Friday, November 25, 2011

Get Fired Up for Amazon’s Bargain Stock!: AMZN

Amazon (NASDAQ:AMZN[1]) is bringing the heat to the tablet market. The company is projected to sell 5 million Kindle Fire tablets[2] before the end of the year — impressive considering the device will only have been on sale for a month and a half.

However, that number looks more remarkable when you put it in context with the entire tablet market. While Apple (NASDAQ:AAPL[3]) sold 11 million tablets during this year’s third quarter, all other tablet makers combined sold just 1.2 million devices[4] between January and October — meaning the Kindle Fire might single-handedly have created a competitive tablet market.

Still, big time sales or not, Amazon is taking a hit[5] on every Kindle Fire sold. The device sells for $199 but costs $201.70 to build — and that loss doesn’t count any licensing or royalties Amazon pays on the tablet’s technology. Nor does it consider losses taken on the company’s free shipping offers. Amazon might burn a hole in its pockets with the Kindle Fire even if it’s a success.

And now’s not the time for Amazon to be burning cash, either. In the most recent quarter, AMZN net sales came to $10.88 billion[6], good for year-over-year growth of 44%. However, various costs including Kindle Fire development and manufacturing — as well as new licensing deals with Disney (NYSE:DIS[7]) and News Corp. (NASDAQ:NWS[8]) for streaming video rights — drove net income down. Way down. Net income was down 73% from last year at just $63 million, or 14 cents per share[9], which missed Wall Street expectations by a dime per share. Guidance for the fourth quarter wasn’t promising either, with a wide income forecast of between $250 million and a loss of $200 million.

AMZN shares tanked from a mid-October high above $240 to $195 by month’s end. As of Tuesday — despite a positive Kindle Fire debut week, rumors of a new Amazon smartphone[10] and massive holiday sales projections[11] — Amazon was trading just above $192. That’s still above its 52-week low of $160, but AMZN is heading for its support level of just below $186. All signs say sell and sell now[12].

Before moving those shares, though, it’s important to think about Amazon’s positioning going into 2012. Those millions of Kindle Fires represent more than just strong brand reinforcement, but increased sales for literally all of Amazon’s operations. That device is a handheld portal for Amazon’s core online retail business. Each Kindle Fire comes with a free trial to the Amazon Prime premium subscription service, which, for $79 per year, gives users access to streaming video, an e-book lending library and discount shipping.

It’s estimated that Amazon’s total annual revenue grows 1.5% for every 1 million new Amazon Prime subscribers[13]. Assuming the company sells 5 million Kindle Fires and just 20% of those new customers become paying Prime subscribers, that’s a significant bump in revenue. Even though net income projections for the fourth quarter don’t inspire confidence, sales projections should: Amazon expects Q4 sales of between $16.5 billion and $18.7 billion[14], representing YOY growth between 27% and 44%, respectively.

That uptick in revenue should fuel the company’s ambitions for a while to come. Digitimes reported Tuesday that the company already is preparing two new models of Kindle Fire[15] — 8.9-inch and 10.1-inch versions with enhanced capabilities over the current 7-inch model — for release in 2012.

Amazon is evolving in a powerful way. It is transforming from a retailer that relies on other company’s products, be they phones or PCs, to reach customers into one that reaches customers directly through its own devices.

The Fire is delivering on the promise Amazon’s Kindle business showed when it started in 2007. Amazon already leads online retail and is spending big to place a literal storefront in consumers’ hands under the guise of entertainment. It’s the reverse of what Apple has done with its devices, selling desirable technology first as a gateway to retail. With Kindle Fire on track to sell big in the near and long term, $192 ultimately might turn out to be a bargain for a piece of Amazon.

In Case You Were Wondering Why We Keep Bailing Out Wall Street..

Not that there was any mystery about why the government keeps shafting Main Street and bailing out Wall Street, but in case you had any doubts, this chart excerpt from XKCD should put them to rest.

More than anyone else, Wall Street has the power to hire and fire our elected officials.

So it's no wonder that those officials take care of Wall Street first.

(The Wall Street money, by the way, goes to both sides of the aisle. And that's to be expected. If you're a bank, there's no sense in picking a side when you can just own both teams.)

BNN: Top Picks

Stan Wong, VP & Portfolio Manager, Macquarie Private Wealth, shares his top picks.

click here for video

Survival Sales Jump Amid Worries of “Possible Collapse”

Mac Slavo

What may be new to most Americans is nothing out of the ordinary for our readers. As the economic, financial and political situation around us becomes more dire by the day, people are realizing that if it hits the fan there will be no safety net to assist them. The government is already overwhelmed with nearly 50 million people on nutritional assistance and an estimated 100 million Americans living in or right on the edge of poverty. In a true emergency, be it economic in nature or an unforeseen outlier, there will simply be no way local or federal officials can respond to the needs of everyone in need, something FEMA has repeatedly warned about.

Among the many possible emergency and disaster scenarios, the one that stands out as the most likely is an economic collapse driven by vast amounts of government debt that will never be repaid and a US dollar that is likely on its last leg as the world’s reserve currency . The consequences, if and when we reach the tipping point, will be unlike anything Americans have experienced in recent history. Forecasts of the fall-out from these events include runs on the banks, gas shortages, disruptions to our food supply and commerce systems, and the potential for riots and bloodshed in the streets. By many accounts a hyperinflationary depression cannot be avoided.

According to a recent report from CBS, Americans sense something isn’t normal, and like the government who has been actively taking steps to prepare for an economic breakdown and civil unrest, they are taking their future into their own hands by stocking up on essential supplies like food, self defense weapons and ammunition, and emergency evacuation kits:

A chain of three stores that sells survival food and gear reports a jump in sales to people who are getting prepared for the “possible collapse” of society.

“We had to order fifty cases of the meals ready to eat to keep up with the demand in the past three months,” said manager Steve Dorsey at Uncle Sam’s Safari Outfitters Inc. in Webster Groves. “That’s not normal. Usually we sell 20 to 30 cases in a whole year.”

Dorsey says business has been brisk since the spring uprisings in the middle east, as customers share concerns about political uprisings, the world economy and the future of the United States.

Dorsey says some customers talk of stocking up on freeze-dried meals for the home, while others confide they are stashing supplies at a remote location away from the city where they would go in an emergency.

“There are people that have property and they’ve set up different things they’re building to protect themselves like towers they can stand up and watch,” Dorsey said, “There’s a lot of people I’m dealing with who buy all kinds of stuff because they have like twenty or thirty people going in on this together and they’re all going to go to this one spot if something like this happens.”

Source: CBS

Though the number of Americans preparing for disaster is probably one in a hundred or less, one thing is for sure. Those who fail to prepare now will be wondering how they could have missed the signs once it all goes down – but by then it will be too late.

When it comes to preparedness and planning, it’s better to be a year early than to be a day late.

25 Bitter And Painful Facts About The Coming Baby Boomer Retirement Crisis That Will Blow Your Mind

For decades we were warned that when the Baby Boomers started to retire that this country would be facing a retirement crisis of unprecedented magnitude. Well, that day has arrived ladies and gentlemen. Back on January 1st, the Baby Boomers began to retire and more than 10,000 of them will be retiring every single day for years to come. Most of them have not saved up nearly enough money for retirement. At the same time, private sector pension plans are failing all over the place, hundreds of state and local government pension plans from coast to coast are woefully underfunded, and the Social Security system is on the road to complete and total disaster. A massive wave of humanity is hitting retirement age at a moment in history when the U.S. economy is coming apart at the seams. We do not have the resources to keep the promises that we made to the Baby Boomers, and most of them have not made adequate preparations for retirement. What we have is a gigantic mess on our hands, and millions of Baby Boomers are going to find retirement to be very bitter and very painful.

A lot of younger Americans just assume that Social Security is enough to take care of the needs of elderly Americans. But that is just not the case.

Have you ever tried to live solely on a Social Security check?

It is not easy. The truth is that those checks are just not that large.

The following comes directly from the Social Security Administration....

The average monthly Social Security benefit for a retired worker was about $1,177 at the beginning of 2011.

Could you live on less than 300 dollars a week?

And keep in mind that the $1,177 monthly figure is just an average. Many receive a lot less than that.

In addition, Social Security benefits have been seriously squeezed by inflation in recent years. The cost of food and other basics has risen briskly and Social Security benefits have not.

Today, many elderly Americans have to make a choice between buying food, heating their homes or buying medicine that they need. They simply do not have enough money to do all of them.

It would have been nice if all of the Baby Boomers had been busy saving money for retirement all these years, but that just did not happen. In fact, the Baby Boomers as a group are trillions of dollars short of what they need for retirement.

So why doesn't the U.S. government step in to help them out?

Well, the reality of the situation is that the U.S. government is flat broke. The federal government is now over 15 trillion dollars in debt. During the Obama administration so far, the U.S. government has accumulated more new debt than it did from the time that George Washington took office to the time that Bill Clinton took office.

Lawmakers are already looking at ways to make the Social Security program less costly. No, the federal government is not going to be riding to the rescue.

In fact, it will be a minor miracle if the Social Security program is able to survive until the end of this decade, and it will be a major miracle if the Social Security program is able to survive until 2030. (more)

Jim Chanos on Chinese Economy and If He Will Cover His Short Positions

Japan's Post-Bubble Rallies: New Interim Low

Update: Earlier this month Japan's preliminary Q3 GDP come in at 6.0%, which was a substantial gain over the previous three negative consecutive quarters. However, the global financial distress has weighed heavily on the Nikkei 225. Yesterday it hit an interim low, 79% off the all-time high at the end of 1989 and 28% off the interim high of April 2010. The index is currently only 15.7% above its historic low set on March 10, 2009, the day after the US markets hit their Financial Crisis lows.

Here is a look at the Nikkei 225 which gives an overview of the cyclical rallies and their duration during Japan's secular bear market, now in its 21st year.

The table below documents the advances and declines and the elapsed time for the major cycles in the Nikkei.

Nikkei 225 Advances and Declines

Japan's Q3 Real GDP Up 6.0%

The strong recovery in Q3 GDP was an expected rebound following the devastating March earthquake, which sharply reduced private consumption and especially exports. In the preliminary Q3 report, private consumption rose 1.5% quarter-over-quarter, and net exports (exports minus imports) rose a dramatic 13.9% following a -16.5% collapse of Q2.

The GDP rebound is definitely a move in the right direction, but the next chart illustrates the economic challenges that the country faces. The 6% jump in Q3 GDP still leaves the economy 4.4% below its all-time high of Q1 2008.

Even with the Q3 rebound, Japan's real GDP is fractionally below the level of Q3 2010. We definitely want to see more of those green bars in the quarters ahead, but a near-term risk is the potential for reduced demand for Japanese exports stemming from eurozone austerity measures.

45 percent in US struggle to make ends meet

Nearly half of all Americans lack economic security, meaning they live above the federal poverty threshold but still do not have enough money to cover housing, food, healthcare and other basic expenses, according to a survey of government and industry data.

The survey, released on Tuesday by the advocacy group Wider Opportunities for Women (WOW), found that 45 percent of U.S. residents live in households that struggle to make ends meet.

That breaks down to 39 percent of all adults and 55 percent of all children, the group found.

"This is a wake-up call for Congress, for our state policy-makers, really for all of us," said Donna Addkison, President and CEO of WOW.

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"Nearly half of our nation's families cannot cover the costs of basic expenses even when they do have a job. Under these conditions, cuts to unemployment insurance ... and other programs families are relying on right now would push them from crisis to catastrophe."

The WOW survey compared 2009 pre-tax incomes to a budget of basic and essential monthly expenses for various families that it developed along with researchers at Washington University with funding from the Ford Foundation and W.K. Kellogg Foundation.

For example, in a budget for a family of one worker, it put housing expenses at $688 and food at $244. In a family of two workers with two young children, it assumed housing would cost $821 per month and food $707 a month.

It did not include nonessentials such as vacations, recreation, hobbies, college tuition, and other common expenses of the middle class.

A congressional effort to find $1.2 trillion in spending cuts over 10 years failed on Monday, raising fears that emergency benefits for the long-term unemployed would not be extended when they expire next month.

Other social programs including Medicare are also under threat as lawmakers seek to slash the nation's huge debt.

Some economists said while they agreed that the debt had to the reduced, targeting programs that helped the low income group survive the harsh economic environment was not the correct path to take.

"I am in favor of austerity, but not in this area," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. "This is the only austerity going on and this is hitting the long-term unemployed. It's not improving the long-term budget situation anyway."

Currently, the poverty threshold for the United States is an annual income of $22,314 for a family of four.

A little more than 15 percent of the country lives at or below that level, and the group wanted to look at the remainder, "many of whom live on the edge and are chronically at risk of financial crisis or falling into poverty."

More than four out of 10 adult women live in households that cannot cover those basic expenses, slightly more than the proportion of men, 37 percent.

That may be because in 2009 women's median earnings were 70 percent of men's median earnings, the group said.

More than 60 percent of single women live in economic insecurity, it added.

"While married women are more likely to have economic security than unmarried women, much of the stability is attained through a husband's earnings or other household income," the group reported, which can put those women in economic jeopardy if their husbands die or lose their job or if the couple divorces.

The group also found "that full-time work fails to provide economic security for 25 percent of adult workers," because of stagnating and falling wages over the last decade.

"A chief cause of economic insecurity is 1970s level wages that fail to cover modern expenses," it said.

While households with two full-time workers can help boost a family's economic security, 22 percent of adults with children who work full-time and have a partner who also has a full-time job cannot cover basic needs.

At the same time, 21 percent of homes headed by a college graduate lack economic security.

"In the past, threats to economic security were supposedly clear -- dropping out of high school, being a single parent or having a large family. In today's economy, we cannot assume we know who lacks security," it said.

50 Best Bartering Sites For The Frugal

If you think you can’t afford to get nice things, think again. Through the magic of bartering, you can offer your services or even old stuff you don’t want anymore, and in return, get items and services that you do want. In most cases, money never even exchanges hands, and you can get the things you want without ever spending a dime — a perfect idea for frugal students and others. Read on, and we’ll highlight 50 different bartering sites that frugal people can put to work for just about any trade you can imagine.

Plenty of specialty bartering sites exist, but some of the best allow you to trade anything and everything, from cars to games and clothing. Check out these to give and get just about anything.

Freecycle allows you to donate items, as well as get stuff for free in your town.

Create ads and make offers to swap with others based on actual values for items.

Post items you don’t want anymore, get coupons in return, and use the coupons to get items from other members on Swap@Home.

Swap anything, for anything, with both bartering, free, and money-only trades available on SwapAce.

Using U-Exchange, you can “trade anything, pay nothing” in just about any type of trade, including services, home exchanges, and even vehicles.

Trade your clothing, accessories, books, and more on Rehash, where you can join groups, socialize, and perhaps best of all, get new stuff!

An incredibly popular site for everything from hookups to free baby food, Craigslist also has a very active bartering section where you can trade just about anything for no money at all.
Stuff Pal
Lend, borrow, and swap stuff with people you already know through Facebook using Stuff Pal.

Barter Bucks Banc
Traders in the UK can barter any product or service on this online bank.

ReUseIt Network
Become a part of the ReUseIt Network to find ways to make use of items that would otherwise be discarded.

iOffer’s want ads offers a great place to buy, sell, and trade clothing, movies, jewelry, and more.

Swap-Online is a great venue to do a swap meet online, trading items for other things people are looking for.

Trade goods, services, and real estate on this site that allows you to post and trade absolutely free. Trades include dental work, vintage clothes, services, and more.

Dig out some stuff from your attic and use the TradeAttic to buy, list, and trade just about anything for free.


Trashbank encourages users, “don’t trash it, bank it!” on a site where you can barter, swap, trade, buy, and sell online for free.

Junk For You
Junk For You believes that one person’s junk is another person’s treasure, and offers a great way to clear out spaces of junk in return for something you can put to use.

The SwapDen is a 100% free online swap meet where you can even create your own personal wish list to get notified when the items you want are available for swapping.

Give and get stuff for free with no fees, and no hassle on this bartering platform that rewards you with points.


It’s not exactly a swap site, but Zaarly makes it possible for you to name your price for anything and buy it from your neighbors.

In the spirit of white elephant trades, White Willy allows you to list items and make offers on other peoples’ items, getting a fair trade every time.

Get rid of old stuff, and get new stuff for free through Listia, a popular site with more than 2 million trades in their marketplace.

Trade Stuff

On this simple trading site, you can trade your stuff for other people’s stuff, including video games, antiques, and even boats.

You can rent anything online from businesses and individuals, making it easy to use expensive items just for a short amount of time without spending a fortune.

NeighborGoods allows you to share stuff with your neighbors, like a neighbor who needs to borrow a ladder. You can save money by not having to buy items you only need temporarily, and make friends with your neighbors at the same time.

Books, CDs, movies, video games, and more are on the table at these trading websites.

This site offers a great place to swap your stuff, including used books, DVDs, and CDs.

Swap a CD
Trade used CDs, albums, and more on this exchange site that offers a music club and CD exchange.


Give books away, and get the books you want through the BookMooch site.


You can easily swap books with other readers on this site that’s lauded for its simplicity, and “more available books than the largest Barnes & Noble.”
On, you can list books, CDs, movies, video games, and more that you want to trade, and you’ll get credit to buy other items in return.

Swap a DVD
Join this movie club to swap, trade, and exchange DVDs for free, listing your used movies and choosing from thousands of available DVDs.

Swap Simple

Exchange used textbooks, DVDs, video games, and other hot items on Swap Simple, and put together a wishlist for items you’d like to see available for swapping.

Game Trading Zone is a community of traders where you can exchange things for other things, especially video games. Even better, this site has been around for more than 10 years with plenty of experienced traders.

Paperback Swap
Swap paperbacks and more with this free online book swap site, just by listing books you’d like to swap, sending them out, and choosing from millions of available books.

On Goozex, you can play games, trade games and movies, and save money while playing video games.

Need to clean out your closet and refresh your wardrobe? Get them both done at the same time by swapping clothes on these sites.

Clothing Swap
Declutter, find a Clothing Swap event through the website, and have fun while you get pampered as you find awesome new clothes and get rid of your old ones.

Dig N’ Swap
Swap fashionable clothes by sharing pictures of clothes you don’t want or need anymore, and dig for stuff you really do want on Dig N’ Swap.

Shop for clothes and accessories guilt-free on Swapstyle, the world’s original and No. 1 fashion swap site.

Travel & Real Estate

Whether you want a place to stay for the night or forever, you can find an absolutely free deal through these bartering sites.

Rent out your extra space, and find cheap places to stay on Airbnb.

Have a family farm that’s just sitting dormant? Bring it back to life and get free farm produce when you share it with a gardener that needs the extra land. Or, if you’re a budding gardener, make use of land that’s just waiting for a fresh crop, totally free.

Offer your couch up to others on CouchSurfing, and you can find a couch to crash on wherever you’d like to go, free.
Use HomeExchange to find a place to travel and stay for free anywhere in the world. All you have to do is trade your home (or dorm room) that someone else can use in exchange.

If you’re lucky enough to own a home in college, you can swap it out for a new one anywhere in the world, provided you can find the right buddy to trade with. Check out Goswap to find out what’s available for a permanent house swap.

If you’ve got a skill you can trade, and need some help in return, you can turn your services into free help for the things you can’t do.

Care to Trade
Trade what you want for what you’ve got by swapping items, bartering services, and even real estate.

Skills 2 Barter

Trade skills and swap services in a cashless economy on Skills 2 Barter.

Trade School
Can’t pay for tuition? At Trade School, that’s not a problem. You can actually barter for instruction at this NYC institution.


Badabud takes the bartering idea one step further and adds a social network for creative people and experts to not just barter, but collaborate, trade, and get rewarded.

Trade a Favor
Find out about a life outside of using cash, trading with friends and others in your network for goods, services, and more, even taking advantage of assisted negotiations if needed.

Most students probably don’t have a need for babysitters, but if you’re a student with kids, this site is amazingly valuable, offering a way to trade babysitting and other tasks within your community.

Need a favor? Have a favor to offer? Swap favors and services with others using the FavorPals site.

If you’ve got a dorm room business, use the BizXchange site to grow and get value from your spare capacity and downtime.

Contacts and sources:
Jasmine Hall