Apple. My lord.
I feel like just mailing them all my money, getting it over with now, and moving forward. Their products are too good. You win Apple. Uncle.
For those that missed it, in an earnings release last night, Apple reported that their quarterly results for the fourth quarter of 2011 OBLITERATED Wall Street’s projections. Blew them out of the water. They’re making money faster than a quarterback prospect being recruited by SEC schools.
In the fourth quarter alone, Apple sold 37 million iPhones. Aggressive expectations were that they sold 30 mill. 15.4 million iPads sold, again, demolishing expectations. 46.3 BILLION in revenues in the quarter. And they are sitting on 100 BILLION in cash!!!!! All during the heart of the greatest American recession since The Great Depression. Amazing!
Reminds me of one of my favorite Steve Jobs quotes:
“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”
And man are they opening them Steve. Apple has now sold 183 million iPhones. A survey recently showed that 45% of the people that bought a smartphone in December bought an iPhone. Others showed that the iPad is making people increasingly comfortable with replacing home desktop and laptop computers with tablets. And startlingly, 72% of Apple’s revenues now come from the iPhone and iPad, neither of which existed five years ago.
There’s no stopping this freight train either. Whispers are that the iPhone 5 will be SERIOUSLY enhanced. iPad 3 is set to come out in the spring. And the very-secretive Apple is said to be VERY close to entering the TV market, looking to continue to imbed their products into the lives of Americans, tying together their phones, their computers, and their television – by far the three most used electronic devices in this country.
The Tigers signed Prince Fielder. You got to be freaking kidding me. The signing incited predictable fan outrage on Cleveland sports sites like www.theclevelandfan.com and on Twitter.
And it’s hard to blame fans. The deck is so stacked against this Indians team. It’s bad enough the Angels and Rangers are spending hundreds of millions of dollars on free agents this off-season to improve already excellent teams and the Yankees and the Red Sox will have payrolls more than three times higher that the Indians. But now you have the Tigers, in our division, who have added one of the most feared sluggers in baseball for the next nine seasons – all while the Tribe tries to find ways to free up an additional million bucks so they can make a run at some Mickey Mouse chump like Casey Kotchmann on a one-year deal.
It’s hard for fans to understand. They see Detroit as being a geographically close, same sized, crappier version of Cleveland. “How can they do this and we can’t?!?!?!?” Here’s how. Their metro market is twice as big as ours. They’ve outdrawn us in attendance by 2 MILLION fans the last two years, which equates to about 50 mill a year. And they have an owner that is willing to lose money on the team each season.
It’s that simple. And it is what it is.
And it’s not like we did nothing this off-season. We traded for Derek Lowe “expectations”. Re-signed Grady (I think I hurt my knee just typing that). And traded for Kevin Slowey and signed Ryan Spilbroghs to a minor-league deal. Take that Detroit.
Quote of the Day …
“The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” ~ Ronald Reagan
Market …
Apple, The Fed, and the State of the Union. That’s what the markets are focused on.
Apple – we touched on them above. They destroyed earnings estimates and should set a positive tone for the stock market as a whole this morning ahead of the Fed statement.
The Fed – they release their policy statement at 12:30 PM EST, their economic forecast at 2:00 PM EST, and then Big Ben Bernanke will speak with the media after that. And in addition to its economic forecast, the Fed will now report the forecasts of its individual members for their Fed funds rate targets. Many economists expect the forecasts to mainly show the Fed will be on hold until mid-2014, as opposed to its current stated time frame of mid-2013. The markets will be looking for hints of a potential third round of quantitative easing in the statement, and then from Big Ben in the press conference this afternoon. But because of a gradually improving economy, most Fed watchers believe the central bank will hold policy steady and not engineer a third round of bond purchases at this meeting. The most likely scenario is that the next round of asset purchases would come at the next meeting on March 13 and would be almost certainly aimed at Fannie and Freddie mortgage-backed securities in an attempt to keep mortgage rates low to help spur home purchases and refinances.
The State of the Union – Man is Obama a good speaker. Smoothest since Clinton. He is very good at giving speeches, resonating themes with “Joe Voter”, and making it seem like doing anything other than what he proposes is lunacy.
The speech was pretty much dead on what we predicted out of it yesterday. An extremely populist tone to it. Very political in nature and the clear start to the Obama re-election campaign. Almost conceding in tone that nothing bi-partisan will get done this year.
After he successfully used “Hope and Change” as the slogan for his election campaign, we heard last night what I believe will be the slogan for the Obama re-election campaign: “An America Built to Last”. We heard him talk about all the issues that will be the bedrock themes of his campaign: manufacturing, job training, job “insourcing”, clean energy initiatives, and tax reform that sees the tax rates of corporations and wealthy Americans increase.
On the mortgage side of things, Obama finally responded to Big Ben Bernanke’s white paper on the housing problems in America by saying this:
“Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief. That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.”
According to senior Obama administration official, that “small fee on the largest financial institutions” that is proposed to cover the entire cost of this plan would be charged to financial institutions with more than 50 billion in assets. Obama has proposed a similar fee on financial institutions twice in the last two years. Both times the proposal wasn’t taken up by Congress. Administration officials also said the refinance initiative will also apply to all borrowers, not just the ones with Fannie or Freddie owned loans, with details still to be worked out.
The details are meaningless though. This has zero chance of getting through Congress. I’m talking Roberto Hernandez Heredia chances of pitching the home opener for the Indians chances. Don’t even waste any time thinking or reading about this.
And of course, Obama knows all this. He could have jammed another expansion to the national refinance program though without going through Congress, as he did with the failed HARP I and the just-underway and improved HARP II. But he couldn’t get it financed by the “evil banks” without putting it through Congress, and he also couldn’t expand it to non-Fannie/Freddie loans without Congress. By just doing it himself, Obama also would have shouldered the brunt of the political risk of increasing the credit risk of the federal government, who own and are responsible for any losses from Fannie and Freddie.
So he throws the plan to Congress, knowing it won’t get passed, but also knowing he can campaign saying that he’s been trying to get homeowners help. Politically smart, but not smart for America. In Obama’s defense, he believes doing the politically smart thing will help get him four more years in office, where he believes he can help Americans on a number of different levels.
News …
~ Defiant Obama Challenges Congress on Sticky Issues
http://www.cnn.com/2012/01/24/politics/state-of-the-union/index.html
~ Obama Answers Bernanke’s Plea with Refinancing Plan
~ Apple Obliterates Earnings Expectations, Has Record Quarter
http://www.reuters.com/article/2012/01/24/us-apple-idUSTRE80N2BQ20120124
~ KeyCorp, First Merit Both Report Profitable Quarters, Years as Lending Continues to Grow
http://www.cleveland.com/business/index.ssf/2012/01/keycorp_firstmerit_both_report.html
~ Apple, FOMC, and More Results in Focus for Markets
~ Apple Shines as Markets Wait for Fed
http://www.cnbc.com/id/46123777
~ Fed Plans Makeover to Soothe Hawks and Doves
~ MBA: US Mortgage Applications Retreated Last Week
Comments