Involving: Beijing pollution making people stay home, Yahoo no longer a yahoo, Caterpillar’s sex accounting scandal, BB10 tomorrow, credit card charges, buying Apple shares, and some already-well-known ways to buy cheap air tickets.
Good morning
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As a general morning observation – I do love days where almost every article on Bloomberg/Marketwatch/Reuters/BBC/WSJ is interesting. So this is a snapshot of a bit of everything.
The headlines:
- Beijing tells everyone to stay home.
Link: pollution “serious”.
The summary: even the Chinese authorities today announced that the air quality was at its worst level on their scale, admitting to a concentration of fine air particles of 370 micrograms per cubic meter. The WHO recommends a maximum level of 25. The US embassy in Beijing reading was at 526 micrograms per cubic meter. Visibility was at 100 meters.
It’s interesting because: it was bad enough to cancel flights. And, also, look at this blog for satellite images.
- In earnings news, Yahoo says “Yahoo!” at no longer being a yahoo.
Link: I’ll make a confession here as well.
The summary: Yahoo earnings beat analyst estimates, which is a fancy way of saying that “they did better than expected”. New CEO Marissa Meyer says that she wants to get users to spend more time on popular sites, like mail and Yahoo Finance. My confession is that I use Yahoo Finance all the time. Mostly because it’s easier to use than Google Finance (at least – it was when I was looking for a finance data/share price site). Success? The downside was a fail on the advertising front. But you know what – you can’t advertise successfully until you have a product that people use all the time. So I think Marissa’s focus is well-placed.
It’s interesting because: I’ve been using “Yahoo” as a synonym for “fail”. And it looks like I stand corrected.
- Empire State Building investors go to court.
Link: inheritance squabbles.
The summary: investors paid $10,000 a piece in 1961 to buy the lease of the Empire State Building. It was then sublet (in a 114 year lease) to a joint-venture between Lawrence Wein (today represented by the Malkin Group) and Harry Helmsley (today represented by the Helmsley Trust). The Helmsley Trust wants to cash out, so the Malkin Group would like to form the Empire State Realty Trust, holding the leases on all 18 properties originally leased by the joint venture, and list it on an exchange.
The property owners sued to stop that from happening (mostly because of some tax implications); and after some courting, the Malkin Group settled with the investors in October for $55 million. Only, now, the Empire State Investors feel that their investment is different to the others, and that “the settlement is both grossly inadequate and unfair apportioned”.
It’s interesting because: it’s the Empire State Building. Obvs.
- The perils of paying with a credit card in the US.
Link: the “checkout” fee.
The summary: retailers in 40 US states can now charge you a 4% fee for paying with your credit card. This is after a group of merchants sued Mastercard, Visa and nine other card operators for colluding on fees charged for stores to accept credit card payments. Part of the settlement involved this fee situation.
It’s interesting because: what did the poor consumer do? On the other hand, it sounds like life working around to impose a Pigovian tax on buying on credit.
- Reasons to buy Apple now.
Link: the turning of the tide?
The summary: Apple’s share price has dropped to $445 from $700. Now – I know that Apple has been in a bit of a bad way – but has anything really really happened to justify a 36% drop in value? Some might call this adjustment an over-reaction. Because at the end of this drama, the fact remains that Apple is cash-rich, generates high margins off all us Apple fans (who pay the margins in order to be Apple fans), and currently has a PE ratio of 10.2. Which is pretty close to Samsung’s PE ratio of 10.4 – except Samsung offers a Return on Equity of 19%, where Apple’s is close to 40%. Does that really make sense then?
It’s interesting because: it’s time to turn on the market and buy Apple shares.
- Best air-ticket value.
Link: the how to guide.
The summary: buy your domestic flights 49 days prior to departure, and buy your international flights 81 days prior to departure. Also never book the day before your flight. Or two days before. Which is a complicated way of saying: the earlier you book, the better a deal you get. Because 49/81 days is clearly a case of statistical average getting out of control. And don’t book to travel over Easter/Christmas/School holidays.
It’s interesting because: it really is an idiot’s guide.
- Blackberry’s crunch moment.
Link: tomorrow.
The summary: CEO Thorsten Heins makes the BB10 announcement tomorrow.
It’s interesting because: at least one analyst has described this as “Rim betting the farm”.
- Immigration reform.
Link: the tipping point.
The summary: Republicans seem to be turning on their toes around immigration control, attempting to woo Hispanic voters (who want it) whilst staying true to their hick supporters (who don’t). Yesterday’s bipartisan plan includes a citizenship path for around 11 million undocumented immigrants.
It’s interesting because: I’m always interested by immigration. As I wrote about here.
- Goldman selling its stake in ICBC.
Link: Standard Bank?
The summary: GS is trying to sell its $1 billion stake in the Industrial and Commercial Bank of China, after ICBC shares recovered by around 50% since last year.
It’s interesting because: ICBC owns 20% of Standard Bank here in South Africa.
- Caterpillar and the false accounting.
Link: Continuing to probe “all options”.
The summary: losses from “false accounting” at a Chinese business led to a $580 million write-down of a $793 million purchase that Caterpillar made in October last year. The losses arose after an Inventory Count at one of the investment subsidiaries in November.
It’s interesting because: phrases like “multiyear coordinated accounting misconduct” are the financial version of a celebrity sex tape.
That’s all for now.
Have a good day.
