Supreme Smackdown to Apple; Wall Street Bonuses Shrink, But I’d Still Take One; Amazon Store: The San Diego Sequel

Un-appealing…

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Not everyone has the ability to say no to one of the world’s most valuable companies. But the Supreme Court did just that to Apple when it graciously told its lawyers that it was not interested in hearing its appeal on an earlier ruling from June of 2015. Now, the iPad maker has to pony up some $450 million for its role in conspiring with publishers to increase book prices that apparently violated Federal antitrust laws. Apple feels that this ruling will “chill innovation and risk taking.” Maybe. But consumers still didn’t appreciate the way that Apple caused e-book prices to go from $9.99 to $12.99 and $14.99. Except Apple didn’t act alone, bringing in Hachette Book Group, Harper Collins, Penguin, Simon & Schuster and MacMillan to help fleece e-readers everywhere. Basically, any publisher from whom you’ve ever read a book helped facilitate this antirust breach. Apple wanted to make sure the iPad got a nice little boost when it made its grand debut in 2010. So publishers got to set the price they wanted for e-books on Apple devices and in return Apple would enjoy a 30% cut of sales. This, my friend, is the nefarious practice known as “agency pricing.” Publsihers played along because they didn’t like that the price of e-books on Amazon was going down and this method provided a convenient way to recoup that cash. The publishers started charging Amazon the same prices that it charged Apple, forcing Amazon to raise its prices also. Apple will pay $400 million to e-book customers in the form of credits, in addition to $20 million to the thirty states that sued. Of course, that doesn’t include the $30 million in legal fees that Apple’s lawyers get to collect or the changes that Apple is being forced to make to its business practices.

Whose your daddy…

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New York State Comptroller Thomas DiNapoli released some pricey data for one of New York’s top industries: Securities. Not that this will have you shedding tears, but the average Wall Street bonus fell 9% for 2015, checking in at $146,200. And while most people don’t come close to making that kind of cash in a year, the average Wall Street-er scored that, in addition to his or her salary. While that salary might seem high, consider that in 2006, the average Wall Street bonus was $191,360. And even though a whopping $25 billion worth of bonuses were awarded in 2015, it was 6% less than the previous year, as profit from broker-dealer operations dropped $1.7 billion to $14.3 billion. Profits for the six biggest banks hit $93 billion, by the way, which is more than 35% higher than the previous year. If you can believe it, that figure is still not as high as it should be and signals that the economy is still having a hard time bouncing back from 2008’s fiscal crisis. If you’re thinking about a career in securities, that might not be such a bad idea as the average Wall Street salary rose 14% in 2015 to $404,800. Except that prospects for 2016 look a bit grim and are actually expected to drop. There are approximately 172,400 people employed in the securities industry and 4,500 jobs were added in 2015. That figure, however, is still 8% less than it was pre-2008 fiscal crisis. By the way, these figures, we are warned, are not accurate estimates since they don’t include stock options and other forms of deferred compensation. The numbers also don’t include those for securities employees outside of New York City.

Isn’t it ironic…

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Mega e-commerce site, Amazon, arguably best known for being the largest online marketplace in the U.S. – not to mention some really great television –  is poised to open its second brick-and-mortar store where it will sell books, naturally, in addition to its own comprehensive line of tablets and devices. In fact, there will be nothing in the store that you wouldn’t be able to purchase on the company’s website. Rumors of the brick-and-mortar first surfaced when a big sign went up during the summer over the vacant space in a swanky San Diego mall. Then, last month, job postings for the 7,500 square foot store began appearing. Amazon’s store will be in good company as Tesla and Apple will be its mall neighbors. Meanwhile, the revenue expected from setting up an actual store isn’t expected to leave any meaningful dent in the company’s earnings. I guess it’s just a cute gesture for people who prefer to leave their homes to enjoy an actual physical shopping experience.

It’s All About the Bonus; Colorado’s State Budget Gone to Pot; Vera Bradley’s Headed Overseas

Fat cats…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Good news, that is, if you work on Wall Street. According to new data from New York State Comptroller Thomas DiNapoli, bonuses are up 3% in broker-dealer firms. Those bonuses managed to increase even though profits at most Wall Street firms took major hits. Together, all those lucky bonus takers took home (or are expected to take home) a very grand total of $28.5 billion, with the average earner scoring $172,860. They might have even taken home more but all those legal settlements stemming from the firms’ pernicious little roles in the 2008 fiscal crisis managed to put a crimp in profits. The securities industry also added 2,300 jobs, presumably ones that come with bonuses too. Has your jaw hit the floor yet?  Even all those pesky new regulatory changes couldn’t stop those bonuses from rising. So why exactly might this information make the New York State comptroller so giddy? Because Wall Street accounts for 19% of New York State’s revenue and when the tide is high, all boats rise.

Speaking of bonuses…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

The amount of money that keeps pouring into Colorado’s state budget from marijuana sales just keeps getting…higher. No matter how you feel about legalizing recreational marijuana, there’s no denying its fiscal benefits. Sales of cannabis have helped the state rake in close to $9 million…just in the month of January. That was a whopping 163% increase over January of 2014. First, there is a a fee imposed on businesses that sell marijuana. All those businesses paid about $1 million in fees just for the privilege of selling the stuff. In sales tax receipts alone the state took in $3.5 million on a 10% sales tax for recreational pot. Colorado also puts a 15% excise tax on the stuff with funds from that going toward school improvement projects. There is a joke in there somewhere but I’ll stay away from it.

Just not that into you…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Handbag and accessories maker Vera Bradley took a nasty 16% hit on its stock today as it announced its abysmal fourth quarter earnings. Revenue fell 3% from a year ago to $157 million. But its that 13% drop in its net income, falling to $17.3 million, that is leaving a nasty mark. Blaming it on the fact that Vera Bradley can’t seem to attract new customers, CEO Robert Wallstrom said “overall business trends remain difficult.” Well, for Vera Bradley, anyway.  Not only is the company closing up shop on its New Haven, Indiana plant where 250 people will be left without a job, but Vera Bradley will now take the necessarily evil step of manufacturing its products overseas, since it’s apparently 90% cheaper to do so.  The company, started in 1982, went public in 2010 at $16 a share. After hitting a high of close to $50, back in 2011, the stock has been taking a vicious little dive, hitting all-time lows. All this comes two weeks after Vera Bradley named Olympic gold medalist Meryl Davis as its celebrity ambassador.

Wall Street: Ugh! Rate Hikes, Reading Oprah Tea Leaves and Doggone Expensive

Not in our best interest?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Anxiously gnawing on its finely manicured fingernails, Wall Street not very patiently waited to see just how close newly appointed Fed chairwoman Janet Yellen would stick to the policies of her predecessor and mentor Ben Bernanke. Much to the chagrin of Wall Street, her remarks hinted at the possibility that she plans to raise interest rates sooner than expected. If you think you’re the only one who doesn’t appreciate this news, you’re not alone. Wall Street didn’t like the news either and let Ms. Yellen know it by taking a tumble. So there!

Ugh! Is there anything she can’t do?

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Reigning queen of media Oprah Winfrey has a new gig. She might not be the new barista at your local Starbucks but you sure can expect her presence behind the counter. At their annual shareholders meeting, Starbucks CEO Howard Schultz sat with the iconic talk show host sipping tea as they unveiled Teavana Oprah Chai tea. Tea is a $90 billion market. For every Oprah Winfrey tea product, sold a donation will be made to the youth education charities. That can turn into a very large sum very quickly as tea is only second to water in terms of consumption. Winfrey said,”Starbucks is about nurturing the human spirit.” You can pay for that nurturing via the handy dandy Starbucks app (and tip your barista too).

You paid how much for that doggie in the window?!

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Look out Westminster Kennel Club, there’s a new mastiff in town, but not just any mastiff. A Tibetan Mastiff  just sold in China for close to $2 million. The breeder said the dog has lion’s blood. Whether or not that’s even remotely possible, the 200 pound long haired canine will now become the companion to an obviously very successful property developer. Tibetan mastiffs are considered a status symbol among China’s elite and are apparently compared to their “nationally treasured pandas.” Except, I’m guessing Tibetan mastiffs prefer steak to bamboo. Well for that price, I hope the dog is house-trained.

KING Crush, New $tarbuck$ App and Wall Street’s On A High Note

I know who you have a crush on…

Image courtesy of idea go/FreeDigitalPhotos.net

Image courtesy of idea go/FreeDigitalPhotos.net

Attention Candy Crush fans – and well…who isn’t?  The maker of the wildly addictive game is getting set to roll out 22 million shares for its initial public offering.  Got about $24.00 to spare? That just might land you a single share of the stock. While Candy Crush isn’t the only game King makes (I, myself am a fan of their game, Pet Rescue), the saga has been a major driver for this company pulling in a $568 million profit. Shares, if you are fortunate enough to pick up a few, will trade on the New York Stock Exchange under the ticker symbol KING. And it’s good to be just that.

Buzz tipping…

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Image courtesy of tiverylucky/FreeDigitalPhotos.net

Because you just weren’t shelling out enough cash for your lattes, Starbucks has graciously unveiled a new way to tip your barista. About 10% of Starbucks customers already use their nifty app to pay for their caffeine infusions by swiping their smartphones. But now they can update that very same app and use it to tip as well. Ain’t technology grand? Tips from this app range from $.50 to $2.00. So instead of those tip jars staring you in the face imploring you to pony up in front of that long snaking line of people behind you, you can just get that same feeling by looking at your smartphone. How super convenient for you – and for Starbucks.

Wall Street’s latest high…

Image courtesy of sheelamohan/FreeDigitalPhotos.net

Image courtesy of sheelamohan/FreeDigitalPhotos.net

There’s a reason why securities industry employees are occupying Wall Street a lot longer than some of you tried to – they can afford it. The average bonus received by any number of Wall Street Securities industry employees for 2013 was $164, 530. Why that’s a 15% increase from last year! Good grief! Aren’t you in the least bit curious to know what they did to earn these record bonuses? Well get on line. If you’re seething (with jealousy?) at these huge numbers, try and take comfort in the fact that 2013 was only the third highest year for bonuses. 2006 took the top spot with the average bonus coming it $191,360. And if that still doesn’t calm your nerves, you know what they say: If you can’t beat ’em join ’em.

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…

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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.

Mother Nature’s Allegedly Messing With Employment, Wham! Bam! Thank You Wall Street and Back Off My Guacamole, Global Warming!

Give mother nature a new job…

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

While 139,000 might seem like large healthy figure to you, on Wall Street that number is paltry at best. Especially when we’re talking about the amount of jobs added to the private sector. Maybe you or someone you know did score a job in the last few months, but analysts on Wall Street were hoping for a much bigger number. And just like everything else this fiscal quarter, it’s mother nature who is once again being blamed – at least partly – for the villainous role she’s playing in our slowed economy. With that, unemployment is expected to hold steady at 6.6%.

Is it all about control?

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Image courtesy of vectorolie/FreeDigitalPhotos.net

No matter how you feel about guns, if you think more gun control is going to reduce the number of firearms purchases, you might want to rethink that logic. Shares of  Smith & Wesson, the hand gun maker, shot up 10%, shooting way past Wall Street’s expectations. Firearms enthusiasts stocked up on weapons because of the possibility of stricter gun control regulations on the horizon. Other firearms manufacturers had similar gains as well. The gun maker took in a third quarter profit of $20.8 million.

Holy moly…

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Image courtesy of pakorn/FreeDigitalPhotos.net

Big Chipotle fan, are ya! The mouth-watering guacamole that keeps you coming back to the tasty Mexican grill uses 70 avocados to make a batch. That translates to 97,000 pounds of the largely California grown produce. But you better get your fix in while you still can because if global warming lives up to its hype then those tangy salsas and mouth watering guacamoles might become nothing more than a dream you once had. In its annual report, Chipotle ominously suggested that “Increasing weather volatility…could have a significant impact on the price or availability of some of our ingredients.” And if that drought in California doesn’t let up soon, you can say adios to your guacamole.