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The Next Eastman Kodak Co. (NYSE: EK): Companies Headed for Bankruptcy in 2012
Eastman Kodak Co. (NYSE: EK) filed Chapter 11 early this morning (Thursday), becoming one of the first to file among the staggering number of U.S. companies headed for bankruptcy this year.
The Rochester, NY-based company, started in 1880, has been bleeding money since consumers ditched film for digital photography. Eastman Kodak listed assets of $5.1 billion and debt reaching $6.8 billion in its U.S. Bankruptcy Court filing.
"They were a company stuck in time," Robert Burley, an associate professor at Toronto's Ryerson University, told Bloomberg News. "Their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability."
Kodak stock had fallen more than 35% by 2:00 p.m. today, bringing its total slip for the past year to more than 93%.
Three Reasons Yahoo Inc. (Nasdaq: YHOO) Could Rally Without Co-Founder Jerry Yang
Seventeen years after starting one of the first Internet content companies, Yahoo Inc. (Nasdaq: YHOO) co-founder Jerry Yang resigned yesterday (Tuesday) – giving Yahoo a fighting chance of rising from its dismal decline in the tech world.
The departure of co-founder Yang, who also served as CEO from June 2007 to January 2009, marks the latest casualty as Yahoo strives to compete against more modern tech companies. Yahoo two weeks ago announced it had chosen a new chief executive officer – Scott Thompson, most recently president of eBay Inc. (Nasdaq: EBAY).
Shareholders have been pushing for Yang's exit as search leader Google Inc. (Nasdaq: GOOG) and social media giant Facebook Inc. have dominated markets in which Yahoo failed to gain traction.
Still, Yang's decision was a surprise because of his deep personal attachment to the company.
"Jerry's thrown in the towel," Colin Gillis, a BGC Partners analyst, told Bloomberg News. "He founded the company – this is his baby."
How to Put a Touch of Glory in Your Life
[Editor's Note: Alex Green is one of our favorite writers. He has the rare talent to be able to turn a simple story into genius. In this story that ran in Spiritual Wealth on Friday, Alex explains why attitude really is everything. We hope you’ll enjoy it as much as we did.]
Dear Reader,
There's an old story about a man who walks by a construction site and sees workmen pushing wheelbarrows, each filled with an enormous stone.
He asks one what they're doing.
"What does it look like?" he says with a sneer. "Hauling rocks."
Unsatisfied with that answer, the passerby asks another construction worker the same question.
The workman doesn't bother looking up. "We're putting up a wall."
Frustrated, the man tries one last time. "I say there," he asks the next fellow, "can you tell me what you men are doing here?"
The workman puts down his wheelbarrow, wipes his forehead and says with a broad smile, "We're building a cathedral."
How to Win Bernanke's War on Savers with a 19% Yield
There is no other way to put this… With his zero interest rate policy (ZIRP), U.S. Federal Reserve Chairman Ben Bernanke has declared a virtual war on the nation's savers.
That's why savings-conscious investors have been forced out into the markets these days in search of higher yields.
Between 10-year notes offering yields under 2% and CD rates hovering near 1%, savers have been left little choice.
It is one of the reasons why high-paying dividend stocks have been in demand ever since the ZIRP crisis began.
For savvy investors looking to boost their yield, there's only one place to look…
They're called mortgage REITs, and they offer investors the chance to collect some of the highest dividend yields available today.
In fact, one of these investments is actually paying a 19% yield, right now!
That's not a typo. Double-digit yields like those really can be found if you know where to look for them.
I'll tell you more about this company in a moment. But first I'd like to explain to you what mortgage REITs are all about.
Mortgage REITs Explained
Real Estate Investment Trusts, or REITs, came into existence because of U.S. President Dwight Eisenhower's "Cigar Tax Excise Tax Extension" of 1960. Under this initially obscure tax provision, REITs can avoid corporate income tax, provided they invest in real estate-related assets and pay out at least 90% of their income in dividends to investors.
Mortgage REITs, as their name suggests, invest in residential and commercial mortgages.
Within the residential mortgage REIT category, some invest in agency-guaranteed REITs while others specialize in REITs that are not guaranteed.
Given the recent default rate on home mortgages, investors would be wise to concentrate on guaranteed agency mortgage REITs. This is due in part to Ben Bernanke's monetary policy since 2008.
Let me explain…
Goldman Sachs Group Inc. (NYSE: GS) Earnings: How the Mighty Have Fallen…
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Crisis in Europe: Prepare for Repercussions from Standard & Poor's Credit Rating Downgrades
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If You're Out of Work Blame Your Cell Phone
Times are tough out there.
We would like to blame China, incompetent politicians, Federal Reserve Chairman Ben Bernanke, the banking system, or some unseen forces for this phenomenon.
But in reality, the answer is no further than our pockets. The real culprit is your cell phone.
The arrival of these gadgets changed everything…
That's because before the cell phone boom, it was very difficult to run an efficient international outsourcing operation. Until then, there were no means of communicating between different offices other than fax, telex, and the balky international telephone system.
Consequently, these communication barriers made manufacturing products overseas cumbersome and expensive.
And since there were relatively few outsourcing operations at the time, there was also an acute shortage of skilled employees in poor countries, making a difficult situation even worse.
As for competition, there wasn't much. That meant the jobs of workers in rich countries were still relatively secure.
But not for long.
Starting in 1995, the Internet and the modern telecommunications revolution changed everything.
The Race to the Bottom
Suddenly, these same barriers began to come down. The job market was changed forever.
Now it was possible to communicate on a real-time basis with factory or service operations in poor countries all across the globe. Outsourcing had been born.
At about the same time, the retail behemoth Wal-Mart Stores Inc. (NYSE: WMT) discovered a China and the price advantage it could gain by manufacturing goods overseas. Wal-Mart's new world began to take shape.
Goods could now be designed by Wal-Mart, made to Wal-Mart's specifications and delivered to Wal-Mart stores in just a few weeks, enabling the retail giant to keep up with trends in fast-moving markets.
The rest, as they say, is history.
There was only one problem. This sea of change wasn't self-limiting.
To continue reading, please click here…
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Why Weak Earnings Today Could Turn the Bulls Loose Tomorrow
Everybody is hoping for a swell earnings season on the assumption that it will help the markets move higher.
However, if history is any guide, weaker earnings may be just what the doctor ordered.
Here's why.
Obviously we don't want a disastrous set of numbers, but downbeat earnings and guidance actually creates the possibility of more positive surprises that will encourage money to move into the markets instead of away from them.
Think of it this way: When things shift from good to bad there's a distinct aversion to risk and assets flee like they did following the "dot.bomb" blowup in early 2000 and at the onset of the financial crisis in 2007.
But when they go from bad to less-bad, it's human nature to assume things are improving. And that sentiment brings out the bargain hunter in all of us while also drawing money into the markets. That was the case in mid-2002 and just after March 2009, when people were hoping for something – anything really – to get the juices flowing again.
Winning the Expectations Game
Wall Street understands this psychology better than you might imagine. That's why m anipulating earnings and analyst expectations is a science in and of itself.
Everybody denies it happens, but ask nearly any seasoned Wall Streeter and you'll get a sideways glance and a knowing smile.
The wall that supposedly separates the research, investment banking, brokerage and trading functions of any given firm is a plumber's worse nightmare, depending on your perspective.
Former analyst Stephen McClellan notes in his book "Full of Bull" that this is how the game is played.
He says that's why it's important to do what Wall Street does rather than what it says as a means of securing your personal profits.
I couldn't agree more.
Having spent more than 20 years closely involved with the markets, I've learned that Wall Street's blinders, miscues, set-ups and secrets are often more telling than the "telling" itself.
Consider what's happening right now.
According to Standard & Poor's, analysts have raised projections for 366 companies while lowering those associated with another 534 companies. In other words, lowered expectations out number rising expectations by almost 2:1. Bespoke Investment Group notes that all ten S&P sectors have had more negative revisions than positive.
That's in stark contrast to two years ago when analysts were positive at the onset of 2010 for roughly 80% of the market with the exception of healthcare and utilities. Both were viewed as little more than bastard children and cast as negative performers.
As you might expect, many investors bailed out of the latter while rushing into the former. But that turned out to be a mistake — healthcare and utilities were the best performing sectors in 2011.
This doesn't always happen, but it's well documented that Wall Street often says one thing and does another. You'd think at this stage of the game things would be different, but they're not.
The Four Hottest Trends from the 2012 Consumer Electronics Show
The 2012 Consumer Electronics Show (CES) in Las Vegas, NV wraps up today (Friday) after setting the stage for this year's hottest tech trends.
The 3,100 companies in attendance have launched about 20,000 new products since the tradeshow opened on Jan. 10. They range from everyday items like new smartphones to crowd-wowing flying cameras.
Besides companies using the venue to introduce consumers to their hottest new products, this year's Consumer Electronics Show highlighted the materials and capabilities that will dominate the tech world in 2012 and for years to come. The prototypes and early models that debuted this year are the first versions of technology destined to change not only our consumer experiences, but eventually redesign our households and even our nation's military strategies.
Here are four of the most important trends from the 2012 Consumer Electronics Show setting the stage for the future of tech:
Shaping the Future of Tech
1. Gorilla Glass: This game-changing material by Corning Inc. (NYSE: GLW) is lightweight, damage-resistant, and dominating new products that rely on thinner glass for optimal use.
"The Gorilla Glass breakthrough is important because we are moving to a touch-screen world," said Money Morning Defense and Technology Specialist Michael Robinson. "Thinner glass is integral to technology that will greatly enrich the user experience of smartphones, ultrabooks, TVs, and ATMs. The thinner the glass, not only the smaller the electronics, but the more responsive and accurate the screens become."
Robinson has detailed industry-defining innovations like Gorilla Glass in his Money Morning series, The Era of Radical Change.
While Gorilla Glass was showcased in smartphones and laptops at the Consumer Electronics Show, Robinson said the material's importance goes beyond these everyday items.
"We are moving to the Japanese model in which a wide range of products typically sold in stores now come to consumers through vending machines located everywhere," Robinson said. "You'll control them with a smartphone or with touch screens depending on consumer preference. I predict a flood of new vending machines will hit the U.S. in the next five years that will need tough glass to deal with thousands of consumer purchases a day."
2. Ultrabooks: With traditional laptop sales plummeting, and tablets last year's hottest CES export, companies have combined a computer's operating capacity and a tablet's size to create ultrabooks, the latest phase in personal computing.
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