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$150 billion is the stock buyback that Carl Icahn would like to see from Apple Inc. Apple might like for Carl Icahn to go away now, but he’s not going to. Icahn met with Apple Chief Executive Officer Tim Cook over dinner earlier this week to discuss the buyback, but the two decided to table the discussion for the next three weeks. Apple has the cash on hand for such a buyback, but around $100 billion of that is held offshore where it’s taxed at 2%. If Apple repatriates that money to fund the buyback, it will have to pay the U.S. 35% rate. Carl Icahn suggested that Apple borrow the buyback money at a very low interest rate.
14 amendments down into the U.S. Constitution, in the single most-litigated part of the document, readers will find language to the effect of “the validity of the public debt, authorized by law… shall not be questioned.” This language could provide the president with the authority to direct the Treasury Department to simply ignore the debt limit and make payments on the debt. We’re sure that would go over without a hitch! The 14th Amendment has been the subject of more than 84 Supreme Court cases since 1868.
$1.1 billion was the price tag for Monsanto’s acquisition of Climate Corporation. The sale represents a fascinating picture of Big Ag merging with Big Data. Climate Corporation uses thinking machines to analyze weather patterns on very large and very small scales, which yields hyper-accurate forecasts that can be used to develop agricultural and risk-management strategies. From the food we eat to the clothes we wear to the medicines we take, Big Data will be one of the most important factors determining our future.
3 big IPOs hit the exchanges this week, offering plays on everything from jackets to the Empire State Building. Empire State Realty Trust debuted on the NYSE toward the low end of the spectrum, and shares were up on a good first day, trading at above $13. Re/Max Holdings is another real estate outfit dipping its toe in the water, but it was priced higher than expected, and shares were up 3.2% on the first day, trading at $30.21. Burlington Stores, parent of clothing discounter Burlington Coat Factory, priced higher than expected, but closed down a tad, just .15%, to close at $24.86. More proof that the IPO niche is healthy, alive, and kicking.
1 bailout, no Congressional approval needed. Ever since the Great Collapse of 2008, the Federal Housing Administration (FHA) has seen its role in the housing market expand to huge proportions. For the first time in its 79-year history, though, the FHA is asking for $1.7 billion to shore up its teetering finances, to cover potential losses stemming from the low-down-payment mortgages it insured in the run-up to the Crisis.
$4.67* is the price of a McDonald’s Big Mac, according to University of Kansas student Arnobio Morelix, if the company raised its minimum wage from $7.25 to $15 per hour. This represents a $0.68 price hike. But this number should be taken with a grain of salt – and a medium chocolate shake. Why? Because Morelix’s model doesn’t factor in McDonald’s complicated franchise system. Although Morelix made a nice, entirely reasonable effort, it’s every bit as likely that we would see a $0 price increase, or even arbitrary random price increases. With consumer spending making up a whopping 70% of GDP, it’s becoming apparent that low wages have a significant drag effect on the economy.
14,996.48 points marked the Dow Jones’ close on October 4, 2013. The psychologically important 15,000 barrier came down under pressure from the government shutdown entering its third day. The index shed 136.66 points, a little less than 1% on the day. With the government shutdown coming ahead of the debt ceiling “debate,” it might be time to get short or play a decline. Here’s the smartest way to do it. Because…
…15% increases were seen on the CBOE Volatility Index, the VIX, this week as the markets declined. The index jumped above 17. The VIX, or the Fear Index, tracks volatility on the S&P 500 short-term futures markets. There is a fantastic way to play this volatility and make money while others are losing their shirts.
13 members of the Internet activist group Anonymous were indicted in federal court in Virginia this week. The individuals are suspected of launching hacking attacks against government, credit card processing, and lobbying sites in a campaign, “Operation Payback,” to keep illegal file-sharing systems open. Anonymous frequently attacks those it sees as pompous authority figures with methods ranging from public embarrassment to illegal hacking and everything in between. The indicted members of Anonymous are between 21 and 65 years old, from 13 different states. With cyber-attacks on the increase from every quarter, we might as well look for ways to profit from these secret wars.
Today’s top investor story: A “Double Growth” Stock Like This Is the Perfect Fiscal-Cliff Defense