Blue Chips in the Red: Kodak

Part 2-of-2:
The company has few trump cards left, that may be strategically played to buy them just enough time to stage a come back. Kodak has intellectual property that gives them the ability to earned licensing fees from, amounting to nearly 1.9 billion over the past three years. Although it brought in only $27 million in licensing fees in the first half of 2011, they anticipate yielding over $340 million in the first quarter of this year. Nevertheless, there has been a shift in their strategy, as Associated Press reported that the company is trying to sell its patents, which are said to be valued somewhere in the area of $2 - $3 billion. This may be to stave off bankruptcy, or perhaps to sustain the company through a bankruptcy protection.

In the past decade, Kodak had taken steps to shift its primary business to meet the demands of the technology revolution. Kodak had invested hundreds of million of capital in a new software for workflow, in addition to new home printing products, particularly photo printers and commercial inkjets. The company was all set to surpass their breakeven-point in 2005.

The CEO, Perez, had high hopes that 2013 would be a turning point for them with their new line of inkjets, their licensing and workflow software, but it is clearly faced with a myriad of business concerns weighing them down. The Wall Street Journal reported that three of Kodak's Board of Directors resigned in recent weeks, and Kodak is preparing to file for chapter 11 in the coming weeks. With the resignation of nor one, but three board members, it seems that there may be a disagreement about what strategy to use to steer the company back to being a top contender in its field.

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The Cohn-Reilly Report

Check out the new Music and Art Forum on BlogSpot! "Its a refreshing departure from economics...... it's like life's little desert snack."doARTorDIE

$700 Million Bank Heist: SEC files charges

Did Citbank swipe $700 million from investors? Well according to an SEC filing, which alleges that Citibank sold securitized housing bonds, which they knew were sub-standard, and bet against them, something is definitely amiss. It’s easy to see why Banks are no longer seen as a safe place to invest your money, as a depositor or shareholder.

Citibank, being charged with fraud, is fighting the charges, but Recommended settlement of $285 million is likely going to stick. The SEC asked a federal judge to approve the amount, citing that $285 million would not unfairly punish the shareholders, who were essentially victims of the bank's unethical acts. Of the $285 million, the settlement breaks down as follows: $95 million is the fine, $160 million in for ill-gotten profits and $30 million in interest. We're about 18 months post signing of the Finance Reform Bill, and we're still unraveling the spoils of unbridled greed.

The national Occupy Wall Street Protest was founded on just this type of offensive conduct. I had a feeling that the near collapse of our financial markets in 2008 was the tip of the iceberg, and so far it has proven to be true.

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The Cohn-Reilly Report

Check out the new Music and Art Forum on BlogSpot! "Its a refreshing departure from economics. it's like life's little desert snack."doARTorDIE

Geithner Joins EU Finance Ministers in Poland

Germany’s Chancellor, Merkel met with the Prime Minister of Finland on Tuesday, where I would have liked to have been a fly on the wall, given the growing concerns about several members of the Union. The Finance Ministers are gearing up for their meeting on Friday, with U.S. Treasury Secretary Geithner in tow.
Perhaps this is a smart move for the European Union’s Finance Ministers, considering what’s at stake. We can’t ignore the fact that Geithner has first had experience in helping to save a major economy from “falling off a cliff “in 2008. All while maintaining a cool, “everything is in control” façade, avoiding fear and panic, which would have caused total mayhem.

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DOW: Tripple Digit Gains – 9/14/11
It is believed that the Merkel, Germany’s Chancellor strongly declared the EU’s commitment to resolving the issues surrounding Greece’s fiscal troubles. Germany and France are applying pressure in an attempt to urge Greece to implement additional austerity measures.
The Dow Industrial Average closed up 140 point to yield 11, 246.73

Parents & Kids Check Out Great Math Site: Math Club

New Jobs Growth in December. Highest one-month increase in a decade:

There were reportedly 297,000 jobs created in December, according to the ADP National Employment Report. Raising news hopes and aspirations for the U.S. economy. "Great News" I thought, Kudos to the White House, who had been saying all along that it will take some time, but we should begin to see the fruits of their stimulus programs soon. Soon was longer than we were willing to wait, as the midterm elections spoke volumes about the voters’frustration, and the President's popularity declined. As the employment data came trickling in from Bureau of Labor Statistics (BLS) the "jobs created" number for December was much less impressive. In fact, it was below expectations.

I read several articles and reports and found many different approaches to how these figures were stated. It is easy to see how this could be confusing to the average citizen. Perhaps the discrepancy was in the "gross" jobs created versus "net" jobs created. I read a few reports from the BLS's Unemployment Statistics for December (which was like deciphering the DeVinci Code) and verified that the drastic drop in jobs growth was due to the nearly 200,000 jobs that were lost last month - bringing the net increase to 103,000. Meanwhile, the relatively big drop in the unemployment rate was due to those who are no longer receiving unemployment benefits, thus no longer included in the unemployment "count". This is unfortunately a warped way of accounting for the unemployed. For a while there was a movement to establish a better accounting system for deriving more realistic figures, but that seems to have fizzled.

We have seen the Retail market rebound, the Stock Market flourish, Tourism explode and record Corporate Revenues, but the Unemployment Rate remains a sore spot, and the source of much criticism of the Obama Administration.

Say what they want, there were actually 297,000 new jobs created in December and that illustrates that businesses are feeling better about the future stability of this country. With 12 straight months of job growth, and 1.3 million new jobs created in 2010, we can safely say that Corporations are no longer sitting on cash, reluctant to expand their workforce. The economy is gaining traction, and the Republicans will not be able to take credit for this one. Let's Hope that this is finally a true sign of better days ahead.

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Milton Wolf's Global Forecast

The world crisis is a problem for politicians and economists alike. Politics has used the crisis to their advantage in some cases. In the US careers have been made and destroyed as a result of this serious global financial discord. According to Milton Wolf the U.S. is in recovery. Wolf went on to say that the financial System has been saved, lead by the feds and very aggressive policies. "The CentralBank has done a good job managing the global crisis. In aggregate, we saved the financial system, and the Central Bank has been aggressive to keep the banks liquid. The Central Banks have ignored the criticism, and they have brought us to recovery"

That said, there needs to be some adjustment in the EU Zone. Members of the European Union had indulged in a lot of bad lending and borrowing practices. This is illutrated by the spreading financial troubles in Portugal, Belgium and Spain, after bailouts offered to Ireland and Greece. The EU Zone (with the help of IMF) has provided just enough money to avoid defaults. Given the financial crisis, the Euro, may cease to exist anytime soon. The world crisis is a problem for politicians and economists alike. Politicians has used the crisis to their advantage in some cases. In the US careers have been made and destroyed as a result of this serious global financial discord.

Listen to Milton Wolf's view of the Global Economy, and what can we expects. Click Here

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A Call to Action

Ben Bernanke indicated that the sluggish economy and other economic markers make the case for “ further action”. The Fed Chairman warned that the next move would depend on the incoming data on the economy. Other Fed official are weighing in indicating they are looking for more “quantitative easing”, but most on Wall Street anticipate the Federal Reserve to purchase long-term Treasury bond as a step toward monetary action.

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