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?
- Quote of Note
- Barnes & No Bull
- Discussion Board of the Day: Amazon
- Is the Refinancing Party Over?
- Attention, Serious Investors
- Quick Takes: Goodyear Tire & Rubber, Cree, Volkswagen Beetle, more
- And Finally...
More SEC Woes for AOL?
The problems continue to grow for AOL Time Warner's
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
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
But things haven't worked out so well online. When Barnes & Noble launched its dot-com storefront on AOL Time Warner's
A year later, management nonetheless found a ready investor in Bertelsmann AG and the pair took Barnesandnoble.com
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, Barnesandnoble.com managed a meager 4.5%. However, Barnesandnoble.com 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 Barnesandnoble.com 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
Fetching just 11 times next year's profit projections, there's tremendous upside if Barnesandnoble.com can right its wrongs. If so, this should be another happy ending.
Discussion Board of the Day: Amazon
Will Barnes & Noble.com ever pose a threat to Amazon? Is the battle for mindshare over and Barnes' wit dimmed? Why did Barnes & Noble.com roll out the exact same $25 threshold for free shipping as Amazon? All this and more -- in the Amazon discussion board. Only on Fool.com.
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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
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.
Attention, Serious Investors
If you're interested in digging up underfollowed, undervalued stocks before Wall Street does, Tom Gardner's latest newsletter is just for you. Sign up for a risk-free trial today!
The No. 1 U.S. tire maker lost money during the second quarter. Goodyear Tire & Rubber
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!"
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Dancing With the Devil: More and more companies are settling fraud charges, but at what cost to investors?
- Dilbert's Personal Finance Book: If "analysis paralysis" prevents you from getting your finances in order, Dilbert has the answer.
- Summer Book Learnin': Bill Mann recommends two (and a half) summer reads for investors.
- In Fool's School, topics for your investment club.
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