So, it's official: The Associated Press confirms that Kansas is flatter than a pancake. Make that "considerably flatter," according to researchers at Southwest Texas State University and Arizona State University. Apparently, they use geological surveys and instruments to figure this stuff out.

Our own illustrious Dayana Yochim (who is from there) sides with Lee Allison, director of the Kansas Geological Survey, who dismisses the findings as "part of a vast breakfast food conspiracy to denigrate Kansas."

But even Dayana admits that the markets have flattened out a tad. Better grab Toto. With some big economic reports coming down the pike tomorrow and Friday, we may not be in Kansas for long.

In today's Motley Fool Take:

More SEC Woes for AOL?

The problems continue to grow for AOL Time Warner's(NYSE: AOL) America Online unit. Already under SEC investigation for its accounting of various advertising deals, the probe has now been extended to include the manner in which it reported subscriber growth during 2000 and 2001.

According to The Wall Street Journal, the SEC has asked for documents relating to AOL's bulk-subscription sales. Under that program, the company sold America Online subscriptions by the hundreds of thousands to partners such as Sears(NYSE: S), J.C. Penney(NYSE: JCP), Target(NYSE: TGT), United Airlines, and CompUSA. The subscriptions cost the partners very little, and they would offer them to their employees for less than $10 per month.

The program generated at least 830,000 subscriptions, or roughly 17% of subscriber growth, during the two years in question. There are two problems here. First, it's unclear how many of these bulk accounts were actually resold and activated by employees. Second, those that were activated were not, in the words of the Journal, "as lucrative... or as active" as AOL's regular $20-per-month subscribers.

In light of the new investigation, we are left once again questioning AOL's honesty and the quality information it disseminated.

Quote of Note

"In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move." -- Douglas Adams, 1952-2001, British author, The Restaurant at the End of the Universe (1980)

Barnes & No Bull

Here's how a seller got its groove back. Barnes & Noble(NYSE: BKS) has had little trouble winning over customers at its bookstores. Roomy aisles, inviting chairs, artsy eats, and a vibrant children's area make for an offline beast.

But things haven't worked out so well online. When Barnes & Noble launched its dot-com storefront on AOL Time Warner's(NYSE: AOL) America Online six years ago, it didn't take long for it to wilt before Amazon's(Nasdaq: AMZN) fiery presence.

A year later, management nonetheless found a ready investor in Bertelsmann AG and the pair took BNBN) public in 1999. It's been downhill ever since. The stock's traded in single digits for three years now.

Last night, Barnes & Noble announced intentions to buy back the 37% stake still owned by Bertelsmann for $164 million. That's a slight premium to the market price but considerably less than the $200 million Bertelsmann originally invested back in 1998.

In any event, Barnes & Noble will hold a 75% interest in the eponymous dot-com store. Is that a big deal? It can be.

True, while Amazon grew its sales by 26% last year, managed a meager 4.5%. However, managed to shave its operating expenses in half. Thus, while Barnes & Noble will take a hit ($0.11 per share) this year to absorb the larger chunk of the dot-com store, it expects to be consistently cash-flow positive by the holiday quarter and in fiscal 2004.

You have every right to be skeptical, but the online landscape is beginning to embrace the offline retailers. Discounters Wal-Mart(NYSE: WMT) and Kmart(Nasdaq: KMRT) had to suffer through a few re-launches before getting it right online. Others like Target(NYSE: TGT), Borders(NYSE: BGP), and Toys "R" Us(NYSE: TOY) now just let Amazon run their virtual stores. Still, there's something to be said for any bricks-and-mortar juggernaut that can roll out its own.

Fetching just 11 times next year's profit projections, there's tremendous upside if can right its wrongs. If so, this should be another happy ending.

Discussion Board of the Day: Amazon

Will Barnes & ever pose a threat to Amazon? Is the battle for mindshare over and Barnes' wit dimmed? Why did Barnes & roll out the exact same $25 threshold for free shipping as Amazon? All this and more -- in the Amazon discussion board. Only on

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Is the Refinancing Party Over?

The Mortgage Bankers Association America announced this morning that the number of mortgage applications for the week ending July 25 dropped 24% on a seasonally adjusted basis from the previous week. The drop is due mostly to a sharp decline in refinancings, which are down more than 50% from levels of just four weeks ago.

Not coincidentally, that's about the period of time mortgage rates have been climbing. According to Freddie Mac(NYSE: FRE), the rate on a 30-year, fixed mortgage has risen from 5.21% on June 19 to 5.94% as of July 24. Rates will be updated tomorrow, and are expected to be even higher.

So what does this mean? It depends on who you are.

  • If you are a homeowner: The time to refinance your mortgage and lock in four-decade-low interest rates may have passed -- or has it? While there's evidence that the economy is recovering, we're not out of the woods yet. Rates could drop again if progress isn't made. Plus, 6% is still a darn good rate. The rates on 30-year mortgages were an average 8% in the '90s, and were in the double digits throughout the '70s and '80s.

  • If you work in any field related to real estate: All you mortgage brokers, Realtors, title company employees, appraisers, et al. -- we hope you've been socking away a good portion of your paycheck during the boom years, because you may need it if rates keep going up. There are already rumblings of layoffs within the industry, as mentioned in real estate content provider Inman News. So start fattening that emergency fund.

  • If you're a consumer: Consumer spending, which accounts for two-thirds of the nation's economic activity, has been bolstered by the housing and refinancing booms. Lower monthly payments, bigger profits on home sales, cheaper home equity loans, and "cash out" refinancings (by which homeowners take out a chunk of equity and use it to remodel the house) have all put more money in Americans' pockets. The fear now is that fewer refinancings will mean less spending, which could hurt the economy. However, it's important to keep in mind that a refinanced (and lower-rate) mortgage is not just a one-time financial benefit -- monthly mortgage payments remain low for years, freeing up cash for other purposes. Also, though a slowdown is expected, Americans will still continue to buy homes, due to career changes, expanding families, and so on.

If you're wondering if refinancing still makes sense for you, or want to learn how to navigate the mortgage maze, visit our Home Center.

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Quick Takes

ConocoPhillips (NYSE: COP) recorded a second-quarter profit of $1.66 per share. That represents a sharp increase from the $0.91 per share posted last year before the merger between Conoco and Phillips Petroleum. The company has knocked $2.2 billion off its debt this year, reducing it to $17.6 billion.

The No. 1 U.S. tire maker lost money during the second quarter. Goodyear Tire & Rubber(NYSE: GT) lost $0.42 per share, compared to a profit of $0.18 per share in the year-ago period. The company said the single most important factor in the deterioration of its operating performance was an increase in raw material costs.

Cree (Nasdaq: CREE) was hammered for an 18% loss today after it reported a profit of $0.15 per share, but lowered its outlook for the next quarter. The maker of semiconductor chips for LEDs and other products also continues to incur expenses in connection with a $3 billion lawsuit filed against it by co-founder and former CEO Eric Hunter alleging securities fraud and defamation.

Seventy years after the Nazi organization German Labor Front introduced it to the world, the final classic Volkswagen Beetle rolled off the assembly line today. A plant in Puebla, Mexico, was the last to produce the famed "bug," and the final car -- a baby blue version -- is heading for a museum in Wolfsburg, Germany. The classic Beetle hasn't been available in the U.S. since 1977, but has been produced elsewhere.

In local news, unemployed steelworker Alf Monroe said, "Well, whaddya know, my old bug's a classic!"

And Finally...

Today on

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim