Thursday, September 29, 2016

Thoughts on Costco

September 29, 2016
After-hours buzz: COST, MENT, AA & more

Costco's stock ticked up about 2 percent in after-hours trade Thursday. The wholesale retail giant reported quarterly earnings of $1.77 per share, beating analyst estimates of $1.73 per share. It missed on revenue, however, reporting $36.56 billion, compared to analyst estimates of $36.81 billion.

For what it is worth, Costco coupon books have been fairly lame lately, especially when it comes to food (our biggest purchases). Perhaps that explains some of the revenue miss. We've certainly spent less there (in favor of local grocery store sales). Did find a really nice pair of leather boots last time I went though. The shockingly low price was too much to resist. After trying them on at home, will probably buy another pair. No risk of us cancelling our membership.

From an investor standpoint, I'd be much more worried about Sam's Club. My local store has the advantage of shorter lines, a much emptier parking lot, and a lack of customers. Makes me wonder how much longer that store will continue to exist. Further, there is always some risk of us cancelling our membership. Wouldn't take much. The membership was most useful when we were buying drugs for our dog. She passed away, and so too, our membership perhaps. It's renewal time and it might actually come down to a coin toss. If we do cancel, Costco will see more revenue from us.

In my opinion, as a customer and over the long-term:

Costco > Sam's Club

Clickbait News of the Day

September 28, 2016
Yahoo Finance: Can I Fix My Credit in a Week?

"Unfortunately, there are no quick fixes for credit because it took time for this problem to arise and it generally takes much more than a week to resolve it," John Heath, a credit expert and consumer attorney for Lexington Law, a affiliate, said in an email.

Next up:

Time Is Money: How You Can Lose 10 Minutes per Day Clicking on Yahoo Finance Links

Tuesday, September 27, 2016

Wells Fargo Fined Again

September 27, 2016
U.S. says Wells Fargo to pay $400,000 to settle charges over swaps

WASHINGTON (Reuters) - Wells Fargo Bank has settled federal charges over inaccurate large trader reports for physical commodity swaps positions...

Harsh words and a fine equaling a whopping 0.000176% of Wells Fargo's market cap ($400k / $227b) will once and for all teach senior executives that crime doesn't pay.

It's the nanoscale straw that will break the adamantium camel's back.

Heads will rofl. They always have a scapegoal in place for these types of miner emergencies.

One of my patients had a rather amusing Freudian slip: he was having dinner with his wife, and he meant to say "pass the salt", but instead he said "You've ruined my life, you blood-sucking shrew." — Niles Crane, Frasier

Consumer Confidence: Party Like It's 2007!

September 27, 2016
Consumer confidence jumps to highest level since 2007

WASHINGTON - U.S. consumer confidence rose in September to the highest level in nine years.

Can you blame consumers for being so optimistic?

1. As in 2008, we are about to elect a new president! And with two extremely popular candidates to choose from, we can't lose no matter who we pick! Hurray!

2. Although Eddie Lampert is doing everything in his power to destroy department store jobs, he's just one man and there just aren't that many jobs left! Hey Jeff Bezos, ever play Mortal Kombat? This one's for you!

3. Thanks to the Fed's zero interest rate policy, the average credit card rate is just 15.22%! Never been a better time to borrow money to buy that cheap plastic dream item from China!

4. Although there have been roughly 20 recessions since the Fed was created, there will be no more recessions! We have finally achieved a permanently mediocre plateau of sub-par growth! That's right. We are stronger than ever before as we hobble and stumble along into the future! Perfectly fine as long as no external shocks ever appear again! Woohoo!

Livin' the dream!!

Monday, September 26, 2016

Interest Rates

September 22, 2016
Purdue University: We've Got Really Low Interest Rates

Interest rates are low.

This breaking news intended for those who have been living in a cave for the past 8+ years.

As a side note, if you are just now emerging from a cave then you might want to take rising interest rate theories with a grain of salt.

New York Times: Interest Rates Have Nowhere to Go but Up

Even as prospects for the American economy brighten, consumers are about to face a new financial burden: a sustained period of rising interest rates.

There's just one major problem with the warning in the New York Times. It was published on April 10, 2010. The 30-year treasury yielded 4.74% then. Nearly 6 1/2 years later, it now yields just 2.32%. Oops.

A saver who assumes that interest rates can only go up may be like a person dying of thirst in the desert who assumes that the water level in his empty canteen can only go up. Might just be wishful thinking.

Hope for the best; plan for the worst.

Sunday, September 25, 2016

The Sarcasm Report v.261

September 24, 2016
USA Today: How to turn a 3% raise on a $60,000 salary into $479,000

If you were able to save every penny of every raise for 15 years, using the same numbers above, you’d end your 15 years with over $479,000 in your retirement plan. In order to realistically pull this off, you’d have to somehow become immune to cost-of-living increases. Which means you somehow are able to keep your health care premiums stagnant, energy prices stagnant and consumer goods prices stagnant. It’s a very difficult task, but not impossible.

If someone out there has "somehow" become immune to cost-of-living increases and no longer sees health care premiums rise, please let us all know how you did it!

Next up, find out how to "somehow" lose 2 pounds each and every day eating nothing but pizza and ice cream while binge-watching Netflix from the comfort of your own couch! It's a very difficult task, but nobody can actually prove it's impossible!

Liposuction 24/7? Hooked up to a central home vacuum system? Think outside the box, people. This is America. Nothing is impossible!

Thursday, September 22, 2016

I Propose September to Be National Steal a Penny from Our Bank Accounts Month

A penny is just a drop in the bucket for the average account holder, but all those pennies could add up to millions of dollars. The money could then be used to enhance the banking system's bottom line and/or increase the bonuses of top banking executives. It's a very noble cause. Trust me on this.

September 22, 2016
CNBC:Stop beating up on Wells Fargo and John Stumpf

Consider the fact that the fake accounts generated $2.6 million in fees over a four-year period. That is a drop in the bucket (0.011 percent to be precise) compared to Wells Fargo's annual net income of $23 billion.

Sorry. The sarcastic beatings will continue until the morale improves fraud is removed.

Wednesday, September 21, 2016

Department Store Chains Just Need to Connect with Younger Shoppers

The following is a review of Galaxy on Fire 2 in Apple's App Store.

So at first I saw this gam I thought that it was gonna be another lame game so I looked at the pictures and I said this game has very good graphics so I downloaded it forgetting that there was another Galaxy on fire so I didn't even download that and I had no idea what I had to do so I went and did the tutorial and I was soo excited to buy a new ship so I was trying to figure out where do I go to buy a new ship and I couldn't find it so I'm like I probably have to go further in the campaign so I did so I went and bought the cheapest ship I can find I flew it for hours and then I resumed doing the campaign and two hours later I ended it and then I saw that there was more to it so I bought all of the Dlc's and then it took me another 8 hours to end the rest of the campaign. Also I have one thing to ask you can you put it to the point where you can change your view into the cockpit and make the game multiplayer thanks and can you also add more things to the campaign. Thank you for making a game this good to the point I can't stop playing it. - ghjdfjhgfdhjzd

This isn't rocket science. If you are the CEO of a struggling department store chain, then you should know exactly what to do now.

Give up? Close stores? Lay off workers? What?

No, no, no! Simply connect with your future customer base! Don't be silly!

September 17, 2010
Los Angeles Times: Department stores reach out to capture young shoppers

The department store industry, coming off its worst year in three decades of market share decline, is mounting an all-out battle for the next generation of shoppers.

It's been 6 years. The department store industry may have lost nearly every battle, but the war is not lost yet. One must admire the ongoing tenacity in the face of perpetual doom!

Tuesday, September 20, 2016

The Sarcasm Report v.260

September 19, 2016
USA Today: If Fed finally raises rates, here's how you'll feel it

Another issue is that there is a lot of liquidity in the financial sector at the moment. As that starts to ease we can expect increased competition for retail savings, and with increased competition comes better rates for savers.

Indeed. I'm really looking forward to all that increased competition. We can expect much higher rates once savers begin to withdraw the $11.3 trillion (and growing) from commercial banks, stuff it under their mattresses, then light their mattresses on fire.

Just need patience. As a side note, never been a better time to invest in lighter fluid and matches. That's a lot of liquidity that will soon mysteriously start to ease/burn.

Now, if we could just figure out a way to short the monetary printing presses and/or deposit glut directly. People claim that the Fed can print an infinite number of dollars at essentially no cost. What they don't realize is the power of saver arsonists to nearly infinitely undo all that good work, at least in theory.

What will cause the first match to be lit? A conspiracy theory involving listeria tainted greenbacks? Lettuce hope not!!

Transocean's Mothballing Gamble

September 19, 2016
Bloomberg: Mothballing the World's Fanciest Oil Rigs Is a Massive Gamble

And while the decision to idle a chunk of its fleet would seem logical enough given the collapse in oil drilling activity, Transocean is in truth taking an enormous, and unprecedented, risk. No one, it turns out, had ever shut off these ships before. In the two decades since the newest models hit the market, there never had really been a need to. And no one can tell you, with any certainty or precision, what will happen when they flip the switch back on.

What's the worst that could happen?

[Braedon Keller backs away from computers]

Programmer: There's no need for that. It's all very quiet. It's just internal switching.

Braedon Keller: Really? No one's ever switched off a scanner before.

[Scanner switched off]

Programmer: See? I told you. No fireworks.


Saturday, September 17, 2016

Quote of the Day

September 17, 2016
Yahoo Finance: Sears is closing a whole bunch of Kmart stores

In the comments, PK says:

It is a shame how incapable management can bring down a business that has been around for more than a 100 years. But it happens all the time.

Condolences to Eddie Lampert... rats forced to abandon the sinking ship... the remaining Kmart employees who will soon/eventually be laid off.

Thursday, September 15, 2016

What We Learned from the Lehman Brothers Collapse

September 15, 2016
CNBC: On this day 8 years ago, Lehman Brothers collapsed: Have we learned anything?

We learned that great leaders must understand their business and know how the pieces fit. They need to read, network, connect the dots, anticipate, and try to limit the surprises. Surprises can kill a company.

January 10, 2007
CEO Richard Fuld on Lehman Brothers’ Evolution from Internal Turmoil to Teamwork

First, leaders must understand their business. “Know how the pieces fit,” he said. “Read. Network. Connect the dots. Anticipate. Try to limit the surprises; surprises kill you.” Leaders who have done their homework make it safe for others to follow, he added. “Leaders earn the right to lead.”

Oops. My bad. Richard Fuld taught us this in a Wharton Leadership lecture *before* the collapse.

In totally unrelated news...

September 14, 2016
Forbes: Sears 'Disagrees' With Report Of Its Imminent Demise

Business Insider believes the embattled department store Sears and its struggling discount chain Kmart may be facing their imminent demise. Sears spokesman Howard Riefs begs to differ. “We disagree with the opinions stated in the Business Insider report,” he told Forbes.

Well, if you can't trust a Sears spokesman to tell it how it is, then who can you trust? I'm therefore investing my life's savings in Sears Holdings (SHLD). Sure thing. Can't lose.

Eddie Lampert, I'm begging you. Keep it secret. Keep it safe.

Tuesday, September 13, 2016

Word of the Day

September 13, 2016
Business Insider: It keeps getting worse for Wells Fargo

The thinking is that targeted goals for opening accounts and generating fees lead employees to cur corners and open the account fradualently.

When a lender's fraud is "twice" as bad as it seems?


Fraudulent slip, lack of spell checking, and/or silly puns? You make the call! ;)

The Sarcasm Report v.259

September 13, 2016
Lew: Wells Fargo case a 'wake-up call' for regulation

From the comments:

Nobody suffered financial loss. All fees that "may" have been charged were reversed. $285 million in fines were paid. What the heck do you want, blood? - shaunm

Emphasis added.

If a bank employee steals money from you but then offers to give it back once caught, then you have not suffered a financial loss. No harm, no foul. No jail time needed.

Similarly, if you steal money from from a bank employee but then see the police pulling out up front, simply return the money and exit the bank. No harm, no foul. No jail time needed.

Further, if you kidnap someone but then release them and return the ransom if the police show up, then there's been no crime. Chances are your "victim" even got some free food and temporary lodging out of the deal. Unfortunately, nobody will be reimbursing you for those expenses. Where's the justice?

Forehead. Desk. Whack. Whack. Whack.

Thursday, September 8, 2016

Warren Buffett's Wells Fargo

May 21, 2016
The Motley Fool: 5 Warren Buffett Quotes About Wells Fargo

The real insight you get about a banker is how they bank. You've got to see what they do and what they don't do. Their speeches don't make any difference. It's what they do and what they don't do. And what Wells Fargo didn't do is what defines their greatness. - Warren Buffett

Hey, Warren. Here's something my bank didn't do.

September 8, 2016
USA Today: Wells Fargo fined $185M over unauthorized accounts

"Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully," said CFPB Director Richard Cordray. "Thousands of bank employees found ways to game the system by secretly signing up existing clients for new services that were never requested. They misused consumer names and personal information to create new checking and credit card accounts to inflate their sales figures to meet their sales targets and claim higher bonuses."

Congratulations to Wells Fargo. Your fraud and theft actually enticed me to post. I now exit stage left, back into the shadows. Who knows what will prompt me to post again? Jail time for all the criminals involved? Yeah, right. Hahaha! Sigh.