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Monthly Archives: September 2012

N.J. High School Students Planning Cafeteria Boycott To Protest Obama Guidelines

This makes sense. The best way to wake up the youth to the creeping socialism and over-reaching Obama government is to FUCK WITH THEIR FOOD.

They hope to further their efforts with a cafeteria boycott that will cost the school money, and students like Faris said they want to know why they are paying the price for other people’s problems.

“If somebody’s obese why should someone like me who’s not obese have to suffer, and eat a small meal when I’d rather have a bigger meal?” he said.

Read the rest here.

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Turnaround Tuesdays Revisited

It’s been a while since I updated the Turnaround Tuesday study, so I thought I would do so today.The stats tables below all show results of buying at the close when SPX is down for a certain number of days and the exiting the following day.  The results are broken out by day of the week.  Note that the day listed is the trigger day – not the performance day.  So the Monday trigger tracks Tuesday’s performance.  Tuesday’s trigger tracks Wednesday’s performance… and so on.

See the results, and whether Turnaround Tuesdays are legit or not, here.

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Crack is Back: $RIMM Smashes Earnings Expectations

The stock is rising.


Research In Motion beats by $0.19, beats on revs  (7.14 +0.14)
Reports Q2 (Aug) loss of $0.27 per share, $0.19 better than the Capital IQ Consensus Estimate of ($0.46); revenues fell 31.1% year/year to $2.87 bln vs the $2.5 bln consensus.

— RIMM reports Q2 gross margins of 26.0%; Street expectations 28.4%, Q1 28.0%.

— BlackBerry subscriber base increased to approximately 80 million global subscribers.

— Cash, cash equivalents, short-term and long-term investments increased by approximately $100 million to $2.3 billion at the end of the second quarter

— Cash flow from operations was approximately $432 million in the second quarter.

— Shipments of BlackBerry smartphones were 7.4 million and shipments of BlackBerry PlayBook tablets were approximately 130,000.

“Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition,” said Thorsten Heins, President and CEO. “Subscribers grew to approximately 80 million global users, revenue grew sequentially from the first quarter, cash, cash equivalents, short-term and long-term investments increased by approximately $100 million to $2.3 billion, and carriers and developers are responding well to previews of our upcoming BlackBerry 10 platform. Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013.”

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Nearly 25% of U.S. Households Spent Double Their Income in 2011

The United States’ lowest earners spent more than double their incomes last year, according to data released Tuesday by the Labor Department.

The bottom fifth of the U.S. income distribution — 24.4 million households — on average earned $10,074 in after-tax annual income and spent $22,001 last year, according to the Labor Department.

This percentage of households includes many retirees, who are presumably living off savings.

Many of these households may be spending more than they earn through some combination of loans from family and friends, credit cards, savings, and payday loans. The government helps a bit with an income tax credit: The average bottom-fifth household’s after-tax income is $269 higher than its before-tax income. The income accounted for includes welfare and Social Security benefits.

Many are also taking on debt. In 2010, roughly one-quarter of the poorest fifth of households held a high debt burden, or had debt service payments exceeding 40 percent of their income, according to the Economic Policy Institute.”

Full article

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Philly Fed Data Signals Recession


Nice catch here by Pedro da Costa at Reuters.  He highlights a little followed indicator that is flashing a warning sign (comments via RBC):

“Here’s another indicator flashing red. The three-month trend for the Philly coincident index (which captures state employment and wage metrics) fell to a fresh cycle low of +24 in August – it was +80 just three months ago.

A reading this low historically bodes ill for future economic activity. Looking back at the last five downturns, this index averaged +41 three months prior to the official start of the recession. We have decidedly crossed that threshold.”

Full article

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$BAC: Gold Could Hit $3,000

Bank of America Merrill Lynch is officially forecasting gold prices to hit $2,400 an ounce, according to its latest forecasts, but one analyst at the bank says prices could climb even higher to around $3,000.

Gold is currently trading just shy of $1,750 an ounce and has been gaining on the coattails of central bank stimulus measures, in the United States especially, which weaken paper currencies to spur growth and make hard assets like gold attractive hedges.

“We remain secular bulls on gold. Key chart and uptrend supports between $1,600 and $1,400 have held and we have viewed $1,550-1,500 as a good area to buy gold,” BofA Merrill Lynch analyst Stephen Suttmeier wrote in a note to clients, according to Business Insider.

“[T]he secular bull market for gold points to a stronger rally to $2,050-$2,300 and up to $3,000 longer term. The top of the rising channel from mid-2005 is near $2,375 and reaches the $3,000 area by early 2014.”

Full report

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Fitch: All-out US Fiscal Cliff Could Cut Global Growth in Half

“The unprecedented belt-tightening known as the fiscal cliff that looms over the United States could at the very least cut world growth in half in 2013, Fitch Ratings said on Thursday.

The fiscal cliff — a double whammy of tax increases and spending cuts totaling about $600 billion — could tip the United States and possibly the world into recession, Fitch said.

“The U.S. fiscal cliff represents the single biggest near-term threat to a global economic recovery,” the ratings agency said a research note released in London.”

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EU To Charge Microsoft Over Browser Compliance Breach, $MSFT, $GOOG

“European Union regulators are preparing to charge Microsoft for failing to comply with a 2009 ruling ordering the company to offer users of its desktop operating system a choice of web browsers,Reuters is reporting.

The EU opened an investigation into the case back in July, to determine whether Microsoft had kept the commitments it made under the antitrust ruling which stipulated users should be offered a choice of browsers to ensure a more level playing field for competitors to Microsoft’s Internet Explorer browser.

At the time of the investigation Microsoft conceded it had “fallen short” of the ruling — a mea culpa flagged up by EU Competition Commissioner Joaquin Almunia in the latest comments on the case.

“The next step is to open a formal proceeding into the company’s breach of an agreement. We are working on this,” Reuters quotes Almunia as saying. ”It should not be a long investigation because the company itself explicitly recognized its breach of the agreement.”

We’ve reached out to Microsoft and the EC for comment and will update once we hear back. Microsoft said its July 2012 statement on browser choice compliance still stands — in which it admits “falling short”, apologizes for doing so and blames the failure on a “technical error”:

Due to a technical error, we missed delivering the BCS [browser choice screen] software to PCs that came with the service pack 1 update to Windows 7. The BCS software has been delivered as it should have been to PCs running the original version of Windows 7, as well as the relevant versions of Windows XP and Windows Vista. However, while we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required, we learned recently that we’ve missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1.”

Full article

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The Cloud is a Start to Boost GDP in Europe

“Up to now, the European Commission has kept a relatively light position on where it stands with cloud services — putting more effort into the wider issues like broadband and mobile regulation and ensuring that users all get a fair deal as these services continue to grow. Today that changed, as the EC unveiled a high-level cloud services strategy, with the aim of adding €160 billion ($206 billion) to the region’s economy by 2020, equivalent to 1% of total GDP. Plans include improving interoperability standards; setting up lists of “trustworthy” cloud providers; taking a part in regulating how service level agreements (SLAs) should work; and creating a formalized structure for how governments and other public bodies in the region should procure in cloud services: the public sector accounts for 20% of all IT spend in the European Union.

Some will undoubtedly argue that government intervention in cloud services, especially at this relatively early stage in their development, may actually slow down rather than speed up innovation in the area.”

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Fictitious Accounting at the ECB

Normally i would not be too concerned over this type of accounting, but given all the fails Europe has gone through, and will likely go through, it behooves those to count the “Not Counted.”

Full article

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$FB Suffers a MySpace Event, Twitter Taking the Lead in Mobile

“Twitter has always grown up in the shadow of Facebook (FB).

Facebook was started in 2004 in the dorms of Harvard.  Twitter was started when Jack Dorsey sent an SMS message at 9:50pm PT on March 21, 2006.

Facebook got more early venture capital money. It saw bigger growth. It attracted more “mainstream tech” managerial talent like Owen Van Natta, Gideon Yu fresh off of selling YouTube to Google (GOOG), and Sheryl Sandberg to come in as COO.  Facebook’s revenues have been bigger and faster in coming compared to Twitter. And, of course, Facebook IPO’ed last May, while conventional wisdom is that possibility is still a couple of years away for Twitter.

Facebook is currently worth $60 billion.  The last venture round — pre-Facebook face plant — valued Twitter at $8.4 billion.

Facebook’s trailing twelve months of revenue is $4.33 billion (which was less than Yahoo! (YHOO) over the same period for a little perspective). Twitter’s mobile-related 2012 revenue is expected to come in around $130 million according to eMarketer.

So, while Twitter isn’t “bigger” than Facebook from a market cap or revenue perspective — that might take another 4 years — it is already “bigger” in a couple of important ways.”

Full article

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Prudential is Closer to Acquiring the Hartford, $PRU, $HIG


Prudential Financial Inc. PRU +1.64% is close to an agreement to acquire Hartford Financial Services Group Inc.’s HIG +3.80% individual life-insurance business, and could reach a deal with its rival later today.

Prudential and Hartford have been working on details of the complex deal, which would transfer the responsibilities of policy claims from one insurer to the other and entail related reinsurance contracts, a person familiar with the talks said. Investment bankers and analysts have valued the business at about $1 billion.

A deal would be Prudential’s first big acquisition since it paid nearly $5 billion to acquire two Japanese life insurers from American International Group Inc. AIG +0.85% early last year. Prudential Chief Executive John Strangfeld said this summer that it was “critical” for the company to improve returns and find ways to effectively deploy billions of dollars of excess capital.

For Hartford, a deal would help its chief executive, Liam McGee, make good on a promise to narrow the company’s focus to property-casualty and group-benefits insurance, and mutual funds.

Representatives for Hartford and Prudential said the companies’ policy is to not comment on market speculation. The talks were reported in August.”

Full article

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Fitch Lowers Global Growth Estimates

“Fitch Ratings has pared back its forecasts for global GDP growth to 2.1%, citing “persistent weakness” in the global recovery. That is down from Fitch’s June view of 2.2%. For 2013, the forecast was reduced to 2.6% from 2.8%.

Fitch lowered its 2013 GDP growth expectations for the United States to 2.3%, but kept its 2012 forecast at 2.2%. Persistently high unemployment and the uncertainty surrounding fiscal policy are expected to continue to challenge the U.S. economy.”

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