January 23, 2012
Greek restructuring talks continued over the weekend without resolution. Government officials are expecting a resolution, but private holders are balking at the offer, specifically citing the interest rate on the post-restructuring debt.
Research in Motion (RIMM) announced that co-CEO’s Jim Ballsillie and Mike Lazaridis would be turning over their role to Thorsten Heins, the company’s chief operating officer, as the new CEO. The stock is down after Heins commented that major changes aren’t needed.
A funny thing happened on the way to the Republican nomination for Mitt Romney, he lost again. Over the weekend Mr. Romney lost to a very under-funded Newt Gingrich by 12% in South Carolina. The problem Mr. Romney faces, and the rest of the field for that matter, is that voters don’t seem to like him after seven years of campaigning for President. Where is Monty Brewster when you need him?
Target (TGT) has contacted suppliers as they look for relief from “show rooming.” I’ve discussed this in the past, where people use the bricks and mortar retailers as a showroom, finding and testing products before buying them cheaper online. The company will be asking vendors for special items, versions or models available only in TGT. Wal-Mart, Sam’s Club, and Costco already do this with certain vendors. TGT may be one of the few retailers left with the heft to make these demands as they are the #2 retailer in the US. Smaller retailers won’t have this opportunity and will continue to see margin erosion on non-unique products.
Our good friends in Canada have some bad news for the US economy. Mark Carney, the governor of the Bank of Canada, said it will take many more years for the US to get back on its feet, and that we may “never completely recover. In fact, they are not in our opinion ultimately going to get back fully to the US we used to know.” Ouch!
The Economist recently analyzed US tax policy and concluded that “it would be far better to close or limit loopholes and deductions, currently worth up to 7% of GDP, which distort behavior and mostly benefit the affluent.” Flat taxes anyone?
Warren Buffet, thrust into the tax debate after mentioning that his tax rate was lower than his assistant’s, can’t seem to avoid the topic. He recently offered to match the donations to the government made by members of Congress, and triple the donation made by Senate Minority Leader Mitch McConnell. To my knowledge there have been no takers yet.
The United States Postal Service raised the price of a first class stamp by $.01 to $.45.
The Super Bowl participants are set, New England and New York. Both games yesterday were exciting, with New England winning after Baltimore missed a last second field goal and the Giants winning in overtime after the 49ers fumbled a punt.
Have a great day