The Labor of LIBOR; Coal Company Not Energized by Obama’s New EPA Policies; Disgraced Bitcoin-er Busted

Don’t bank on it…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

From the most hallowed banking institutions of UBS and Citigroup, disgraced banker Thomas Hayes will now make his way to the halls of a correctional institution, all thanks to his role in the LIBOR scandal. On trial in the UK, Hayes pleaded not guilty, although jurors felt otherwise and now gets to spend the next fourteen years in prison contemplating his misdeeds. The U.S. already charged Hayes back in 2012 for his misdeeds at UBS and the Royal Bank of Scotland and a number of banks already had to cough up $9 billion in penalties over their involvement in rigging the benchmarks. Hayes was found guilty on all 8 counts of conspiracy to defraud. And it’s not everyday a trader gets convicted for rigging rates on the London Interbank Offered Rates. In fact, Hayes has the dubious distinction of becoming the first person to be convicted in the scandal, which makes sense, since he was apparently the ringleader for more than a dozen other brokers and traders who participated in messing with global rates for mortgages, loans and credit cards just so that they could profit. Those misdeeds affected some $350 trillion in global financial markets. Including ours. Talk about rude.

So un-coal…

Image courtesy of dan/FreeDigitalPhotos.net

Image courtesy of dan/FreeDigitalPhotos.net

Battered and broken is just one way to describe the coal industry as President Obama just announced the latest EPA policies which are supposedly going to reduce greenhouse gas emissions 30% by 2030. And of course that is splendid news. Just not for Alpha Natural Resources who made its own announcement today: bankruptcy. The natural gas boom combined with the new EPA rules have dealt quite the blow to the second biggest coal producer. While the company has over $10 billion in assets with around 8,000 employees, it also needs to ditch some $3.3 billion in debt. The once powerful coal supplier had to close more than 80 mines since 2011 as the shale boom began to take effect. And who can blame shale? After all, it is a cheaper, less polluting energy source.

Bit-fraud…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Mark Karpeles, the disgraced head of collapsed Tokyo bitcoin exchange, Mt. Gox, has, un-shockingly, been arrested in Japan on suspicion of (gasp) fraud. Who would have thought. Apparently, Karpeles falsified documents and manipulated the computer system over thirty times in an effort to fatten up his bank account by about a million bucks. If the 30 year old Karpeles is found guilty, he might just become pen pals (no pen-pun intended) with Thomas Hayes, except the French-born Karpeles would be idling his incarcerated says in Japan. If you recall, 850,000 bit coins – equal to about $480 million at the time –  went missing under Karpeles’ watch. But wouldn’t ya know it, 200,000 bit coins were subsequently recovered by Karpeles, who must have remembered where he had apparently misplaced them. As for the remaining missing cyber-currency, well, Karpeles conveniently blames the theft on a “bug” from a cyber-attack. You don’t say…

Bitcoin Makes its Stateside Debut; Bad Day for Barbie; Fruity Pebbles Gets Some Company

It’s a bit time…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

The first US regulated bitcoin exchange has made its US virtual debut. San Francisco-based Coinbase raised $106 million with some of that backing coming from Andreessen Horowitz and even the New York Stock Exchange. Which must mean that this whole crypto-currency thing is super legit, despite the fact that there is no government backed regulation for it, nor is it backed by the FDIC. But no worries as Coinbase, which already has 1.9 million users, 2.2 million accounts and 40,000 companies signed up with it, says it is insured against hacking, internal theft and accidental loss.  How very forward-thinking. Especially considering that earlier this month, European bitcoin exchange, Bitstamp, suffered a hack attack that cost it about $5.2 million. Of course, nobody will forget how Bitcoin exchange Mt. Gox was forced to call it quits after getting brutally hacked…to bits. Coinbase is currently allowed to conduct business in 25 states and makes its money by taking 0.25% of Bitcoin transactions. How very industrious. But the exchange doesn’t take its cut for the first two months after opening an account because Coinbase very thoughtfully felt this would be a good gimmick to attract more business. Hey, sign me up. Now if I could just get myself some Bitcoins…

Just not that into you anymore…

Image courtesy of ratch0013/FreeDigitalPhotos.net

Image courtesy of ratch0013/FreeDigitalPhotos.net

Big changes are taking place at Mattel, the toy company famous for the ever-evolving “Barbie Doll.” Barbie is, in part anyways, the reason for the major power shift at Mattel. It seems girls are just not that into her anymore. Sales of the doll worldwide have been falling for the past few years with this last quarter, which included the holiday shopping season, ending on a particularly dismal note. Barbie, her friends and that malleable Malibu Dream House just can’t compete anymore with Disney’s Frozen dolls. Barbie also can’t seem to compete with electronic devices (and really, what can?). Mattel earned close to $150 million and $0.44 a share, which seems decent, unless of course that is a 60% drop from what the company pulled in last year. Mattel also said that because the dollar was so strong against other currencies, it affected sales. Except the dollar’s strength against other currencies didn’t seem to affect sales of the aforementioned Disney Frozen dolls and electronic devices.  Hence, Bryan Stockton, who up until this morning was Mattel’s Chairman and CEO, will be replaced by Christopher Sinclair , who will become interim chairman and CEO.

Man that’s a lot of cereal…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Post Holdings Inc., which is best known, in my most humble opinion anyways, for Fruity and Cocoa Pebbles, has decided to pick up MOM Brands to the crunchy tune of $1.15 billion. MOM Brands is best known, in my most humble opinion for Malt-O-Meal hot cereal – and perhaps, even better known for its seventies/eighties era commercial with that kid who asks for some more Malt-O-Meal, which was supposed to send our mothers into a tizzy to run out and buy boxes of the low-in-sugar breakfast (it should be duly noted that I didn’t fall for it). I wonder what became of him. In any case, MOM Brands is also known for ripping off other cereals and selling them for less, or as they say in the land of marketing, value brands. Laugh all you want, but those value brands brought in revenue of $760 million and $120 million in profit. This new crunchy company combo will take an 18% bite out of the market share for cereal, with General Mills and Kellogg’s still taking 30% of market share.

Coach Goes Shoe Shopping; Bitcoin of a Breach;

Well-heeled…

Image courtesy of biosphere/FreeDigitalPhotos.net

Image courtesy of biosphere/FreeDigitalPhotos.net

Luxury handbag and accessories maker Coach (COH) went shoe company shopping to go with all its merchandise and decided to settle on $530 million worth of Stuart Weitzman shoes. Coach announced this morning that it’s buying luxury shoe company Stuart Weitzman, which was/is actually owned by private equity firm Sycamore Partners LLC, who is getting $530 million in cash for the company. But if all goes well, in that Stuart Weitzman hits its revenue goals in the next three years, Sycamore stands to gain another $44 million – a win/win for all. In 2013, the footwear maker pulled in $270 million while Coach has been undergoing some growing pains in the last couple years as it struggles to compete with trendy rivals Michael Kors and Kate Spade. Shares of Coach rose $0.46 in pre-market trading which can only mean one thing – Wall Street is totally into the purchase.

Oops! It happened again…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Bitstamp, Europe’s top bitcoin exchange had to put the kibosh on services after 19,000 bitcoins went missing. In case you were wondering…which I know you were, that’s over $5 million. No withdrawals and no deposits (which probably won’t be an issue) can be made with Bitstamp as of now, but it has reassured its customers that “their balances held prior will not be affected and will be honored in full.” Awww. that’s sweet. How very responsible and conscientious. Sort of. Apparently the exchange’s “operational wallets were compromised” which sounds like something out of a movie. The rest of the exchange’s bitcoin stash is kept in “cold storage.” And while that just sounds like the secret compartment in the back of your mother’s freezer, it’s actually a term to describe computers that aren’t connected to the internet but hold information. Like my Commodore 64 I had when I was eight.  The breach doesn’t quite have the stench of epic failure of the Mt. Gox breach collapse almost a year ago, which saw $650 million worth of the crypto-currency mysteriously disappear along with the collapse of the exchange itself.  However, the breach is still alarming enough to shake up the unregulated bitcoin universe. Bitcoins are, by the way trading in the $270 range, which is cute and all but nothing like its $1,240 peak, pre-Mt. Gox collapse, of course.

Stamp’d out…

Image courtesy of anankkml/FreeDigitalPhotos.net

Image courtesy of anankkml/FreeDigitalPhotos.net

The United States Postal Service had its best fiscal quarter in seven years. In fact, this quarter was up 18% over the same time last year.  A very impressive feat considering that volume for mail is down 26% in the last ten years. But even with that 18% increase the USPS continues to operate at a loss. Those pieces of paper to which you affix stickers with a monetary value on it – you do realize I am talking about stamped envelopes, don’t you? – have gone down in volume by a third. Even though the price for stamps kept going up and up and up… the postal service still saw $17 billion in losses in the last decade. To help recoup some of those billions, the postal service consolidated over 300 processing facilities, cut 212,000 jobs and nixed 23,000 routes. And now expect snail mail to get even snail-ier with the average delivery time going up from 1.8 days to 2.1 days.

 

Drug Company Ex-pat? Suspicious Packages and License to Bitcoin

Isn’t that a tax relief?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Chicago-bsed drug giant AbbVie, maker of the very popular Humira,  is buying fellow company Shire Pharmaceuticals for close to $55 billion. Wall Street seems to be happy about the strategically financial move. Too bad the Obama administration and some members of Congress don’t share the joy. And why whouldn’ they? Tax inversion my friends.  Basically, it’s shifting the tax residence of the company abroad, in this case the UK. AbbVie will now have a much more manageable tax rate of 13% instead of an onerous 22% which will free up the company to do all sorts of new and exciting things, although its headquarters will still remain in Chicago. It’s the largest inversion deal. Ever. But Treasury Secretary Jacob Lew is particularly miffed and said, “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.” However, others argue the US government ought to make the tax laws more hospitable to these big companies.

Do I need to sign for that?

Image courtesy of posterize/FreeDigitalPhotos.net

Image courtesy of posterize/FreeDigitalPhotos.net

FedEx isn’t having the best day. It probably has something to with that indictment on drug-trafficking charges. Hard to believe (or not) but the shipping company was indicted by a San Francisco grand jury for conspiracy to deliver prescription drugs for illegal internet pharamcies. Whoops. The indictment also says that FedEx knew about this for a decade and even took precautions to protect itself. To be fair, FedEx says it asked the US government on several occasions for a list of the illegal pharmacies but the government apparently never got around to it. So there. However, the DEA and FDA said FedEx was repeatedly warned. Couriers in Kentucky and Tennesee, among other places, feared for their lives as packages were delivered to empty parking lots, vacant homes and of course the occasional school. Because, after all, what alleged crime would be complete without involving the use of a school? FedEx delivers over 10 million packages a year and pulled in $44.3 billion in revenue for 2013. FedEx was charged with 15 counts of conspiracy but no officers have been charged. The company could face fines of over $800 million.

Bitcoin to go mainstream?

Image courtesy of cuteimage/FreeDigitalPhotos.net

Image courtesy of cuteimage/FreeDigitalPhotos.net

The New York  Department of Financial Services is showing some bitcoin love by attempting to create a license for the crypto-currency. Sounds too good to be true, huh? But really it’s an attempt to make the virtual currency more mainstream. People engaged in criminal and other questionable activities tend to like bitcoin for its anonymous aspect. Who wouldn’t. But this new system might just make those shady transactions a little bit more challenging to complete. Policies and procedures would also be established to assist with the inenvitable consumer complaint and also to outline what happens in the case of a problem ala Mt. Gox and its hacker issue that caused the bitcoin trading exchange to go bust. Ben Lawsky, Superintendant of Financial Services said, “We have sought to strike an appropriate balance that helps protect consumers and root out illegal activity – without stifling beneficial innovation.” Sounds fair.

 

Tiffany Is Not Feeling Blinged, Lost and Found and A Shot With Your Espresso?

Swatch out!

Image courtesy of Boykung/FreeDigitalPhotos.net

Image courtesy of Boykung/FreeDigitalPhotos.net

Tiffany & Co. and their little blue boxes suffered a major blow to their bling today following a spectacular third quarter. Their pretty yellow diamonds and $1.3 billion in revenue weren’t enough to outshine the losses they suffered this quarter. Because what began as a $200 million profit quickly turned to a $100 million loss owing to a gigantic settlement with Swatch. Tiffany & Co. CEO Michael Kowalski said, “We are proud of our performance this past year. Sales and operating earnings (excluding the arbitration-related charge) rose to record levels.” Uh-huh. Back in 2007, the two companies started a joint venture that went south four years after. Swatch sued. Tiffany & Co. counter-sued. They went for arbitration. $473 million later, Tiffany & Co. has to pony up to Swatch. Talk about killing time.

Mt. Gox marks the spot?

Image courtesy of stoonn/FreeDigitalPhotos.net

Image courtesy of stoonn/FreeDigitalPhotos.net

Don’t you just love it when you find an old wallet and there’s still money in it. The same thing happened with Mt. Gox recently and now the former bitcoin exchange is slightly less bankrupt today. 200,000 bitcoins were (not so) mysteriously “discovered” in disused electronic wallets. The coins, which were originally thought to be stolen are worth approximately $120 million.  Now if they could just figure out where those other 650,000 coins went…

Barista or bartender? You decide…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.netH

If you already love Starbucks now, you’re about to love it a whole lot more. Come for the coffee stay for the alcohol. The coffee seller is gearing up with a new concept called “Starbucks Evenings” where they will be offering a variety of alcoholic beverages and gourmet food to complement them. Spokesperson Lisa Passé explained, “The concept is a natural progression for Starbucks Corporation as we seek to create a new occasion for customers to gather, relax and connect with each other in the evenings.” That just might be the case but this new concept also has to do with the fact that Starbucks is aiming to hit the $100 billion mark in market value and offering up alcohol is sure to do the trick. Whatever the motive, I, for one, can’t wait.

Bit Who? Is Mother Nature Losing Her Cool and @GSElevator Pushed the Wrong Button

Bit of confusion…

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The founder of Bitcoin has been revealed. Well…sort of…um…okay so nobody’s a hundred percent sure on that one. Here’s what is known: The virtual currency was created in 2009 – and NOT – it should be duly noted – by the Winklevoss twins. However, the creator remains a mystery (cue the eerie music).  Or does he (or she? or it?). Many believe(d) that the creator went/goes by the name Satoshi Nakamoto. A man by that name has been found in California and following a wild car chase in Los Angeles (duh…where else?) it’s still unclear who the founder is. Nor does it change the fact that the Winklevoss twins used bitcoins to pay for their galactic voyage or that bitcoin exchange Mt. Gox went buh-bye.

Take that Mother Nature…

Image courtesy of samarttiw/FreeDigitalPhotos.net

Image courtesy of samarttiw/FreeDigitalPhotos.net

In case you were wondering why Wall Street was putting out some record highs today (and it’s okay if you weren’t  – that’s why we’re here), it’s because 175,000 new jobs were added to the work force beating analysts’ expectations. Not only is that a positive sign that the economy is starting to regain some of its mojo, but it’s also seen as big kick in the butt to mother nature who has been toying so rudely with our economic emotions (bet you didn’t know you had those). But don’t break out the champagne just yet. Unemployment still climbed up .1% to 6.7% when that number should have stayed put like a good little estimate.

The final chapter?

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

And so the individual behind the twitter account @GSElevator is not @ Simon & Schuster anymore either. Straight To Hell, the book John Lefevre wrote based on things overheard in the hallowed elevators at Goldman Sachs has been canceled. The problem with the story is that Lefevre is not only NOT an employee of Goldman Sachs, but he resides in Texas which makes it kind of hard to overhear conversations in elevators in New York. But just so we’re clear, he did interview with Goldman Sachs, albeit, many many years ago.

Try and Top This List, Buffet Not A Bit of A Fan and Shacked Out

Can I please get on the list?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Forbes came out with its annual list of the world’s wealthiest people and it’s official:  None of my Facebook friends are on it.  Oh well.  But you can call Bill Gates the comeback billionaire because after four years he has returned to the top of this list beating out Mexican telecom mogul Carlos Slim Helu by a paltry $4 billion. Purchased anything from Zara lately? You must have because you helped Amancio Ortega of this giant clothing company fit  into the number three spot. Warren Buffet comes in fourth while Facebook’s Mark Zuckerberg comes in at the number 21 spot.

Warren Buffet biting at bitcoin…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s official: Warren Buffet is not a fan of Bitcoin calling it “…a Buck Rogers kind of thing.” Ouch. The Oracle of Omaha said “I wouldn’t be surprised if it’s not around in 10 or 20 years.”  Indeed,  Forbes fourth wealthiest man – who knows a thing or two – has shunned the virtual currency  – with no regulation or central bank because “it does not meet the test of currency.”   These comments came following the collapse of Mt. Gox, the now bankrupt and defunct Tokyo based bitcoin exchange.

Radio days…

Image courtesy of nirots/FreeDigitalPhotos.net

Image courtesy of nirots/FreeDigitalPhotos.net

Feeling nostalgic for Radio Shack?  If that’s the case, then you might want to hightail it over to one quickly because there’s a good chance that if you wait, it might not be there anymore.  The Fort Worth, Texas based electronics retailer is getting set to shutter 1100 shacks after posting its eighth consecutive quarter of losses.  CEO Joe Magnacca blamed the drop in sales on a slew of reasons including people not buying enough and bigger discounts from rivals.  Yes that’s right – blame it those gosh darn discounts from your competitors.