Ralph Nader: Activist or Sexist?; $40 billion Profits? Bank on it; No Bling in Tiffany Earnings

Oh no he didn’t! 


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She may be considered dovish by investors and economists but when Janet Yellen fires back, you better watch out. Case in point: Ralph Nader, whose main claim to fame is his failed presidential bid. The would-be activist criticized Janet Yellen and the Federal Reserve back in October when he wrote an open letter that was published in The Huffington Post. Nader was trying to drive home the point that Americans haven’t been earning any interest despite their best judicious saving habits because the Fed has been keeping rates near zero. Too bad, he couldn’t just stick to that point. His criticisms were anything but constructive as he advised Chairwoman Yellen “to sit down with your Nobel Prize winning husband, economist George Akerlof, who is known to be consumer-sensitive.” Oh yes he did. He also suggested that she speak to her (male) colleague from UC Berkeley, Professor Robert Reich, to get a better handle on the Feds monetary and regulatory policies. But Janet Yellen prepared her own letter for Nader where she offered to help him “review a few basic facts.” Boom. She eloquently explained that her moves kept employment levels from rising, kept home prices from falling any lower and kept bankruptcy and foreclosures at bay. Double boom. Are you still sad he’s not in the Oval Office?



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Is there even a hint of irony when banks report making  money? I guess, to some, it’s no surprise that those hallowed financial institutions hit $40.4 billion in profits, just in the third quarter. That was over a 5% increase from last year and much of that profit and increase stems from the fact that banks didn’t have to spend as much money on lawyers like they did last year. Many financial institutions have finally settled a litany of cases and can now sit back and relax until the next wave of lawsuits comes their way  – once again affecting their profit margins. Bank loan portfolios also increased however, there’s also been an increase in high-risk lending which the offending banks might want to stop doing. Like now! Flashback to 2008, anyone? The FDIC gathered this riveting information from 6,270 firms who shared all this as part of the FDIC’s report on industry earnings. And while it’s entertainment factor has nothing on “How to Get Away With Murder”, the findings are still worth reading. For instance, 59% of banks had growth, which probably came as no shock to…anyone. The fact that 5% of the reporting banks were unprofitable might, however, come as a bit of a shock, especially to those who bank at those particular establishments. There are 203 banks who are on the FDIC’s list of banks that are in danger of failing. Alarming? Sure. But consider that in 2011 there were 888 of them on that very same list. One bank actually did fail this quarter which is also alarming. Yet, once again, nothing compared to 2009 when 2-3 banks failed in any single week. It’s all a matter of perspective, no?

Bling it off…


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Tiffany’s is dreaming of a green Christmas, no doubt hoping to erase the lackluster earnings it pulled in for its third quarter. Revenue for the luxe jeweler was less than…sparkly, dropping out at $938 million when estimates had been for $971.3 million. Profits came in at $91 million, a big jump from last year’s 3Q profit of $38.3 million. While that may seem impressive it’s not, since that big jump stems from Tiffany’s having gotten rid of some debt. Tiffany & Co. did add 70 cent per share but analysts were expecting 75 cents so that was yet one more chink in the armor. Yet it only gets worse as not only is Tiffany & Co. down 28% for the year, but it also announced one of the most dreaded things you could announce on Wall Street…that it’s reducing its full-year forecast between 5% – 10%. Yikes. Tiffany & Co. is squaring the blame on the strong dollar which has been keeping tourist spending at bay. That and also economic issues in certain regions, as if that isn’t the case…everywhere. However, as much as we’d like to, we can’t solely blame the tourists – and those vague economic issues in certain regions, because even overseas consumers aren’t buying Tiffany’s pricey bling since the dollar is strong there also and making the merchandise even more expensive than usual. Tiffany & Co. did have one bright spot…Japan. Indeed, all the way in that part of the world, the Japanese have been showing Tiffany & Co. some major fiscal love as evidenced by the 24% increase in comparable sales – a far cry from the projected 11.7% increase. Dōmo arigatōgozaimashita! (I think it means thank you in Japanese.)