CEO of Starbucks Pushes the "Experience"

Too bad the numbers were kind of crappy. Also they seem to be scaling back their expansion to cut back on costs. That seems reasonable to me.

Yet, last week, Schultz blamed the down economy for having to cut guidance for the quarter and warned investors to expect the blow.

Revenues for the second fiscal quarter totaled $5.3 billion, 15.2% year-over-year. United States revenues were up 5.5% to $1.9 billion. Total costs of sales increased 17.1% to $1.1 billion.

At least revenues were up and I think the founder has a good idea about how to make the brand relevant again. I think most of what Starbucks used to sell was an "experience" and not just overpriced coffee. If you want value coffee you go to Dunkin Donuts or McDonalds and sit at a sticky table next to a screaming baby. If you want "coffee-house coffee" you go to Starbucks.

I think Schultz will bring back the value-added part of the Starbucks experience and get away from trying to compete on price. Things like introducing breakfast sandwiches (which tasted awful) distracted them from their main goal of serving a coffee-house experience with your overprice Latte.

GOP Ignores Clinton Like an "unperson?"

I love how Jonathan Martin of Politico puts this little dig in his article about how the GOP is totally ignoring Hillary to go after Obama.

Clinton, it seems, has been erased from the picture, Soviet-style. Republicans mostly act like she doesn't exist--an unusual turn of events considering her run of big-state victories and the fact that not so long ago Republican campaign plans were predicated on the idea of Clinton as the Democratic nominee.

Yes, he just used the Stalinist era idea of the unperson and all of the baggage that that idea implies to describe a sound GOP strategy. When you are in a race against two people that hate each other you go after the front runner and let the trailing person fight for themselves. If you go after both parties then you allow them to join forces with the common notion that they both dislike you. It is just common sense.

In any case I am pretty sure that the GOP do not want Hillary to be erased from history like Nikolai Yezhov or Leon Trotsky were by Stalin. In fact it seems that liberals are the ones who want Hillary to get the "ice pick treatment" for holding out and damaging the party. I just hate how liberals always go from an repulsive idea like Stalin wiping out hundreds of thousands of people (and erasing them from history) and then lumping it into the same sentence as Republican election tactics. At least they didn't compare the GOP to the Nazis.

Now Mastercard Smashes Numbers

They beat by a full 59 cents a share. It looks like that international growth just like Visa is a major driver as well.

Outside the U.S., card usage grew at an even faster clip. Gross dollar volume abroad grew 30% to $352 billion, led by strong growth in Latin America, the Middle East, South Asia and Africa. Americans buying abroad led cross-border volumes up 23.6%, and MasterCard saw total processed transactions increase to $453 billion, up 155% on a local currency basis. Overall, the quarter showed the company doing a fantastic job at home and abroad, with strong results all around.

They seem to be executing even better job at revenue growth then the bigger Visa. The stock reflected this as well as Mastercard went up 13% and Visa went up 7%. In any case it seems that the recession and the credit crisis are not crimping the business of either company at all.

Wright Fires Another Salvo at Obama's Ship

I think Reverand Wright wants to see Obama actually lose the Presidency.

On Monday, Wright criticized the U.S. government as imperialist and stood by his suggestion that the United States invented the HIV virus as a means of genocide against minorities. "Based on this Tuskegee experiment and based on what has happened to Africans in this country, I believe our government is capable of doing anything," he said.

And perhaps even worse for Obama, Wright suggested that the church congregant secretly concurs.

"If Senator Obama did not say what he said, he would never get elected," Wright said. "Politicians say what they say and do what they do based on electability, based on sound bites, based on polls."

He not only repeated his conspiracy theories he also says that Obama deep down agrees with him and is hiding his true feelings to get elected. I'm sure there were lots of anti-Obama people that were feeling that but now his "spiritual mentor" is actually saying it.

Perhaps, Wright is trying to scuttle Obama's campaign just so he could continue to say "America will never elect a black man because we are racist." If Obama does win then his worldview will be shattered. So Wright is trying to hold onto his hate at all costs even if it destroys his parishioner. A black man in the highest job in the world challenges all of Wrights prejudices and deeply held beliefs about America.

Visa Beats by 6 Cents: International Growth Looking Great

It seems that Visa may be hitting on all cylinders.

The company's profit rose 27.6% to $314 million, or 39 cents per share, during its fiscal second quarter from $246 million, or 93 cents per share, in the year-ago period. Revenue climbed 22% to $1.45 billion from $1.19 billion.

Adjusted earnings, which exclude special items, were 52 cents per share, far exceeding the average analyst estimate of 46 cents per share, according to Thomson Financial.

They cited international growth and the increased use of Debit cards as their growth drivers. I wonder if this growth will ramp up as the economy starts to recover?

Spending on Social Status Different for Different Races

This is a very interesting article by the Economist on why people spend for status instead of for their own well-being.

Erik Hurst, Kerwin Charles, and Nick Roussanov found many people view their consumption as a signal to others. Further, black and Hispanic Americans are more likely, after controlling for permanent income, to spend a greater share of their wealth on conspicuous forms of consumption such as automobiles, clothes, and jewellery. To fund this spending, they often forgo more beneficial goods such as health care, education, and future consumption, i.e. saving. They found the conspicuous consumption motive can explain as much as 50% of the Black/white wealth gap, after controlling for income.

The interesting part is that richer people actually stop conspicuous consumption after a certain point because it actually makes them look poor. It also seems that when a minority group as a whole gets richer they move away from conspicuous consumption. The authors of this study also found that Hispanic communities that are affluent spend less on conspicuous consumption then poorer communities.

I wonder if average wealth in a community affects political affiliation of minority groups in that community as well? So would richer blacks and Hispanic communities turn to the GOP because they would be more interested in their capital gains taxes being raised, affording good health care, or the liberalization of colleges that they pay $50K+ a year for rather then being able to afford Gucci sweatpants or a diamond studded watch?

Keith Olbermann wants Hillary Dead!

Now you know this election cycle is getting nasty when a lefty like Olbermann says stuff like this:

"Yeah, somebody who can take her into a room and only he comes out."

I agree with this blog that if someone said this about Obama then it would sould pretty bad. It might even lead that person to lose their on-air job. The hate that Olbermann has knows no boundaries.

Rice Prices up 300%

It seems like it is a self-fulfilling shortage caused by speculators. Just like oil we have slack demand but supply is stopped even by a few 100K barrels for a few days and the price goes to an all-time high. In rice we have panic buying and hoarding by both the individual and governments and that is what is driving the price strait up.

After this week's over five percent jump rice prices stand nearly three times higher than the start of the year. With no sign of the rally relenting, as traders expect more buyers to come into the market, government anxiety about social unrest from the soaring cost of Asia's staple will deepen.

The price goes up due to speculation. Then Asian governments fearing rioting overreact and put curbs on exports and start hoarding their rice. Then we end up having record prices. It is all a self-fulfilling prophecy.

Microsoft Talks Tough on the Yahoo Deal

I guess $31 is now MSFTs final offer.

"As outlined in our recent letter to the Yahoo board, unless we made progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives," Liddell said.
"These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities," either from internally generated growth or growth through acquisitions, the Microsoft executive said.

If MSFT pulls their offer we could see Yahoo go back into the $20-$19 range I would think.

It Seems the Israelis Bombed a Syrian Reactor

Ah now we know why Israeli Jets were inside of Syrian Airspace on Sept. 6. I love how the Syrians spun it to make it look like their aircraft caught the wayward Israeli warplanes who dropped their bombs in fear. Too bad the Syrians didn't mention what they dropped their bombs on. I think this will happen again as Iran gets closer to the bomb.

The reactor was destroyed by Israel in a September 6 air strike that was initially shrouded in secrecy out of what the Bush administration said was fear that public discussion could prompt Syria, which has long supported militant Palestinian groups, to retaliate.

Hillary Loads up the Truck with Campaign Moolah

After her 10% win in Pennsylvania (Bah, I was off by 2%) the Democratic Money Pipe has opened up for her again. She still trails Obama's in the money race by a large number.

Clinton said donors had contributed more than $3 million to her candidacy in the hours since her Pennsylvania victory, some of it from thousands of new donors. Her campaign said she was on track for raising $10 million in the first 24 hours after her victory.

Financial reports on file with the Federal Election Commission underscored her need. Obama showed more than $40 million in cash on hand as of April 1, while her debts of $10 million exceeded her cash of just over $9 million.

Yahoo is Done For!

There is no way they are going to fend off Microsoft now since their numbers were only marginally better.

Net income rose to $542 million, or 37 cents a share, from $1.2 billion, or 10 cents, in the corresponding period a year earlier. On the continuing-operations basis used by analysts, however, earnings for the latest period were 11 cents a share, 2 cents above the consensus estimate reported by Thomson Reuters.

Sales excluding traffic-acquisition costs were $1.4 billion, up 14% from $1.2 billion during the year-ago period. Analysts had expected sales of $1.3 billion.

So basically it was a 2 cent beat and a 14% revenue bump from last year. These are not the earth shattering numbers that they needed to get Microsoft to sweeten their deal. So it looks like it will be a proxy fight for $31 a share and Microsoft will win. I wonder how well a Microhoo (I like Yahoosoft but that won't happen) will actually compete with Google?

My Prediciton for the Penn Primary

I think Hillary wins it by 8%. She will spin it as a great victory and Obama will shrug and go on to the next primary. I also think things get alot dirtier as we approach June and the Clinton people get more desparate.

Hillary Would "Obliterate" Iran if She's Boss

That is after the Iranians launched a first strike on Israel of course.

"I want the Iranians to know that if I'm the president, we will attack Iran (if it attacks Israel)," Clinton said in an interview on ABC's "Good Morning America."

"In the next 10 years, during which they might foolishly consider launching an attack on Israel, we would be able to totally obliterate them," she said.

Hillary would actually lay down the goon hand to bad millions of Jews would already be dead. It seems that detering Iran from getting the bomb, by stick or by carrot, is not something she is going to do if she is President. It seems her policy is detente-by-bombing-into-the-Stone-age just like we had in the Cold War. Well, at least one good thing came out of that sniper fire she took in Kosovo all those years ago. It has made her "born again hard."

Leslie Bennetts is one Hate Filled Woman

I agree with Dr. Helen when she says that Leslie Bennetts is mean bastard and that her husband Jeremy is a Saint to put up with a monster like her.

And yet everyone acts as if Jeremy deserves some kind of medal just for making a run to the supermarket. No one has ever suggested that I’m a heroine for doing the things every mother is expected to do. I admit that my husband helps out more than many men, but here’s another news flash: It isn’t because he’s such a fabulously enlightened being. Left to his own devices, he would doubtless park himself in front of the TV like some sitcom male-chauvinist couch potato while I did all the work. The reason Jeremy “helps” as much as he does (an offensive terminology that itself suggests who’s really being held responsible) is simple: He doesn’t have a choice.

I have never read such a hate filled rant that is directed toward someone she supposedly "loves" enough to marry. Also she really lays into doing everyday chores and parenting tasks (scut work she calls it) like they are far beneath someone like her. Why doesn't she just spring for a house cleaning service and hire a nanny so she doesn't need to engage in a life-or-death power struggle over chores. She then doesn't have to lower herself to holiday cooking and remembering to buy mosquito netting for her hated son. This part takes the cake though:

Unfortunately, all too many women are still teaching their children that “woman is the nigger of the world,” as John Lennon and Yoko Ono put it so memorably in a song lyric years ago. And what too many fathers teach their sons and daughters is that men can get away with dumping the scut work on their wives, and that women will grit their teeth and put up with it.

I was just shocked to see her put a racial epithet (via a quote) into an article about sharing chores. These are the mundane tasks of everyday life and not 1000 years of oppression and misery. If you think she has it bad be a housewife in Taliban-era Afghanistan. That is a *real* slave.

I really think that a hateful shrew like this should not have married at all. She would have been better off lording it over her cleaning staff and berating random men then subjecting some poor man to her venomous presence.

Teens Feeling the Recession Pinch

They seem to be spending less and going for the sales alot more then they did in the past.

But new trends show that teens are going frugal, shopping at thrift stores, and cutting back on spending in general. Not only are they getting less money from their parents, but they're also earning less money, since teen hiring has dropped by 5% since March 2007. Some are saying this could be the worst teen retail slump in 17 years, with high gas and food prices finally triggering teens to go retro and look for sales.

This trend is good for stocks like Aeropostale which is known as the sale priced teen retailer. This article points out that their 2 for $20 sales that seem to be pushing their same-store sale numbers up. They also seem like pretty decent items for the most part and aren't really cheapy looking at all.

Also Buckle seems unaffeced because they sell to higher end teens who don't slow down their shopping patterns due to the high cost of gas and food prices. Looking at their sites it seems that Aeropostale has some pretty decent stuff at very reasonable prices. Also Buckle looks like a more trendy place filled with more hipster styles.

The funny thing is that many of their polo shirts which I use for work are somewhat reasonably priced at $40 while Abercrombie is selling their polo's for about $50 or so. Buckle also has a number of shirts that are from different companies like Quicksilver, Billabong, Hurley etc. that are not the Buckle brand as well. It seems like a good idea to provide floor space to sell a product that another company has to shoulder the costs of creating. I guess the high end and the low end are the only decent growth areas in retailing and teen retailers are no different.

Hillary Looks Strangely Regal in this Picture

Hmm, this is a very interesting picture. It kind of makes her look, dare I say it, presidential. I think that colorful scarf is what does it. Knowing Hillary's propensity for lying it was probably Photo Shopped to take out the Hammer and Sickle in the background.

The 20 Man Battle Royal at the Church of the Holy Sepulcher

People went ape at the Church of the Holy Sepulcher on Sunday.

It erupted when Armenian clergy kicked out a Greek priest from their midst, pushed him to the ground and kicked him, according to witnesses.

When police intervened, some worshippers hit them with the palm fronds they were holding for the religious holiday. The Eastern Orthodox churches, including the Armenians and Greek Orthodox, follow a different calendar from Western Christians and celebrate Easter next Sunday.

What would Jesus do? He probably wouldn't "stomp a mudhole in a guy" if he got into the wrong part of the Church of the Holy Sepulcher. Also hammering a police officer with a blessed palm frond also seems like something anti-Christian as well. I think these Armenian Priests should be given some kind of Holy Demerit or something.

Google Blows Out the Numbers: comScore Looks Stupid

Just as I suspected Google is hitting on all cylinders and they strait-up smashed the numbers.

In a conference call for investors, Schmidt said that Google's search, ads, and apps strategy has had a transformative effect on the company's business.
"We're showing fewer but much better ads, ... and that's a key part of the Google success story," Schmidt said.
Schmidt also took a moment to dismiss recent reports that Google's paid click growth was flagging. "Paid click growth is much higher than has been speculated by third parties," he said.

I think comScore "paid-click data" should never again be used in the future to gauge Google's quarterly numbers. comScore said that search was supposedly up only 2% from last year and down 9% from Q4 '07. Google, however, said that their paid-clicks showed a 20% increase from last year and a 4% gain from last quarter. That is a *huge* difference. I could understand how analysts took comScores numbers and tried to make a case that ad spending was off due to a recession. I did not agree with these analysts but they did make a compelling case.

The above link has a bunch of back-peddling and ass-covering by comScore but I am going to side with Google on this matter. Google knows exactly which clicks get turned into cash. They also seemed to pull another head fake on Wall Street. ComScore, however, strait-up blew it when they didn't clarify their numbers at the same time as when they released them. From the look of things they were just dead wrong and should lose any further "tea-leaf status" when it comes to their Google so-called "paid-click" predictions.

United Airlines Kicks an Orthodox Jew off the Plane for Praying

I guess it is time to boycott United Airlines because this has to be one of the more egregious acts of intolerance I have seen in a while.

When flight attendants urged the man, who was carrying a religious book, to take his seat, he ignored them, Brafman said. Two friends, who were seated, tried to tell the attendants that the man couldn't stop until his prayers were over in about 2 minutes, he said.

"He doesn't respond to them, but his friends explain that once you start praying you can't stop," said Brafman, who was seated three rows away.

When the man finally stopped praying, he explained that he couldn't interrupt his religious ritual and wasn't trying to be rude. But the attendants summoned a guard to remove him, said Brafman, a writer who had been visiting New York to talk to publishers.

He had to ignore them because an Orthodox Jew that starts praying is not supposed to stop until he is done. He even explained the situation after he was done but the stiff-necked flight attendants had a guard remove him anyway. They couldn't show the guy even a little bit of tolerance and compassion and had to lay the smack-down. I think they should make these flight attendants take a "religions of the world" class or something so they can recognize what is happening.