Friday Finance Weekly 82ND Edition

Greetings folks and a warm welcome to the 82ND Edition of Friday Finance Weekly.

For this week, I want to try a new format and give you a quick dose of the most important finance news (3 positive and 3 negative). This is a summary from the Zero Hedge website, so I can’t take too much credit for it.

  • Positives –
    • Yahoo acquired Tumblr for $1.1B. Not sure if this is a good idea, Yahoo’s shares are flat for a week (0.72% decrease). Honestly I still don’t know what Tumblr does.
    • Average new home prices soar, unfortunately real income does not. I guess this is bitter sweet, loss of income is offset by increase in home values. Wait, there is no way this has happened before right?
    • Foreign banks have plenty of cash (thanks to the Fed). Basically the Fed is also supporting foreign banks operating in the US by depositing their cash. Translation you can bank anywhere.
    • Negatives –
      • Target misses Q1 significantly, YoY Revenue down $199MM, YoY EPS down $.27. This will change with their entry to Canada and the crazy new ‘Nice to meet you, neighbor’ campaign.
      • Student loan delinquency continues to climb. Here’s a though: maybe they should just make school cheaper.
      • Apple meets the “Fairness Doctorine”, as offshore cash gets scrutinized. Basically the IRS will take an opinion on whether the taxes paid were fair. Given their mountain of cash, I am sure Apple can bury the IRS with paperwork, but this will be precedent setting nevertheless.

(Source: Zero Hedge)

Google Inc. launched a paid streaming music service in the United States that will compete with the likes of Pandora and Spotify.  Google Play Music All Access will cost $9.99 per month, though the search advertising giant was offering 30-day free trials and a $7.99 monthly fee for those consumers who sign up before June 30. Consumers can access the service via Android mobile devices and PCs. The announcement came at Google’s annual developer conference in San Francisco.  As of Jan. 31, Pandora had 65.6 million active users-those who had accessed a Pandora account within the last 30 days-according to its annual report.  Spotify is a private company that claims 6 million paying subscribers and more than 24 million active users. Overall it’s a smart move by Google, but I wonder if they are too late to the game. Apple, for example, still hasn’t launched this service but while most think that this is due to negotiation issues with the labels – it just may not be that profitable. Streaming services need a point of differentiation and so far nothing comes close to a truly social music experience. (Source: Internet Retailer)

Approval rates on business loans from big banks (those with over $10 billion in assets) have improved dramatically over the past year, according to the Small Business Lending Index from Biz2Credit.  The index, which has been tracking bank approval rates since January 2011, compiles data from companies applying for loans from $25,000 to $3 million.  The index shows that big bank approval leapt in September 2012, and since then it has been steadily increasing. In April, big bank approval rates for small business loans reached a record high, peaking at 16.8%. In a year-to-year comparison, approvals at big banks are up over 50%. This is truly a positive sign as small business is where you see overall economic improvement and serious impacts on unemployment. That being said, I hope small business lending isn’t up because of government influence. If that was the case the underwriting standards would be impacts and write-offs would precipitate.  I guess it doesn’t matter, since the government will fund banking losses. (Source: The Financial Brand)

Okay, I rarely put links in this blog, but you have to check this out:

http://wapo.st/10YEXM8

Its title is, ‘These 31 charts will destroy your faith in humanity’. Topics include, trends by armed conflict type, human slavery, and some hilarious ones such as water consumption during showers. (Source: Washington Post)

Eliel Santos fishes the grates of New York City seven days a week, reeling in enough bounty to sustain him for the last eight years, he told the New York Post in April. The “fishing line” Santos, 38, uses is dental floss, with electrician’s tape and Blue-Touch mouse glue — equipment that “he controls with the precision of an archer,” the Post reported. His biggest catch ever was a $1,800 (pawned value) gold and diamond bracelet, but the most popular current items are iPhones, which texting-on-the-move pedestrians apparently have trouble hanging onto. Okay so since this is essentially a donation, people who have their stuff found by Santos should be eligible for a tax receipt, right? (Source: New York Post)

Have a fantastic weekend and for my American friends I hope you have a good long weekend. Don’t hesitate to forward this newsletter. Many thanks,

Sam

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