Mad Money: Compare and Contrast the Exuberant Bullishness

Bear Stearns is not in trouble, I mean if anything they are more likely to be taken over. Don't move your money from Bear! That's just being silly! Don't be silly!

That was then. This is now.

September 21, 2015
Cramer: I was wrong—run far away from this stock

Now, look, I got La Quinta wrong. Mea culpa. I should have been more skeptical and less willing to believe the CEO's exuberant bullishness.

Irrational exuberant bullishness, baby. That's what I'm talking about. Booyah.

The Rest of the Story: The Lion Hunter

Last year, a dentist from Minnesota was out hunting lions in Zimbabwe for sport and love play.

His guides lured a lion from a protected game reserve so that he could pretend to shoot it.

The dentist takes his first shot but misses. The lion rushes up to him and offers a deal. Drop to your knees and blow me. I'll let you live. The dentist obliges.

As the lion walks away satisfied, the dentist fires another arrow. The lion once again rushes back and offers the same deal yet again. The dentist obliges.

The lion, looking extremely satisfied at this point, prances away with a renewed sense of life. The dentist fires his third and last arrow at his target. It too misses. The lion, in utter amazement, rushes back to the dentist and asks a simple question, "You are not in this for the hunting, are you?" Oh, how they laughed as the dentist once again obliged him.

This year, armed with those same three arrows, the dentist, a lover of big game, returned to his favorite vacation getaway. Much to his horror, the first shot hits. Unfortunately, he's just an incredibly bad shot. He had no intention of harming the lion. That's why he tracked the wounded animal for 40 hours and severed its head, much like he's done in the past. For example, when something had gone seriously wrong on his college dates. It's just a horrible misunderstanding! A crime of passion!!

This is a fictional story. Any resemblance to actual dentists from Minnesota and actual lions from Zimbabwe is purely coincidental.

In all seriousness, am I being a hypocrite when I hunt big game hunters for sport? I don't even feel guilty. Why is that?

Clearing Up Naive Investor Misunderstandings at Sears

July 24, 2015
Sears Holdings: How $3 Billion Turned Into a Negative

It isn’t really clear why the stock is in a huge downtrend other than possibly typical misunderstandings of the transaction and Sears in general.

Here is an example of a typical misunderstanding that everyone can relate to.

Let's say you have a friend who once had a great high paying job as a senior financial analyst. When the Great Recession hit, he lost his job and is now the head fry cook at a local fast food chain. He wanted to maintain his standard of living though, so he clearly had some cash flow problems.

Using the problem solving and negotiating skills of his last job, he decided to raise cash by selling his 2014 Lamborghini Veneno Roadster. You, being one of his friends, were amazed at how much money he got for it.

In an effort to continue maintaining his standard of living, he worked out an equally impressive deal leasing that car back from the current owner. It wouldn't be forever of course. He would just do it until he got fully back on his feet. You know, just until the financial services industry started hiring massive numbers of financial analysts again.

So, you are probably wondering how you can invest in his turnaround story, now that the Fed has permanently put an end to recessions. Well, that's not a problem. He's just incorporated himself, once again using the skills he gathered at his last job, and is now accepting cash from new investors.

This also explains why your voice mail is full. He's being very persistent and won't seem to take no for an answer. Seems to think that a true friend would not allow another friend to miss out on his once in a lifetime opportunity. And that restraining order? Doesn't seem to stop your doorbell from ringing at 3am. But what else can you really do? He's a true friend who is only looking to help you now that he's down on his luck. It's probably all just a typical misunderstanding.

Of course, the biggest direct issues for shareholders is that the company traded the large cash position for an ongoing lease payment. The higher expenses have a direct impact on earnings that were already extremely negative.

You think? I have no desire to be a Sears investor, even at these "low" prices. Could be wrong to think this way of course, but the long-term risk is way too much for me. And further, I wouldn't want to be a hypocrite. One of my predictions for 2015 was that department store sales for the industry as a whole would be lower in 2015 than they were in 2014. Unfortunately, no pleasant surprises on that so far. Way to go Amazon, I guess.

TAPEWORM for President in 2016!

May 22, 2015
McDonald's ditches more sales for accuracy

From the comments:

You know, in many countries there isn't enough food to feed oneself or they have to get it by walking long distances. In the "developed" world, you get as much food as you want by driving to a drive up window where they hand it to you often with a smile. Yet people will complain over a little wait or the occasional screw up. Doesn't hurt to be a little thankful and a little pleasant to people who work pretty darn hard for pretty darn little and be thankful for what we do have. Many would die just to have one trip to a McD's just once a month if they could get it. - TAPEWORM

I am not joking. TAPEWORM would get my vote. I don't need to know if TAPEWORM is male, female, white, black, brown, gay, straight, religious, athiest, democrat, republican, independent, rich, or poor.

Some people might argue that we shouldn't vote for parasites. Isn't it ironic, don't you think?

The Mob Rules (Musical Tribute)

September 08, 2011
Hundreds of Longshoremen storm Port of Longview early this morning

Longview Police Chief Jim Duscha says six guards were held hostage for a couple of hours after 500 or more Longshoremen broke down gates about 4:30 a.m. and smashed windows in the guard shack.

He says no one was hurt and nobody has been arrested.

June 23, 2011
Screeners for T.S.A. Select Union

“We are obviously thrilled with the election results, but more importantly are delighted that the transportation security officers now will have the full union representation they rightly deserve,” said John Gage, the president of A.F.G.E.

August 24, 2011
TSA groping just another day at the airport

The association produced a video in which every person interviewed said they really appreciated the TSA’s enhanced security procedures at airports — procedures often described as “groping.”

Wells Fargo Fined 1.6 Cents Per Share

July 20, 2011
Wells Fargo settles mortgage-abuse case for $85M

WASHINGTON (AP) - Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom.

The fine is the largest ever imposed by the Federal Reserve in a consumer-enforcement case, the central bank said Wednesday.

Wells Fargo's market cap is $151.80B. Its share price is $28.70. The fine works out to the equivalent of 1.6 cents per share.

That Federal Reserve sure knows how to stop banks from falsifying loan documents and pushing borrowers into subprime mortgages in the future. This is in addition to the great work the Fed has done in stopping this behavior in the first place of course.

How will the executives at Wells Fargo (especially those with stock options) ever recover from this exorbitant penalty?

Meanwhile...

July 7, 2011
Man arrested for 40 bad checks

A Covington County man is being held on 40 counts of negotiating a worthless instrument. Judge Trippy McGuire set a $1 million cash bond.

Investigator Max Smith of the DA’s worthless check unit said 38-year-old Christopher Lewis didn’t discriminate in his distribution of bad checks.

“He slung a bunch out there everywhere,” Smith said. “We had to get him off the street.”

I had a point here but for the life of me I can't remember what it is.

Grinch Wins Epic Battle with Jack in the Box (Musical Tribute)

June 21, 2011
Jack in the Box to stop offering toys in kids' meals

A spokesman for the fast-food chain told Nation's Restaurant News: "Parents were generally not choosing Jack in the Box as a dining destination because of a toy."

I wonder if the spokesman realizes that the restaurant chain was named after a toy.

Wikipedia: Jack in the Box


I wonder if the spokesman realizes that a whopping 19% of the questions in their investor FAQ involve toys.

Jack in the Box: Investor FAQ

14. How can I get a Jack in the Box antenna ball?
15. How can I get a kid's premium toy?
16. How many antenna balls has Jack sold or given away?

California Tax Dollars at Work

Councilman Jeff Prang talks to Time Warner Cable Local Edition host Brad Pomerance about the state budget crisis and how it affects local cities, like West Hollywood.

...

"We're going to have homeless people. We're going to have inmates being released from prisons. We're going to have seniors and the disabled who don't have any services and you can't just abandon these people so it's going to cost cities more money."

Meanwhile in that very same city...



"The expansion of City Hall and the building of the new automated parking garage not only will provide for a better experience to residents and visitors, it will also provide for much needed additional parking while reducing the carbon footprint that a "traditional" parking structure would generate otherwise," added Mayor Duran.

...

Operationally, automated parking garages provide customers with a valet-like parking experience...

$2.6 million / 200 cars = $13,000 per car

Transportation Cost and Benefit Analysis II – Parking Costs

* Shoup documents construction costs ranging from $13,712 to $31, 500 per space at a California university between 1990 and 2002. He notes that most spaces in parking structures cost more than the cars that occupy them.

* Shoup calculates that, including on-street parking, US cities have an average of about of eight parking spaces for each car.

* For each dollar motorists spend directly on their car somebody bears more than 50¢ in parking costs.

* Users pay directly for only about a quarter of total parking costs. The rest are borne indirectly through taxes, reduced wages, and additional retail prices.

* Rideshare passengers, buses, trolleys, walking and telework incur no user parking costs.

Crisis Solution: Tenderloin Medallions

August 7, 2009
Driver competition hot as NYC taxi medallions hit $766,000

"It is an industry that has always gone up," says Andrew Murstein, president of Medallion Financial. "It has outperformed every index you can think of — the Dow, Nasdaq, gold, you name it."

If it works for the taxi industry, then why can't we just apply it to the beef industry?

For Murstein, recent price surges are not surprising; medallions have seen an average 15%-a-year appreciation for 70 years, he says.

"Not only do you get that 15% for your price appreciation, you also get rental income," Murstein says.

I'm still working through the rental income part. Maybe we could apply that to dairy cattle. Got milk? No. Got milk medallions? Hell yes! And I got in early too! Woohoo!

Daus says the financing provided by Medallion Financial is key for many cabbies to make that transition to ownership, and that the company's mission seems to be "helping people achieve the American dream."

Former New York governor Mario Cuomo, who sits on Medallion Financial's board of directors, agrees.

Yes indeed! Taxi cab medallion financing sure "seems to be" helping people achieve the American dream. Who could afford to pay half a million dollars for just the right to drive a cab without the financing?

Here's the really good news though. I think it is safe to say that politicians would be all over my all beef prosperity creation idea. In fact, if you are a politician please contact me and I'll reserve a place for you on my board of directors. Vast riches for all of us. Win win!

This post was inspired by Credit Bubble Stocks: NYT: "You Think Houses Are a Slow Sell? Try a Yacht". See the comments within that post. I was not aware just how profitable medallions had become.

Krugman's Climate of Hypocrisy

January 9, 2011
Paul Krugman: Climate of Hate

But even if hate is what many want to hear, that doesn’t excuse those who pander to that desire. They should be shunned by all decent people.

Can we assume that Paul Krugman has shunned President Obama?

June 14, 2008
Obama brings a gun to a knife fight

“If they bring a knife to the fight, we bring a gun,” Obama said in Philadelphia last night. “Because from what I understand, folks in Philly like a good brawl. I’ve seen Eagles fans.”

For the record, I'm not a fan of Republican Glenn Beck or Democrat Paul Krugman. I think both manage to create a climate of hate. I am not a fan of extremism.

It is my opinion that our country would be far better off with more moderates and less polarization.

January 11, 2011
Paul Krugman Incites Hatred (and Ignores His Own Rhetoric)

It is one thing for political hacks like Olbermann or Beck or even the people at the Daily Kos to frame everything that happens in political terms and ignore pertinent facts. I expect that kind of behavior from them.

However, when a decorated academic economist does the same – and calls it careful analysis – I draw the line. I NEVER have seen or heard hateful rhetoric coming from other Nobel Prize winning economists, ever, and I have spent hours with many of them. Yet, with Paul Krugman, it seems that all we get is hate and name-calling and political talking points. I will let you be the judge of that kind of behavior.

I could not agree more.

Sharing Is Caring (Musical Tribute)

MaxedOutMama: Because Sharing Is Caring

Can you spot the egregious fiscal errors in his example of what the family ought to do?



There's so much debt, since we bought our tent
That we camp every night
We try to do it up right, but we just can't afford light
We're not very bright

We got no cash and we beg for our food
It's for our childrens' sake
They bathe in the lake, there's so much at stake
Our debt still keeps us awake

We camp in the heart of tent city
Our house is empty and dark
It was foreclosed and it's not pretty
Our payments were just too far apart

Some of the bankers were friendly
Some visit us even when they're not
There's nothing left that can be stolen
And we enjoy doing without

Heating our tent without an energy source
Is just part of the fun
We're under the sun, then cold has begun
I sure wish we weren't shunned

The credit card bill is still making us ill
But we almost drowned
Rates were floating around, our massive debt was unwound
As the whole thing crashed down

He's trying to get back to college
But loans are a bit of a drag
We thought they had a place and a purpose
But bank lending has run into a snag

We once owned cars and a pickup
It made finding jobs easy to seek
Walking is now our new habit
The world must be ours since we're so meek

So Disneyland's out, our future's soldout
Our debt was our blight
The sight is a fright, and so is hindsight
Our day's turned to night

It's this fiscal mess that's put terrible stress
On our nation's labor force
There's been shutting of doors, no job offers of course
And debt is the source

And it's par for the coarse to see that camping's endorsed
As our jobs are outsourced

The Sarcasm Report v.51

Proof that Interest Rates Are Getting Ready to Rise Sharply

Barron's says rates will stay low as far as the eye can see.

Fantastic proof!!

A special thanks to the columnist for Forbes.com for showing us all his work too. There's just no disputing it once all the evidence is laid out like that.

There's more though. Unlike Barron's, we know we can trust Forbes.com to tell us how it is. They are always spot on.

August 26, 1999
Forbes.com: "Outlook: A perfect economy"

While the trade deficit may counter GDP growth, it's not a bearish sign for the economy. On the contrary, U.S. consumers' seemingly unquenchable demand for cheap imports is an undeniable indication of the strength of the U.S. economy relative to the rest of the world.

The S&P 500 closed that day at 1,300.29. It's only 14% lower today. That's nearly 11 years of solid "undeniable" perfection.

A Hidden $34 Billion Bank Subsidy?

A Hidden $34 Billion Bank Subsidy?

So we have a lot of people that will get very upset about money going to foreign aid, money going to needy families, thinking that that might not be a good expenditure, but the point here is we’re giving much more money to Goldman Sachs and Citigroup, Bank of America, than we are to foreign aid or to needy families.



Image created by yours truly at Says-It.com.

The Illusions of Olympic Victory

Rio de Janeiro gets 2016 Summer Olympics

The Windy City, considered a favourite to be one of two finalists, mustered only 18 of a possible 95 votes. In the end, Rio de Janeiro prevailed with 66 votes to Madrid's 32.

Chicago didn't win? Shocking!

Where was the governor of Illinois when we needed him? Impeached? Convicted? Removed from office? Prohibited permanently from holding any future office of honor or trust under the convicting State? Indicted by a federal grand jury? Inquiring minds want to know!

Michelle Obama's 'Personal Sacrifice' to Boost Chicago

The effort and energy needed to make the president and first lady's quick trips to Copenhagen possible could be considered Olympic-sized by some estimates. The approximate cost of flying Air Force One round trip for 18 hours calculates to more than $1.2 million -- roughly $67,000 per hour.

The estimated greenhouse gas emissions of Air Force One for that trip amount to more than 1 million pounds of carbon dioxide. Compare that to a roundtrip on Amtrak from New York to Washington D.C. emits 220 pounds of carbon dioxide. The president's trip is the equivalent to 4,500 of those roundtrips.

The Boeing 757 the first lady rode separately emits nearly 374,000 pounds of carbon dioxide.

Those figures do not include the operational costs or emissions of the several passenger and cargo aircraft that accompany Air Force One with staff and equipment.

Ever heard of carpooling? Seriously.

We elected you to be stewards of our money and all we got was 1.4+ million pounds of carbon dioxide, a bill for $1.2+ million, and this lousy T-Shirt.

Incorrect Claims Incorrectly Corrected by Kimberly Clark

Talk about a tongue twister! Just try saying that 10 times fast. That's not all that's twisted though. The math is too, and spun!

April 11, 2007
Toilet paper price rise claims incorrect

Recent media reports of a 103% price rise in toilet tissue are incorrect and are based on a misreading of Australian Bureau of Statistics (ABS) data by Family First researchers in Senator Steve Fielding’s office.

Kimberly Clark's correction is also based on a misreading of the data. You'd think they'd be extra careful knowing that there had already been one statistical mistake, but alas, that was apparently not the case.

In 2004, the ABS quoted on a 4 roll pack of toilet tissue, but in 2006 it used an 8 roll pack in its statistics.

Kimberly Clark didn't feel the need to point out that the 4 roll pack had 220 sheets per roll, but the 8 roll pack only had 190 sheets per roll. Surely they should have noticed. I did and I'm not even a toilet paper expert (although some might disagree, lol). The data clearly shows it. No digging deep required.

In reality, price per roll of toilet tissue has changed by 6%...

In reality, that is true. But in practice, the rolls are not the same size so it is actually a completely useless statistic. In fact, it is every bit as useless as the original claim by the media.

In December of 2004, "Toilet paper (4 x 220 sheet rolls)" cost an average of 305.375 cents in 2004. (I simply averaged the prices in the 8 cities provided.) That's 0.347 cents per sheet.

In December of 2006, "Toilet paper (8 x 190 sheet rolls)" cost an average of 649.25 cents in 2006. That's 0.427 cents per sheet.

That's a 23% increase per sheet in just 2 years. That's an average increase of 10.9% per year.

Kimberly Clark was rightfully concerned about the first statistical mistake. The number of rolls was not held constant. The outlandish inflation claim by the media made Kimberly Clark look worse than they really were.

Kimberly Clark had no problem whatsoever abusing that VERY SAME type of statistical mistake. The number of sheets was not held constant either. By not acknowledging it, Kimberly Clark made Kimberly Clark look better than they really were.

There's a word for this behavior. It's called hypocrisy.

Fortunately, governments do account for the quantity of an item when determining consumer price inflation. Unfortunately, the same cannot be said of the mass media and/or Kimberly Clark it seems. Two wrongs clearly don't always make a right.

As scary as this sounds (and believe me it is scary), I trust government more than I trust the mass media and/or global corporations. That's not really saying much though. Sigh.

And lastly, sorry Australia. Apparently you should have stocked up on toilet paper in 2004 when you had the chance.