Bernie’s Big Ticket Plans; Trump: Print Me the Money!; A Glazing Good Deal for Krispy Kreme

 

Hey big spender…

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Studies were done on Bernie Sanders’ spending plan and the results just might churn your stomach, no matter how you feel about the potential presidential candidate. The non-partisan Tax Policy Center and the also non-partisan Urban Institute’s Health Policy Center explain how Bernie’s plan could harm the economy by dangerously increasing the federal deficit and the national debt – an ugly combo. His plan involves raising taxes across all income levels with nobody getting a pass – which almost sounds fair. His plan literally requires trillions of dollars in tax increases but hey, it includes FREE universal healthcare, expanded social security and FREE college tuition. Don’t even pay attention to the strain on economic growth under this plan. Because there won’t be any growth. Just cold hard strain. According to the study, Sanders’ domestic agenda plan would add $18 trillion to the national debt over ten years. That’s not including an additional $3 trillion in interest payments. And that number is just from Sanders’ lofty goal of providing free healthcare for all. The study also mentions a $32 trillion increase in federal medical spending over ten years plus another $3 trillion added for additional long-term care costs. But hey, it’s worth it right? Just maybe not for you. Or anyone you’ve ever known. At least Bernie Sanders would do away with all those annoying premiums, co-pays and co-insurance costs. Those in the lowest income bracket would end up paying, on average, $200 more in taxes. But that additional $200 taxes comes with $10,000 in benefits. So that’s a win. Sort of. For those who whose incomes fall more in the middle, they’ll find their tax bill going up, on average, by about $4,500. Seems awfully steep but hey, that bigger tax bill will get those middle income earners $13,000 more in benefits from the U.S. governments. Not that they necessarily need $13,000 more in government benefits, but whatever. With low and moderate income levels gaining the most benefits, it will leave the lucky top 5% of earners paying, on average $130,000 more in taxes. But if you’re in the top 5%, well then consider yourself fortunate. Or not. Feeling the Bern yet? Your additional $130,000 gets you not much of anything more. Well there is that additional $19,000 in benefits but if that’s not enough then too bad. Bernie Sanders administration doesn’t care about you. Sanders’ campaign officials did release their own cost estimates which, of course, weren’t nearly as traumatizing as those released by the non-partisan outlets. So whose math are you going to trust?

Poetry in motion…

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More gems escaped from the mouth of presumptive Republican presidential nominee, Donald Trump. This time he said that the U.S. won’t ever have to default on its loans because it can just print the money. This latest pearl was imparted after he was asked to clearly stipulate his strategy on how to handle the national debt. He insists he never said that he thinks the US should default and renegotiate with its creditors. He also said that he would do his super duper best to try and NOT touch social security – so gallant of him. The Donald also called himself the “King of Debt” because he loves debt. I mean, how could you not? He went on to say ,”I understand debt better than probably anybody. I know how to deal with debt very well. I love debt.” I could not have made up that quote if I tried. Trump wants us to know that he would like to take advantage of a drop in value of U.S. treasury debt and buy it back with better terms. That’s if and only the rates go up and those bonds can be purchased for a discount. It’s a legit tactic but the problem is it’s coming from the self-proclaimed “King of Debt.”

Glazed and not confused…

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Krispy Kreme’s Wall Street days are about to be history as the company, famous for its delectable glazed doughnuts, is going private again after being acquired by German company JAB to the tune of $1.35 billion. JAB is getting the yummy company for $21 per share, a nearly 25% premium over Friday’s closing stock price of $16.86. The company, which went public in 2000, boasts over 1,100 stores worldwide. Interestingly enough, Krispy Kreme has more stores outside the US, over 800 actually. Back in August of 2003, shares of the company hit a high of $49.37, but alas, those days are long gone. A majority of Krispy Kreme stores are operated by franchises and plenty of the international franchises have been hit with weaker sales, in part, because of the strong dollar. Krispy Kreme, however, will fit in nicely at JAB, which already acquired Peet’s Coffee & Tea and Caribou Coffee. Wall Street seemed sweet on the acquisition as it sent shares up today over 24% to almost $21 a share.

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Staple’D: FTC Wants to Quash Merger; Keurig Coffee Wants Privacy; Chipotle Earnings Not Coming Up Fresh

Deja vu…

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Nothing like a pesky lawsuit to put a crimp in your $6.3 billion proposed takeover plans. Which is exactly what happened to Staples Inc. when the FTC voted unanimously, in a 4-0 vote, to try and put the kibosh on the office supply retailer’s’ attempted takeover of Office Depot by filing a suit to block the deal. The deal, which was expected to generate $39 billion in revenue, has the FTC concerned that the merger would create just one mammoth national office supply retailer that would yield too much power to raise prices, whether it be private consumers or commercial entities, many of which have big vendor contracts. This is not the first time that Staples has tried to pick up Office Depot. Back in 1997, the company attempted to do the same thing but was blocked from doing so even back then. Because the office supply marketplace has changed so much, given the availability of office supplies via e-commerce, Staples was certain this time there would be no issue. Besides, in 2012 the FTC approved a merger between Office Depot and Office Max merged on the basis that there was enough competition from Amazon, Wal-Mart and other outfits that allowed for a healthy amount of competition. Instead, of a merger today, however,  shares of Staples Inc. fell 14%, the most in 18 months, while shares of Office Depot fell 18% on news of the FTC lawsuit.

Perky…

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Big news in the single-serve coffee pod marketplace – yeah that’s a real thing: Keuring Green Mountain Inc. is going private to the tune of $13.9 billion and getting $92 per share. For real. In fact, that price is a 78% premium over Friday’s closing price. For real again. So what would make a company like that want to go private? Well it was an offer the coffee maker couldn’t refuse. That’s part of it anyway. The company posted some disappointing numbers and is down 60% just this year. Besides the ever-increasing competition in the single-serve pod market, Keuring also struck out with its KOLD product. Enter German company JAB who wants to be the numero uno North American coffee purveyor. And why not? It’s a $6.1 billion industry there alone and makes $15 billion globally. Did I mention that North America drinks up a big 40% of that global market share? JAB already picked up Peet’s Coffee and Tea and Caribou Coffee as it attempts to compete with Nestle. So far, JAB has the upper hand. By a lot. Indeed, news of the deal sent Keurig stock up 74%, which is especially good for Coca Cola since it owns 25.87 million shares, a 17.4% stake that adds up to about $2.4 billion. That’s even more good news for Coke since that’s how much it can expect to get from JAB for its shares. Of course, with any major deal, it is subject to shareholder approval. But assuming the deal’s approved, it will likely close by April.

No más

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Even millenials can’t help Chipotle with this one. The fresh-food restaurant chain saw its shares hit its lowest point in eighteen months, all the way down to $515 per share. Never mind that the stock is currently trading at around $543 a share. But I digress. Much of that slide can be blamed on the e. coli outbreak that had the chain closing a number of its locations since most of the 52 people who picked up the virus said they had eaten at Chipotle. The company is expecting a drop in same store sales between 8% – 11% for its fourth quarter. Chipotle also now expects earnings per share from $2.45 – $2.88. That’s especially brutal when you consider that analysts were expecting about $4.06 to be added, not to mention the fact that at this time last year the company pulled in $3.85 per share. The stock has been on a downward slide since news of the e. coli outbreak was first reported back in October. The stock has fallen 22% since then and is down 18% for the year.

Bill Gates’ Unappetizing New Venture; Have I Got a Jobs Report For You; Keurig Scores Dr. Pepper Snapple Exclusive

I’ll poop to that…

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Image courtesy of artur84/FreeDigitalPhotos.net

Bill Gates latest philanthropic endeavor is nothing short of crappy as the Microsoft founder plans to take human waste and turn it into…potable drinking water. And electricity too. But clearly it’s the water part that’s got people scrambling for their bottled water. With the help of the Omniprocessor, conveniently designed and built by Janicki Bioenergy, the Bill and Melinda Gates Foundation wants to help prevent the spread of diseases caused by water contamination and improve the quality of life in many underdeveloped countries. Oh the irony. With Senegal getting first dibs on a plant, the process can take waste from 100,000 people and convert it into 86,000 liters of potable water and a net 250 kilowatts of electricity. Be sure to see the pic of Bill Gates drinking a glass of the poop water. “Having studied the engineering behind it, I would happily drink it every day. It’s that safe.” That’s just…lovely.

Good Economic Synes…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

ADP graciously informs us today that 241,000 jobs were created in the private sector in December, smashing conservative estimates of 235,000 and making it the fourth straight month of job growth over 200,000. And while unemployment is expected to stubbornly stay at its 5.8% perch, but perhaps dip ever so slightly to 5.7%, signs still point to an expanding economy and a positive report from the Labor Department, expected Friday. But what’s even better, is that for the year, the private sector added more than 2.5 million jobs. Would it be overly optimistic to hope that the economy might return to full employment next year? Hmmm.

I’m a pepper?

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Image courtesy of tiverylucky/FreeDigitalPhotos.net

Keurig Green Mountain just scored a sweet bubbly deal with Dr. Pepper Snapple to make individual capsules that will be used on Keurig’s cold beverage system, due out in the fall. The deal makes Keurig Green Mountain the exclusive provider in the US and Canada. Dr. Pepper Snapple, which also makes Sunkist and Hawaiian Punch, has been struggling along with its rival/competition soda makers to stay relevant in a market that is shifting away from sodas…and in some cases apparently, towards poop water. In fact, volume sales of carbonated soft drinks fell 3% in 2013. But for Keurig, based in Waterbury, Vermont, this was clearly seen as a positive move by Wall Street as shares of the company bubbled up more than 3% in pre-market trading.

It’s Worth How Much?! Coca Cola Gets Energized and Not Banking on Terrorism

Buy high, sell higher…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

They don’t call him the Oracle of Omaha for nothing. Shares of Berkshire Hathaway, helmed by the prescient Warren Buffet, hit a new, very high, milestone. For the first time shares of the most expensive stock trading in New York hit and even surpassed the $200,000 mark going up to $201,720 a share. Yep. For a couple hundred grand you too can own a single share of Berkshire Hathaway. Mr. Buffet feels that by not splitting the stock, as most companies would have done by now, Berkshire Hathaway gets a better class of investor. By better, he means investors who are more focused on long-term results, rather than other investors who make emotional trades. My emotions would be very happy to own a few of those shares. If you were looking for a more wallet-friendly option, you could always buy B class shares of Berkshire Hathaway which trade at a little over $130.  Berkshire Hathaway’s earnings, by the way, pulled in $6.4 billion in profits. Why, that’s almost a $3,900 gain per share – for the A class shares.

Enjoy a Coke…with a Monster Beverage

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Image courtesy of Naypong/FreeDigitalPhotos.net

Coca Cola (KO:US) just got a bit more monstrous now that it picked up an almost 17% stake in Monster Beverage (MNST:US) for over $2 billion. It’s all part of Coca Cola’s grand plan to take equity stakes in companies that have new emerging promising brands. In May, Coca Cola did a similar move with Keurig Green Mountain Inc. Shares of Monster Beverage went up 26% to around $90 a share. Not quite Warren Buffet territory but still not too shabby.

Would you like that in small bills?

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Image courtesy of digitalart/FreeDigitalPhotos.net

Jordan-based Arab Bank is not sitting pretty in court as it stands accused of being one of the official banking institutions for terrorism. Not exactly the kind of clientele you want associated with your bank. A lawyer for a group of American terror victims said the bank funneled lots of money ear-marked under a file labeled “martyr operations” for certain designees related to terrorists and suicide bombers. These files contained a list of people who were slated to receive $5,300 a pop (definitely no pun intended). Lawyers for the bank, however, argue that the bank followed all regulations and none of the names listed were flagged by any international law enforcement organization. That probably had more to do with the fact the names linked to accounts were (intentionally?) misspelled. The transactions took place at branches in the West Bank and Gaza and the list came from the Saudi Committee for Supporting Al Quds Intifada. Arab Bank now holds the dubious distinction of being the first bank on trial under Anti-Terrorism Act.