Amazon’s Brush With $1,000 Signals the Death of the Stock Split – Ben Eisen May 26, 2017 5:30 a.m. ET


Stock splits, once considered a way to keep shares affordable for mom-and-pop investors, are rare today as companies aspire to new heights

Amazon.com, which opened its first Amazon Books store in New York on Thursday, has seen its shares brush $1,000. Although the firm split its stock as a young public company, founder and CEO Jeff Bezos said Amazon doesn’t ‘have any plans to do this at this point.’

Amazon.com, which opened its first Amazon Books store in New York on Thursday, has seen its shares brush $1,000. Although the firm split its stock as a young public company, founder and CEO Jeff Bezos said Amazon doesn’t ‘have any plans to do this at this point.’ Photo: Spencer Platt/Getty Images

Big companies are giving up on the stock split.

On Thursday, shares of Amazon.com Inc. AMZN 1.33% almost brushed $1,000 before closing at $993.38.

The price increase, up from around $68 a decade ago, reflects the company’s growth and dominance. But it also marks the latest example of a company letting its stock price rise without engaging in a “split” that boosts the number of shares in order to lower the per-share price. Google parent Alphabet Inc.’s GOOGL 1.46% Class A shares also are now close to $1,000.

Other companies are aspiring to such heights. So far this year, only two S&P 500 companies have split their stock. In all of last year, six companies in the large-company index did. That’s down sharply from 20 years ago, when 93 S&P 500 firms split their shares, a rate of close to two per week, according to Birinyi Associates.

After decades of mostly remaining in a range between $25 and $50, the average stock in the S&P 500 is now trading above $98, the highest ever, according to Birinyi Associates.

A big stock price is “a new way of calling attention to yourself,” said William C. Weld, a finance professor at the University of North Carolina’s Kenan-Flagler Business School who has studied stock splits. It used to be that splitting shares signaled reliability and stability, he said. “Companies now are saying ‘look at us, we’re tough and strong.’ ”

In the 1990s, when stock picking for one’s own account was in vogue, companies also considered splits a way to keep shares affordable for mom-and-pop investors. Even though nothing changes fundamentally about the company with a stock split—it’s like trading a dime for two nickels—splits used to generate excitement and, often, a short-term pop for the shares.

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Barack Obama on food and climate change: ‘We can still act and it won’t be too late – May 26 2017


During the course of my presidency, I made climate change a top priority, because I believe that, for all the challenges that we face, this is the one that will define the contours of this century more dramatically perhaps than the others. No nation, whether it’s large or small, rich or poor, will be immune from the impacts of climate change. We are already experiencing it in America, where some cities are seeing floods on sunny days, where wildfire seasons are longer and more dangerous, where in our arctic state, Alaska, we’re seeing rapidly eroding shorelines, and glaciers receding at a pace unseen in modern times.

Over my eight years in office, we dramatically increased our generation of clean energy, we acted to curtail our use of dirty energy, and we invested in energy efficiency across the board. At the 2015 climate change summit in Paris, we helped lead the world to the first significant global agreement for a low-carbon future.

But here’s the thing: even if every country somehow puts the brakes on emissions, climate change would still have an impact on our world for years to come. Our changing climate is already making it more difficult to produce food, and we’ve already seen shrinking yields and spiking food prices that, in some cases, are leading to political instability. And when most of the world’s poor work in agriculture, the stark imbalances that we’ve worked so hard to close between developed and developing countries will be even tougher to close. The cost will be borne by people in poor nations that are least equipped to handle it. In fact, some of the refugee flows into Europe originate not only from conflict, but also from places where there are food shortages, which will get far worse as climate change continues. So if we don’t take the action necessary to slow and ultimately stop these trends, the migration that has put such a burden on Europe already will just continue to get worse.

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Sean Hannity’s Advertisers Are Bailing on His Show Like Rats Jumping off a Sinking Conspiracy Theory


Sean Hannity is stuck in a ratings slump and has spent the last week or so promoting unverifiable claims made by hustlers and phonies about the unsolved July 2016 murder of Democratic National Committee staffer Seth Rich. Police believe Rich may have been killed during an attempted robbery; Hannity believes that the 27-year-old was targeted for death by Hillary Clinton and George Soros because he was passing DNC emails to WikiLeaks. Law enforcement authorities and Rich’s family say there is no evidence of any of this, and the Rich family has implored Hannity to stop defaming and speculating about their late son, but the host is insisting he will continue to pursue the non-story because he believes (in a giant and fallacious logical leap) that it would prove there was no collusion between Russia and the Trump campaign.

Source: Sean Hannity’s Advertisers Are Bailing on His Show Like Rats Jumping off a Sinking Conspiracy Theory

The Manchester Bombing and British Counterterrorism – By Robin Simcox May 25, 2017


The Islamic State (ISIS) has claimed its second attack in the United Kingdom in three months. This week’s suicide bombing at an Ariana Grande concert in the northwestern city of Manchester had, at the time of this writing, taken 22 lives and left dozens of people injured. The perpetrator was Salman Abedi, a 22-year-old British citizen of Libyan descent.

This was the worst terrorist attack the country had suffered since al Qaeda struck the London transport network on July 7, 2005, and the British government has raised its terrorist threat level to “critical,” meaning that another attack could occur imminently. Elements of the Manchester attack are unusual. For example, Libyan involvement in Islamist attacks in the United Kingdom is very rare. According to recent research from the Henry Jackson Society (previous editions to which I contributed), only one percent of those involved in Islamism-related offenses in the United Kingdom were of Libyan ancestry.

Other elements, however, are very familiar. That Abedi was a homegrown terrorist is unsurprising. In the United Kingdom, almost three-quarters of individuals who have committed Islamism-related offenses are British. Abedi was the child of Libyan refugees, a reminder that the challenges posed by refugees in Europe are not confined to the first generation. Abedi’s father is reportedly a member of the Islamist group the Libyan Islamic Fighting Group, as a former Libyan security official told the Associated Press.

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‘Our Film Is Funny Until It’s Not’: Brad Pitt On The Darkly Comic ‘War Machine’ – David Greene May 26, 20174:48 AM ET


Pitt’s War Machine character, Gen. Glen McMahon, is loosely based on the real Gen. Stanley McChrystal.

Francois Duhamel/Netflix

When you think about the 16 years America has been fighting in Afghanistan, “funny” probably isn’t a word that comes to mind. So, at first blush, the new dark comedy War Machine feels a bit risky. It stars Brad Pitt as a revered but semi-clueless four-star general who’s appointed to oversee the entire war effort in Afghanistan.

Pitt says the film uses comedy to lure viewers in, then it shows them some harsh realities. “I would say our film is funny until it’s not; until the dial is turned to a more serious tone, till we get to the real repercussions for the troops, who are actually having to follow these orders.”

War Machine was directed by Australian filmmaker David Michôd. He says if there are scenes that seem insensitive, well, there’s a legacy there. “America, as we know, has a long and rich history of war comedy — you know, [Dr.] Strangelove, M*A*S*Hand Catch-22 and … even Stripes.”

But according to Michôd, that genre has dried up. He points to a changing relationship between society and its military. “You could build comedy out of World War II, for instance, because the military machine was so much a part of society. … In the decades since, that separation that’s emerged between society and the military has had the effect of making it almost seem as if you cannot talk about military with anything other than reverence — in a way that would have been unthinkable back in World War II.”

Michôd says being Australian put him in a unique position to talk about America’s wars. “Australia has fought side-by-side with the United States in every major conflict since World War I. … And so in a way I feel like I have the privilege of and outsider’s eye, and yet also feel very entitled to speak as well, to have an opinion.”

Michôd’s new film is loosely based on a real general, Stanley McChrystal, who commanded allied forces in Afghanistan. In 2010, the late journalist Michael Hastings exposed McChrystal and his doubts about President Obama’s war strategy, and the general was fired.

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Jail break: America’s prisons are failing. Here’s how to make them work – The Economist May 26 2017


A lot is known about how to reform prisoners. Far too little is done

SHIRLEY SCHMITT is no one’s idea of a dangerous criminal. She lived quietly on a farm in Iowa, raising horses and a daughter, until her husband died in 2006. Depressed and suffering from chronic pain, she started using methamphetamine. Unable to afford her habit, she and a group of friends started to make the drug, for their own personal use. She was arrested in 2012, underwent drug treatment, and has been sober ever since. She has never sold drugs for profit, but federal mandatory minimum rules, along with previous convictions for drug possession and livestock neglect, forced the judge to sentence her to ten years in prison. Each year she serves will cost taxpayers roughly $30,000—enough to pay the fees for three struggling students at the University of Iowa. When she gets out she could be old enough to draw a pension.

Barack Obama tried to reduce the number of absurdly long prison sentences in America. His attorney-general, Eric Holder, told federal prosecutors to avoid seeking the maximum penalties for non-violent drug offenders. This reform caused a modest reduction in the number of federal prisoners (who are about 10% of the total). Donald Trump’s attorney-general, Jeff Sessions, has just torn it up. This month he ordered prosecutors to aim for the harshest punishments the law allows, calling his new crusade against drug dealers “moral and just”. It is neither.

More is not always better

Prisons are an essential tool to keep society safe. A burglar who is locked up cannot break into your home. A mugger may leave you alone if he thinks that robbing you means jail. Without the threat of a cell to keep them in check, the strong and selfish would prey on the weak, as they do in countries where the state is too feeble to run a proper justice system.

But as with many good things, more is not always better (see article). The first people any rational society locks up are the most dangerous criminals, such as murderers and rapists. The more people a country imprisons, the less dangerous each additional prisoner is likely to be. At some point, the costs of incarceration start to outweigh the benefits. Prisons are expensive—cells must be built, guards hired, prisoners fed. The inmate, while confined, is unlikely to work, support his family or pay tax. Money spent on prisons cannot be spent on other things that might reduce crime more, such as hiring extra police or improving pre-school in rough neighbourhoods. And—crucially—locking up minor offenders can make them more dangerous, since they learn felonious habits from the hard cases they meet inside.

America passed the point of negative returns long ago. Its incarceration rate rose fivefold between 1970 and 2008. Relative to its population, it now locks up seven times as many people as France, 11 times as many as the Netherlands and 15 times as many as Japan. It imprisons people for things that should not be crimes (drug possession, prostitution, unintentionally violating incomprehensible regulations) and imposes breathtakingly harsh penalties for minor offences. Under “three strikes” rules, petty thieves have been jailed for life.

A ten-year sentence costs ten times as much as a one-year sentence, but is nowhere near ten times as effective a deterrent. Criminals do not think ten years into the future. If they did, they would take up some other line of work. One study found that each extra year in prison raises the risk of reoffending by six percentage points. Also, because mass incarceration breaks up families and renders many ex-convicts unemployable, it has raised the American poverty rate by an estimated 20%. Many states, including Mr Sessions’s home, Alabama, have decided that enough is enough. Between 2010 and 2015 America’s incarceration rate fell by 8%. Far from leading to a surge in crime, this was accompanied by a 15% drop.

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If You Have a Preexisting Condition, the GOP Health Care Bill Is Even Worse Than You Thought – PATRICK CALDWELL MAY 25, 2017 6:22 PM


Your continuous coverage won’t save you.

Bill Clark/ZUMA

Rep. Jason Chaffetz (R-Utah), moments before voting to undo Obamacare’s preexisting condition protections

When Republican lawmakers face criticism over their plan to allow states to dismantle protections for people with preexisting conditions, they have a pretty standard response. Their Obamacare repeal bill, they insist, would only allow insurers to jack up prices on sick people if those people haven’t maintained continuous health coverage. “For individuals with preexisting conditions, once you are in the system, every proposal that I’ve heard so far says you stay in the system,” Sen. Mike Rounds (R-S.D.) told NPR Thursday. “And if you do have a serious illness, you can’t run out of coverage.”

But we now know that isn’t really accurate. As Mother Jones‘ Kevin Drum points out, Wednesday’s Congressional Budget Office analysis of the bill suggests that anyone with a preexisting medical condition—even people who already have health insurance—could face steep premium hikes.

“The nongroup markets in those states would become unstable for people with higher-than-average expected health care costs.”

Part of what Republicans are saying is technically true: The bill does, in fact, bar insurance companies from singling out individuals for price hikes if they have maintained continuous coverage. But the CBO notes that insurers would have—and likely would use—a workaround that would effectively jack up rates on every sick person they cover in the non-group market.

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