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Media Love Triangle

Disney + Fox + Comcast

 

An old-fashioned bidding war sparks on Wall St. as media giants look to partner up before the music stops.

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Get Me Up to Speed

  • Last year, Disney offered $52B for a big stake in 21st Century Fox.
  • Then Comcast decided to get in on the action, offering $65B.
  • Disney isn’t having that & just last week raised its offer to $71B, which Fox says is a superior bid.
  • Ball is now in Comcast’s court: will it up the stakes even more?
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$71B?! Why So Much?

  • What Disney & Comcast want: Fox’s stake in Hulu (streaming service) & Hollywood studios with TV & film franchises (Think: X-men & The Simpsons).
  • Bottom line: Real driver is the fear of the future with digital rivals like Amazon, Facebook & Netflix disrupting content, advertising & distribution. Media cos. need to get in the game to compete.
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Whoever wins in the end - Disney or Comcast - it's important to note Fox would retain some assets, including Fox News and Fox Broadcasting Company. So who's next to get in on the mergerpalooza action? Click to read more.

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Your Online Shopping
Dollars & Sense

 

 

The Supreme Court ruled states can require online sellers to collect sales tax on your purchases – what this means for your family.

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What Happened?

Some online retailers voluntarily collect sales tax in the 45 states + DC that impose a sales tax, but many don’t, placing brick-and-mortar shops at a disadvantage.

The high court overturned a 1992 ruling prohibiting states from collecting sales tax from out-of-state retailers w/o a “physical presence” in the same state as the buyer.

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“The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it’s time for outdated sales tax policies to change as well. This ruling clears the way for a fair and level playing field where all retailers compete under the same sales tax rules whether they sell merchandise online, in-store or both.”

National Retail Federation President and CEO Matthew Shay
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What It Means For You:

  • Online-only shops might raise their prices to make up for the money they’ll have to pay in sales tax to the states. Amazon is unlikely to do so – it’s been collecting sales tax nationwide on most items since 2017.
  • States will have more $ to spend internally. In its decision, the Supreme Court estimated states were losing up to $33B a year.
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Stocks for major online retailers like Amazon, Ebay, Overstock and Wayfair all dropped immediately following the ruling, but the lasting impact will take some time to measure.

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CHARITABLE RECORD

Big Benajamins, But Not From Average Joes.

For the first time, charitable giving topped $400B last year, but it may not be as impressive as it $eems.

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STUDY RESULTS

  • Americans gave $410B to charities last year vs. $390B in 2016, according to Giving USA.
  • Credits “booming stock market & a strong economy.”
  • BUT Americans’ generosity no higher than decades ago at 2% of disposable income.
  • Foundation donations up 15%, driven by mega gifts Michael Dell ($1B) & Mark Zuckerberg ($2B).
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WHY IT MATTERS

  • Last year, $4.1B in mega gifts by individuals vs. $1.49B in 2016.
  • This as we learn millionaires & billionaires hold almost half of global personal wealth.

“Some people feel they don’t need to give any more.”

Stacy Palmer, Chronicle of Philanthropy, alluding to a drop in giving for lower-income & middle-class families.
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Need another reason to give? A study last year shows being generous really does make you happier - and may even make you healthier. Click for why.

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How Hot is TOO Hot?

A fired-up U.S. economy does have a downside…

Why the Federal Reserve is taking action to cool things off.

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“Main takeaway is the economy is doing very well.” 

Federal Reserve Chair Jay Powell

  • What: Federal Reserve (U.S. Central Bank) hiked a key short-term interest rate Wednesday.
  • Why it matters: Borrowing gets more expensive – rate impacts credit cards, mortgages, auto loans, etc. But savers to benefit.

 

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What’s to Blame

  • Inflation = increase in prices, drop in purchasing value of money (i.e. things cost more).
  • Fed’s goal: keep economy expanding, but not so fast that it drives up inflation.
  • A decade after the recession, Fed has made progress. May unemployment rate was 3.8%, lowest since 2000, while inflation was just below Fed’s 2% target.
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The Fed began raising rates from 0 at the end of 2015 with the goal to bring it to 3% in next few years. We're halfway there with 2 more increases expected this year. Click for one opinion on why the Fed should just let inflation rise.

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Will $500 Per Family Solve Poverty in America?

 

 

Stockton, California is giving it a try, testing “guaranteed income.” Here’s why:

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STOCKTON’S PLAN

  • Starting early next year, 100 families will receive $500 per month – no strings attached.
  • Participation criteria undecided.
  • $1M grant from Economic Security Project funds program for 18 months.
  • Poverty plagues Stockton after the housing bust sent the city into bankruptcy in 2012.
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It’s Actually
Not a New Idea…

“I’m now convinced that the simplest approach will prove to be the most effective  —  the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Martin Luther King, Jr. in his book "Where Do We Go From Here: Chaos or Community?" (1967)
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Critics Argue the Math Doesn’t Add Up

  • $10K/yr x 300M Americans = $3T = 3/4ths of entire $4T fedl budget

“I would prefer an approach that tells people, we will help you get jobs. I don’t think the solution is to say, ‘OK, lets just start handing people cash.'”

Aparna Mathur, scholar at conservative-leaning American Enterprise Institute
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Who are the backers behind the $1M Stockton funding? Click to learn more about the Economic Security Project and why they are doing this.

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ONE-TRICK PONY?

 

Ford will stop making passenger cars to focus only on top-performing SUVs & trucks — with one exception: The Mustang.

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Ford kept the “modestly profitable” Mustang largely due to drivers’ emotional connection – which the automaker describes as “freedom.”

  • Introduced in 1964, the Mustang is world’s #1 selling sports car.
  • While sports cars skew male, 27% of Mustang buyers are female.
  • Fun fact: Mustang’s 1st movie appearance was James Bond’s “Goldfinger.”
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“The Mustang is like Rocky: It survived the 1970s fuel crisis, the glam 1980s, the move to S.U.V.s. It’s made it through every round of cuts.”

James Farley Jr., Ford’s President of Global Markets
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Say goodbye to Ford's full-size Taurus, midsize Fusion, and subcompact Fiesta... but is the passenger car dead? And what happens when/if gas prices climb towards $4/gallon... Read more here:

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NEXT STOP: $3

AAA: Gas prices are up 22% this year, national average now $2.87/gal.

The good news & bad news about what will likely be the most expensive driving season in years.

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U.S. economic growth has boosted demand for oil which means most consumers should be able to afford to pay more at the pump, BUT wildcards in oil-producing areas may mean higher prices ahead.

“Three dollars is like a small fence. You can get through it, you can get over it. But $4 is like the electric fence in Jurassic Park. There’s no getting over that.”

Patrick DeHaan, GasBuddy analyst
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WHAT’S TO BLAME?

  • Seasonality: Federal & state laws require cleaner, costlier gas.
  • Iran: Reimposing sanctions may constrict supply & while we don’t get our oil from Iran, Econ 101 says less global supply = higher prices.
  • Saudi Arabia: World’s largest oil producer signaled it wants oil prices $80-$100/barrel. Oil just topped $70/bbl, a level not seen since 2014 & up 50% vs. last year.
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Feeling Tapped Out?

Higher gas prices are on track to cost Americans an extra $38B this year, erasing about one-third of the direct benefit from Pres. Trump’s tax cuts, Morgan Stanley estimates.

If gas stays at these levels for the year, it’ll cost the average American household $450 extra.

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It's expected to be the most expensive summer driving season in years -- so what can you do to lessen the pain at the pump? Click to learn the best days of week to buy gas, according to a new study from Gas Buddy.

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TAX DAY EXTENDED

IRS Website Outage Means 1 More Day to File

“This is the busiest tax day of the year & the IRS apologizes for the inconvenience this system issue caused for taxpayers.”

Meanwhile, nearly half of U.S. won’t pay any federal taxes this year.

 

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46% of Americans Pay
NO Federal Income Tax

WHY? They simply don’t earn enough money (they are either retirees or workers who owe only payroll taxes).

Very rarely, high-income earners use strategies to cut federal income tax liability.

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GOLDILOCKS & THE IRS
How are your taxes?

According to a new Gallup Poll:

  • 48% say taxes are “about right” 
  • 45% say taxes are “too high”  (smallest percentage since 2012)

Gallup: Republicans feel better about their taxes. 45% think taxes are too high vs. 62% year ago & 72% in ’16.

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The Case for More Taxes

“In your average social democratic European country, you pay more taxes, but you also get a lot in return: universal health coverage, free child care, generous paid family leave, & free college, for example … there are things you just don’t have to worry about, things that keep us Americans up nights.”

Paul Waldman, The American Prospect
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Who Pays the Most Taxes?
Location Matters.

Adding up state & federal income taxes, property, sales & gas taxes…

  • New Jersey residents pay the highest on avg at $20K/year
  • West Virginia residents pay the lowest on avg under $7K/year
Click to see: How Your State Stacks Up
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In an USA Today Op-Ed , President Trump says America's economy is back and roaring and its people are winning. Click to read & tell us what you think.

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SEARS-IOUSLY?

Real Estate Gamble as Retailer Auctions Stores

16 Sears locations – all of which are profitable, according to WSJ – are up for grabs in an online auction set for next month.

 

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Bid to be a Sears Landlord

  • Bids due by May 1st.
  • No word if there is a minimum bid.
  • Advertised as sale-leaseback deals, meaning Sears would make rent payments to the winning bidders to remain in the space.
  • BUT it’s possible, depending upon lease terms, Sears stores could close or shrink to take up less space on the property.
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Sears’ Struggle

Sears unloading assets to get some badly needed cash.

Latest earnings: Sears’ revenue fell nearly 28% & sales dropped 15% – its 25th straight quarter of declines (more than 6 years).

Sears, which also owns Kmart, has closed hundreds of stores since the start of 2017.

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And then there were none... Later this year, Sears will close its last department store in Chicago, where the company was based for more than 100 years.

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No Signature Needed

Death Knell For Cursive?

Nearly a century after the credit card was first introduced, the way you pay with it is about to change  starting this weekend.

“No one really signs any more; it’s all scribbles and squiggles. Some people do smiley faces.”

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Change At The Checkout

Starting Saturday, American Express, Discover, Mastercard & Visa will stop requiring signatures.

  • Signatures used to help verify your identity. Now “no longer reliable.”
  • Most people just scribble an illegible signature.
  • Most businesses don’t even bother to check.
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So I’ll Never Sign Again?

Not collecting signatures is optional, leaving retailers to decide.

But speeding up checkout lines is a powerful incentive. (Walmart calls signatures “worthless.”)

Restaurants may still ask so the customer has the opportunity to tip.

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Is Your Safety in Jeopardy?

“Our fraud capabilities have advanced so that signatures are no longer necessary to fight fraud.”
Jaromir Divilek, American Express

  • Microchips in credit cards create unique codes for each purchase, making cards harder to copy.
  • Once merchants upgraded swipe technology, signatures became “largely irrelevant.”
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But seriously, when was the last time you signed your name? Mastercard says consumers don't want to sign anymore. See the 4 reasons why by clicking here:

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Facebook’s Security Fix Impacts Instagram & Others

 

 

FB’s attempt to increase user security after a major loophole may change the way you shop & connect with friends. But are you safer?

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New From Facebook

87M (not the estimated 50M) FB users had their private information shared with a third party without their permission.

FB says you should assume your info has been “scraped” if you allowed people to search for you using your email or phone number. FB has now disabled that feature.

Money

Facebook Drama

  • Remember FB owns Instagram (and other HUGE social network companies like WhatsApp). This is why the security “fumble” is so significant.
  • Your user experience on FB or Insta may change. For example, accounts where you “like” a photo so you can shop the product have likely been altered until a full security assessment is completed.
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Breaking-Up With FB?

  • New study asked participants to stay off FB for 5 days.
  • Participants’s stress hormone (cortisol) levels dropped, although they did not perceive themselves as LESS stressed.
  • Participants felt less happy with their lives because of the “social disconnection.”
click: READ STUDY
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Is this the beginning of the end for FB? Do you even use the site? Tell us your favorite social media platform: Info@SmartHerNews.com. Here's one take

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BACKUP INSURANCE?
Walmart May Buy Humana

4 in 10 Americans shop at Walmart each week, but competition has the world’s largest retailer eyeing expansion into health insurance.

“If this deal could happen there could be synergies that will drive more people into the stores.”

Oliver Chen, Cowen senior retail analyst to CNBC
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What’s in it for Walmart?

  • $eniors: Humana’s core customer (as the 2nd largest provider of Medicare Advantage plans).
  • Complete Control: Operate as pharmacy, insurance & pharmacy benefit managers (negotiating costs of medicines for plans).
  • Increased profitability: Retail margins slimmer than health care.
  • Data: Knowing more about you & how to better sell to you.
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Why a Walmart-Humana Tie-Up Now?

  • Rapid consolidation: Health industry merging for efficiencies.
  • Regulatory concerns: A federal judge blocked Aetna & Humana merger. Insurers forced to look for new partners – like retailers.
  • Amazon: Walmart’s biggest threat is teaming up with Berkshire Hathaway & JPMorgan in an effort to lower health care costs.
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Remember: There's no official Walmart-Humana deal yet, but there's potential for this to be a major game changer. Did you know: 90% of America is within 10 miles of a Walmart? Wow.

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