What We're Reading

Step aside Sears and Roebuck catalog.  As if brick and mortar wasn't already struggling against online shopping, EBay Inc is launching virtual stores called "shoppable windows" this month that the e-commerce company hopes will help retailers generate more sales from their existing physical store networks.

The screens, which have been Beta tested in San Jose the last few months, will now be expanded to four locations in NYC according to an eBay blog.

The new screens measure about 9 feet across and 2 feet (0.6 meter) high and will appear on the front windows of closed stores. Shoppers will be able to touch the screens to order and have products delivered to them within an hour via courier. Payment will be accepted by the couriers through PayPal Here, a mobile payment service developed by eBay.  Read more........

fwiw my 20 year old son pondered this article for an entire 15 seconds before agreeing; yes mobile could very easily take over consoles......and the technological advancements would be (as he put it) "totally awesome".

For mobile to win, consoles don't have to lose. They’ll just continue to expand their capabilities. Being able to pick up and play more streamlined experiences that transition between a console and a smartphone is certainly doable today.

Such wide adoption by consumers from every financial segment means that mobile is now an enticing market for the big gaming houses. No longer will they be catering to a niche but rather the large and growing mainstream.

That transition, which is expected to accelerate in 2013 through 2016, especially in emerging markets, means we will continue to see large development houses shift their resources to mobile. Combined with more powerful hardware, faster LTE networking, better battery efficiencies, and on-board sensors should result

Japan's government is set to urge the nation's public pension funds - a pool of over $2 trillion - to increase their investment in equities and overseas assets as part of a growth strategy being readied by Prime Minister Shinzo Abe, according to people with knowledge of the policy shift.  Read more........

The sharp increases in investment that have driven China’s rapid economic growth for the past 30 years are not sustainable, and consumers can’t provide additional demand unless wealth is redistributed toward Chinese households. The most obvious consequence of rebalancing is that it will result in much slower growth over the medium term. While many economists now project that average annual economic growth will fall to between 5 and 7 percent a year during the next decade, I expect it to slow even more, perhaps to 3 to 4 percent a year. In modern history, no country that has experienced an investment-driven growth “miracle” has avoided a slowdown (such as Japan’s after 1990) that surprised even the pessimists, and it is hard to find good reasons to think China will be an exception. 

As a result, many businesses in China and around the world will thrive, while others will be forced to make wrenching changes. Here are four predictions about the ways China’s rebalancing will affect the

This in followup to my post on Corporate share repurchase programs and my thought that they have increased of late in an effort to boost EPS. 

Please consider this view on Corproate profit sustainability from Califia Beach Pundit:

The fact that corporate profits have tended to track nominal GDP over time is not unusual, but the degree to which profits have outperformed nominal GDP in recent years is exceptional. I've argued for a long time that the market looks at the first chart above and sees a compelling case for corporate profits to revert to their long-term mean (just above 6% of nominal GDP). That would of course imply either a huge decline in profits in the next few years, or an extended period of flat profits, and that helps explain why the market is reluctant to embrace equities.

Read more........

We've spoken of this from time-to-time in Chat and I never leave feeling very reassured for my children's children. 

Remember the milkman?  The corner newspaper paperboy?  The assembly line workers at Detroit automotive plants?  How about the shrinking postal service and empty ghost plants that were once steel mills?   Then there are travel agents and printing press operators; both almost eliminated at this juncture.

As we speak, millions of algorithms created by computer scientists are frantically running on servers all over the world, with one sole purpose: do whatever humans can do, but better.  According to some, the displacement of labour by machines and computer intelligence will increase dramatically over the next few decades. Such changes will be so drastic and quick that the market will not be able to abide in creating new opportunities for workers who have lost their jobs, making unemployment not just part of a cycle, but structural in nature and chronically irreversible. I

At their worst, stock buybacks can be a form of corporate cannibalism. Often the unspoken motive is to use extra cash to boost earnings per share by reducing the number of shares among which the company's profits are divided. But that can be a slippery slope says Kevin Beech, an Analyst at Behind The Numbers.  "If they don't keep repurchasing stock, their earnings will take a hit. So it can turn into a sort of an addiction."

Another question is how prudent will they be in their repurchase?  Will they do so at a high p/e (flashback to NFLX Reed Hastings buying back @ $300/share in 2011) or will they do so on weakness and during dips? 

Still others actually target names with a share repurchase as short candidates for a variety of (very possibly prudent) reasons.  (Hat tip to veteran member GT)

Lastly you must ask yourself do companies with stock buybacks perform as well, better or worse than the S&P?  Talking heads would have you believe a stock repurchase drives prices higher........

Of course!  Where would we be without that Capital Gains write off or the one for your new yacht (business purposes don't ya' know) and even that childcare credit come April 15th each year?  Corporate tax breaks, deductions for solar panel and other energy efficient installations, the list goes on and on..........all tax "incentives" to encourage money flow, business growth and spending...right?

In fact America loves it's tax breaks, especially the very rich who are able to benefit from the majority.  It's gone even so far as rewardinglarge corporations with tax breaks to even do business in the U.S.  As an example, Starbucks receives a tax break for roasting their coffee beans here.  Seriously?  Wait a minute.  That's part of  "manufacturing", isn't it?  We may as well give U.S. Steel a break for having it's own smelter (please don't suggest that one - they'll probably lobby for it!)  

Well that what they basically consider an "expenditure" the same as when the government issues a "

I'm sorry but you just know in your gut that the entire "limited supply" was just a ploy.  I've always found it amazing that once the big boys switched over their rigs from gas to oil, not only were we pumping out more of the black stuff, but surprise surprise they found boatloads of the stuff in Bakkens leading us towards energy independence!

The US produced more crude oil domestically during January-April this year at an average rate of 7.11 million barrels per day (bbl/d) than in any comparable period in more than two decades going back to 1992. Meanwhile, imports during the first four months of this year fell to the lowest level for that period since 1997, sixteen years ago. Together, the increased domestic production this year and the declining dependence on foreign sources brought net oil imports to a 26-year low.  Read more at aei.org

Under the category of "duh, no shit" comes a report from the St. Louis Fed office admitting what everyone already knew.  Typical households have not recovered from the credit crisis.  In fact, they're only halfway there.  Of course showing the full truth doesn't sell newspapers (or ad space).  The typical Joe who saw his job outsourced after 20 years with a company, 401k drained and whose kid (s) have moved back home because they can't afford to live on their own any long ALSO WHILE and working TWO wonderful $7.50 an hour jobs could've told the Fed that.  Seriously, how much do they pay these guys?  Read more-

It's not just about big business being able to borrow and refinance debt at low (ZIRP) rates.  It also impacts home buying affordability, consumer spending, higher chargecard APRs for the little guy who can barely afford it and yes, yield for the big dogs.  From an investment standpoint, large investors will pay attention.  As an example the 10 year yield is now at 2.15.  Yesterday, it crossed the dividend yield of the S&P 500. This means it is now more profitable to buy bonds than to invest in the stock market.  An interesting perspective.  Check it out at MrTopStep

With market participants so concerned over the effects of if/when Bernanke takes his foot off of the QE gas pedal, here comes DB and BusinessInsider to remind us of historical market moves when rates were raised.  Based on monthly historical charts, you will notice a few 10-20% corrections however nothing earth shattering.  The markets found a floor based on true economic demand and continued their uptrend. 

As it stands, JPM believes the Fed will not being to taper until their December meeting unless labor improvements continue as they have the last six months; at which point then they look to the September meeting as the most obvious time (after Jackson Hole).  

Still, we need to forever bear in mind that markets are forward looking.  With Summer doldrums and money managers prepping for their getaways in the Hamptons, one has to wonder just when markets will begin to bake in a tapering of bond purchases at the very least.  Many eyes are also already watching the 10yr for signs of r

Historically the week following June's triple witching options expiration has been "horrendous" according to StockTradersAlmanac.

In fact, in post-election years since 1953, June still ranks poorly and its average loss for DJIA and S&P 500 increases to –1.2% and –0.7% respectively compared to –0.3% and –0.01% in all years. DJIA in particular struggles, advancing in just three post-election year Junes (1977, 1985 and 1997). NASDAQ and Russell 2000 fare best in June, posting modest average gains.

Throw into the mix the concern that the Fed will be discussing possible avenues to ease off of the QE gas pedal at their June and July meetings and you have more reason to possibly see weakness as the Summer doldrums begin. 

The Monday of Triple-Witching Week the Dow has been down ten of the last sixteen years. Triple-Witching Friday is better, up seven of the last ten years, but mixed over the past 20 years, up eleven, down nine with an average loss of 0.3%. Full-week performance is choppy as w

If they were to pursue foreclosures in a timely fashion as well as push out the REO's sitting on the books, prices would fall.  Don't believe for a minute this is only the U.S. either.  This is/will be a global approach.  Now that values in many areas are almost back to pre-crisis levels, are we about to see a glut of inventory hit the market?  I'm willing to say so.  House hunting anyone?  (RealEstateEconomyWatch)

As if Merkel didn't have a difficult enough road ahead of her running up to September's elections, Berlin politicians have now signaled to coalition partners their interest in a bilateral movement away from austerity and towards stimulus in the form of low-interest loans and venture capital.

The fact that the finance minister and the chancellor are suddenly willing to do things that have been off-limits until now also has something to do with an internal Chancellery dossier from mid-May. The government headquarters had asked the ministries to take stock of the EU growth pact that was approved in June 2012 to support the austerity programs. The results were, in fact, supposed to demonstrate how well the German bailout strategy was working. But the officials' conclusions shocked even calculated optimists. In their report, they painstakingly documented that debt-ridden countries, especially those that have not taken advantage of EU bailout programs, have hardly made any progress in terms

We've spoken numerous times in Chat about various apps for our smart phones and tablet, but how many apps are truly out there?  Google is alleged to have over 700 apps in Google Play however I've never counted and I'd imagine that number fluctuates continually as old, blah apps are deleted and replaced with hip, upbeat inspirations.  Of course this still does not include apps for Apple iPhones/tablets and those apps just sitting out there on blogs and websites.  It boggles the mind so I began a search and came across this list, which strangely misses tdAmeritrade's Think or Swim app; but what apps do YOU use?  Please add them to the comments below or give us your opinion on those shown.  I'd love to hear from you!

1. CNBC Real-time - Download - Free app that allows you to view real-time quotes before, during and after market hours. Other features include watching CNBC video clips, viewing charts, and managing a watch list.

2. Yahoo! Finance - Download - Yahoo's free stock app offers