NELLIJA VALIDA OLEKS STORY - I (THE SILVER BRACELET)

(This is the first of some stories about a woman who was talented but could not get herself to write up her own stories.  She is now deceased, and I have decided to write up some of her stories in her memory.)

Nellija Valida Oleks (b 1926) grew up in Latvia* and was there during WW-II.  She was a promising ballerina student.  Latvia had been occupied by the Soviet Union for a year, but the Nazi's came in and pushed out the Soviets.  Later, the Soviets came back and were pushing out the Nazis.  A decision had to be made - go with the Nazis or stay with the Soviets.  Which do you prefer - the frying pan or the fire?  Nellija and her mother and sister went with the Nazis where she spent two years in a camp.

The family was brought to America by a religious group that was very demanding and the family succeeded to separate themselves from the group with difficulty.

Nelllija had a townhouse with four bedrooms three of which she rented.  At one time there was a woman renter who left without paying her rent and took with her a Latvian silver bracelet.    This bracelet was heavy and weighed four ounces, but, of course, the sentimental values was more important than the loss of so much silver.

A few years later, another woman was renting a room from Nellija who, coincidentally, turned out to be the sister of the woman who stole the bracelet.  Nellija told the woman about it, and the woman said she would get the bracelet back.  I was sure the woman had sold the bracelet, but, as it turned out, she hadn't and the sister did get it back for Nellija.

* http://www.baltic21.org/history/latvia.html

RETAIL STORE OPENINGS

Normally I like the Treasury Secretaries whether they are Democrat or Republican, but I'm not sure about Steve Mnuchin who also lies.  Incidentally, Amazon has less than 4% (yes, less than four percent) of the retail business.  Contrary to the claims, brick and mortar retail stores are increasing rather than decreasing (quotes are in italics and larger print with the reference at the end):

As the “retail apocalypse” canard continues to grab the odd headline in the media, the data and the facts are consistently telling us quite a different story: a story of an industry in transition, but still growing. The most recent retail sales figures released by the Census Bureau were up a robust 4.2 percent year-on-year in July. Every month this year has seen a steady increase in sales over the same period last year. 

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Their data shows a net increase in store openings of over 4,000 in 2017. In fact, for each company closing a store, 2.7 companies are opening stores.  (bolding and underlining are added)

(https://nrf.com/blog/retail-store-openings-increase-2017 )

I suspect that Walmart has been responsible for far more stores closing than Amazon.

POST OFFICE PACKAGE CHARGES

It turns out that there is a dispute going on among the Post Office, Amazon, and UPS for some time about the pricing structure of the Post Office (quotes are in italics):

The dispute primarily centers around how the post office splits its fixed "institutional" costs — such as the driver salaries, trucking fees, and other overhead expenses — between its two businesses: The "Market Dominant" letter business (a government-protected monopoly) and the "Competitive" parcel business (which competes with many private businesses, including UPS and FedEx).
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The 5.5 percent minimum share was set in 2006 when the Postal Accountability and Enhancement Act (PAEA) became law. But because the law was written more than a decade ago, it fails to capture the growing mix of package shipments, especially as a result of e-commerce growth, UPS wrote in a filing last year.

The post office has seen a steady increase in revenue from the Competitive packaging business. In 2008, the Competitive business generated just $8.4 billion, or just 11 percent of the total revenue. By 2017, that part of the business had grown to over $19 billion in sales, approximately 30 percent of the post office's total sales.

To better account for this change, UPS thinks the Postal Service's Competitive business should pay a larger share of the fixed costs — approximately 29 percent.*

And here is another take on the Amazon-Post Office-UPS dispute

One of his main contentions is that Amazon is ripping off the U.S. Postal Service, but it's not clear whether it is getting the short end of the stick from the Jeff Bezos-led retailing juggernaut.**

In fact, Amazon may be saving the post office from financial ruin. (Underlining and bolding added)

On April 3, Trump said, "the post office is losing billions of dollars," at U.S. taxpayers' expense.

It's true that the post office is losing money. It reported a $2.7 billion net loss in 2017.

But the post office is not funded by U.S. tax dollars.

And when you look at the revenue breakdown, you can see that shipping and packages is actually one of the few categories that brought in more money than the previous year. While overall revenue fell $1.8 billion, shipping and packages saw a $2.1 billion increase in revenue. Meanwhile, first-class mail revenue was down around $1.8 billion.**

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That idea that the post office is losing big likely stems from a Citigroup report. The report alleges the USPS' pricing model is unsustainable, and that parcel rates would need to rise significantly for the agency to break even.

The report was mentioned in a widely circulated Wall Street Journal commentary by shipping analyst Josh Sandbulte. The analyst argues that the post office is essentially giving Amazon a $1.46 subsidy for every box it ships.**

But if true, that figure would hold for all companies across the board, not just Amazon. Which is probably where Trump is coming up with the claim that the post office "will lose $1.50 on average for each package it delivers for Amazon."

* https://www.cnbc.com/2018/04/05/amazon-and-ups-disagree-postal-regulatory-commission-public-filings-post-office-cost-structure.html
** https://www.cnbc.com/2018/04/06/trump-claims-amazon-is-ripping-off-post-office-but-its-complicated.html

MARCH IS OVER - WHEW!

If you don't invest in stocks and bonds, go on to something else.

March is over, but will April be any better?  An Article in Barron's gives us some hope. (quotes from the reference are in italics)
During that stretch, there were 46 positive Aprils and 22 negative ones.
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Say what you will, the Stock Traders’ Almanac found that the Dow had returned an average 7.6% between Nov. 1 and April 30, going back to 1950, compared with just 0.4% between May 1 and Oct. 31. The tendency for weakness in the middle of midterm election years is even more pronounced. The second and third quarters have been the weakest of the four-year cycle, with an average decline of 1.8% in the Dow industrials.

That historically sets up for the “sweet spot” of the four-year election cycle. From the fourth quarter of the midterms to the second quarter of the “pre-election” year, the Dow has averaged 20.4%.
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Then there’s the Fed, which is on track for another two, and maybe three, quarter-point interest-rate increases this year. The Treasury market is reacting anomalously, with longer yields coming down again. The yield curve, expressed in the spread between the two- and 10-year notes, has fallen to less than a half-percentage point. That’s made it the flattest since the financial crisis. The history of the yield curve suggests caution.

https://www.barrons.com/articles/the-fang-stocks-bite-back-1522454400

FICTION AND FACT WITH DONALD TRUMP

Trump's accusation against Amazon are fabrications:

Trump Tweet:
"I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state and local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!"

The Facts:
Actually, Amazon exceeds the Federal law on the matter of collecting state sales taxes.  It collects the sales tax on its own products in all 45 states that have sales tax whereas it is only required by law to collect the sales tax in states where it has a physical presence (e.g warehouses, office buildings, and other structures. *
SCORE: Amazon A+, Trump F

As to 3rd party merchant sales taxes, Amazon started collecting these in Washington state as of January 1, 2018, and Pennsylvania as of April 1, 2018.  These are the two states that mandate collection of such taxes by law.
But another chapter has opened, because while Amazon handles sales taxes on purchases from its own inventory, it's up to third-party merchants selling on its marketplace to tally and send in their own sales-tax payments. Many aren't doing it.**
SCORE: Amazon B, Trump F

Trump Tweet:
“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!” he tweeted early Tuesday.***

The Facts:
"The postal service has lost money for 11 straight years, mostly because of pension and health care costs. In 2017, the service lost $800 million on $69.7 billion operating revenue. Under a 2006 law, it must pre-fund 75 years' worth of retiree health benefits. Neither the government nor private companies are required to do that. (It has defaulted on those payments periodically, with the last one made in 2015).
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The 2006 law also mandated that each line of business within the postal service cover its attributable costs. In other words, for the postal service to lose money on package delivery would be against the law.
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Amazon ships enough with the post office to qualify for bulk rates, giving it a significant volume discount that varies depending on package weight and number. "***
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The Post Office brought in $19.5 billion from shipping packages like Amazon’s last year, one of the few bright spots in a balance sheet marked by a $1.9 billion decline in revenue from first-class mail. Mail delivery that shrank by 5 billion pieces (4%), but package shipments rose by 589 million (11.4%). Package revenues were also up by about $2.1 billion year over year.
The Post has become essentially a package delivery company that also deliver mail.
SCORE: Amazon A, Trump D (Yes, Donald, the Post Office IS losing money)

For a list of rates for mailing packages see: https://pe.usps.com/cpim/ftp/manuals/dmm300/Notice123.pdf


* https://en.wikipedia.org/wiki/Amazon_tax
** https://phys.org/news/2017-11-states-third-party-sellers-amazon-marketplace.html
***  http://fortune.com/2018/03/29/donald-trump-post-office-amazon-losing-money/
https://www.cbsnews.com/news/amazon-contract-usps-fact-checking-trump-tweets-amazon-post-office-03-31-2018/

TRUMP'S FICTIONAL TAX WAR ON AMAZON

Just to clear some fiction up, see:

Amazon currently collects and remits sales taxes for sales made directly by Amazon, as opposed to its third-party sellers, to all forty-five states with a statewide sales tax. Amazon supports the Marketplace Fairness Act that requires remote sellers to collect sales taxes.
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Amazon offers its third-party sellers an optional sales tax collection service for a 2.9 percent fee (based on the collected sales taxes). To the extent existing third-part sellers purchase the sales tax service, Amazon benefits.

The imposition of sales tax on remote sellers, including Amazon's third-party sellers, might help in-state retailers by leveling the playing field with online competitors. However, the expansion of sales taxes to remote sellers will benefit Amazon.

https://www.cnbc.com/2018/04/02/how-amazon-will-win-the-tax-war-with-trump.html

BACK TO THE GOOD OLD DAYS - II

In early March, I posted a piece called "Back To The Good Old Days"*  I thought it was interesting that John Harwood yesterday published an article on CNBC with a similar title, "Trump Looks Back To America's Past, Not Its Future"** that is more thorough although he seems to think that Trump looks to about 1971 when he was 25 whereas I take him back to the 1950s when he was a child.  At any rate, I think Harwood's article is well worth a read.

Here are a couple of excerpts:

Trump turned 25 in 1971, the year he became president of his family's real estate business. Eight in 10 Americans were white Christians then. The American economy represented nearly 40 percent of global output.
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Trump complains that Canada, a potential tariff target, runs a trade surplus with the U.S. That's only true if the calculation excludes services — which now account for more than 80 percent of America's private sector jobs.**

* http://stopcontinentaldrift.blogspot.com/2018/03/back-to-good-old-days-1950s.html
** https://www.cnbc.com/2018/04/01/trump-looks-to-americas-past-not-its-future.html