it was found that one of its major pork suppliers was not acting with integrity i.e. not complying with animal welfare standards. So uncool on so many levels.  Chipotle’s policy of serving “food with integrity” should do much to strengthen the beautiful bond between diners who appreciate the sentiment  and the restaurants that seek to uphold it . But alas, it’s not known if and how badly this carnitas crisis will affect Chipotle’s quarterly sales and profits.

Russian Cyber-vengeance?;Insta-gram-ification!; A&Fitch Logo Ditch

Cyber-score?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Now that a massive cyber-attack on JPMorgan Chase and a few other banks has been linked to Russian hackers, the question looms large: Was the hack attack in response to US imposed sanctions? Things that make you go hmmm. And while major amounts of data loss fell into the hands of these hackers, curiously enough, there hasn’t been an unusually high amount of fraudulent activity noted. At least for now. Which kind of suggests – in a really big way  – that yeah, this cyber attack was politically motivated. Incidentally, back in April, JPMorgan blocked a money payment from a Russian embassy to a US sanctioned bank.  That didn’t go over well – probably more so for JPMorgan than the Russians involved. In any case, with global conflicts on the rise, expect to see a lot more cyber-threats, kind of like the ones Iran has been throwing our way for years. Probably because they’re annoyed with US imposed economic sanctions. The attacks on banks are particularly impressive, more so than say those on Target, since banks have security and firewalls that are way more hardcore than those used in the retail sector. But banks have and will continue to step up their cyber-security precautions. JPMorgan is hoping $250 million and 1000 employees will do the trick.

I want it now!

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Look out Veruca Salt! If you want it all and want it NOW then give a big shout out to Instagram for redefining the shopping experince. Now when you see something on Instagram that you absolutely have to have, like, immediately, you don’t just get to like the item on Instagram. You don’t just get to love it the product on Instagram. You actually get to buy the darn thing too! No more brooding over a an Instagram shot while you frantically search the retailer’s products page. A new “Like2Buy” button will take you exactly where you need to go/be. Shopper ecstasy.

Abercrombie & Switch…

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Image courtesy of Simon Howden/FreeDigitalPhotos.net

Shockingly…or not, depending on whom you ask, Abercrombie & Fitch had its tenth straight quarter of declining sales. Perhaps it has to do with the fact that retailers like Forever 21, Zara and H&M are offering much trendier clothing for much less. It probably doesn’t help that A&F is helmed by a loud-mouthed CEO, who was stripped of his chairman title for making such stupid, odious comments about how his company’s clothing is intended for cool, skinny and pretty people. But clearly the cool, skinnies don’t care as they have been clearly taking their business elsewhere. The company has now decided that, in the US anyway, it’s going to shed the logo that is so prominently featured on so much of its clothing. They’re hoping that a move like that will bring in more revenue since adding more larger sizes didn’t do the trick. Go figure! Same store sales fell 6% and news of the unimpressive earnings report sent shares south by 8%.