Saturday, November 16, 2002

11/16/02 The Needed Stimulator To The Economy?

A good schtup a day. You think I am joshing. Not true. During the recent 4 day international conference held in Singapore it was declared that healthy sex lives make happy workers, and in turn, this counteracts a drooping economy. This proclamation was made by Emil Ng, the founder of the Asian Federation of Sexology. He went on to state that sexual well-being improves a nation's productivity. Ng also stated that "when the economy is down, sexual activity will be lower, not because of sexual problems, but financial problems. This is a vicious cycle."

I suggest that lunch hours be taken between the sheets and all corporate dining rooms removed. We can install cots in all cubes. We can replace stock options with clean bedding twice a week. I suggest we rally around the motto: screw our way out of the recession.
Yeah baby!

Let's remember the words spoken by Bruce Willis in the movie The Whole Nine Yards:" what's important is how I get along with people who are still alive." He could have been referring to multiple orgasms.

Friday, November 15, 2002

11/15/02 FBI Warning: Al-Qaida May Favor Spectacular Terrorist Attacks

These attacks would be characterized by "high symbolic value, mass casualties, severe damage to the U.S. economy, and maximum psychological trauma."

Prior to making an investment in a company, it is wise to uncover any uncovered pension fund. For example, GM's pension fund is underfunded by at least $20 billion.

George Plesko, an MIT accounting professor, says in 1992 there was no appreciable difference between pre-tax income and taxable net income reported to the IRS. Just six years later there was a major difference. Stockholders should be made aware of this fact. Also, by 1998 a University of Arizona study showed that the 1579 companies studied had reported almost $1 trillion more in liabilities to the IRS than to public shareholders and tax assets exceeded book assets by $1.9 trillion. These are material disclosures needing to be made.

More "soft spots": Sprint to lay off 1600; Cable and Wireless 3500; and Lehman 4% of their workers. Argentina defaults on a debt payment. Fourth quarter earnings growth for Target will be modest. Dell said it wasn't certain the industry would see a particularly strong 4th quarter. They don't see the signs of customers buying new computers.



Thursday, November 14, 2002

11/14/02 Pay To Play

Commercial lenders are under the scrutiny glass. Regulators are investigating widespread allegations that commercial banks have been and are making loans contingent upon the borrower's ability to bring in other fee-based business. This practice is called "pay to play". When 3500 financial officers were recently polled, almost 50% believed "pay to play" was a very real issue.

Greenspan said, if necessary, the Fed could buy Treasury debt with longer maturities, which would bring down longer-term interest rates. He really said this to Congress yesterday. He must have blinked and missed the huge rally in long Treasuries over the past week or so. Greenspan doesn't get it. The market movements preempt Fed action. The Fed's policy simply is in reaction to market forces, and the latter set the tone.

Applied Materials expects orders and revenues to fall in its fiscal first quarter. This company is certainly one of the strongholds within the semiconductor industry.

Wednesday, November 13, 2002

11/13/02 Tightened Bank Lending

Domestic banks cite reduced tolerance for risk and increases in corporate bond defaults as the reasons given for tightened lending practices. As such, recently lowered Fed rates will not do much to improve liquidity in the system.

Eastman Kodak will cut 1300 to 1700 jobs. Research In Motion to cut 220 employees or 10% of its staff.

Philip Morris is experiencing soft cigarette sales. I wonder whether the soft economy is the main reason.

The Business Roundtable survey revealed that 60% of 150 chief executives said their company's employee base would probably be cut next year. The survey showed that capital expenditures are expected to stay flat in 2003. This finding would jibe with Greenspan's testimony before Congress this morning. He doesn't see much vigor in business spending. Without the latter that only leaves the consumer and the government to spend. The holiday season doesn't look like any great shakes, and the government needs to get a budget approved.

Tuesday, November 12, 2002

11/12/02 Trouble Down On The Farm

75% of the soybeans and 33% of the corn grown in the U.S. is genetically engineered. Americans have a positive attitude towards this new agricultural technology. The Economic Union is the 4th largest market for American farmers and accounts for 12% of U.S. farm exports. The EU wants to enforce the new October 17th legislation which covers biotech labeling and trace back rules. These new regs will hinder our farm exports. Basically it means, for example, our genetically engineered corn is approved for sale in the U.S. but not permitted to be shipped to Europe. In essence, Europeans see agricultural biotechnology "as a luxury they don't really need," says Bernd Halling of the biotech industry's trade group.

So far this year 160 publically traded companies have filed for Chapter 11 bankruptcy. Just another "soft spot".

Federated Dep't Stores (Macy's and Bloomingdale's) expects lower November same-store sales and December sales to be up 1% to down 2%.

Buffett's Berkshire Hathaway may buy GE's Employer Re for $8 billion. This would make Berkshire #1 in the reinsurance business.

Monday, November 11, 2002

11/11/02 Veteran's Day

We give thanks to all the Veterans who have provided us with the blessings of freedom and democracy. Every day should commemorate the successes as well as the sacrifices of our Veteran's. They are heroes.

There are many aftermaths from 9/11. Some can be found right on Wall Street. CFSB dismissed its well-regarded market strategist and Merrill Lynch fired its chief economist. Both had one common shortcoming- they failed to directly produce revenue. Over the past 34 months Wall Street has eliminated 68,000 jobs. With little IPO revenue and few merger fees, more layoffs can be expected. This is another "soft spot".

Sunday, November 10, 2002

11/10/02 Another "Soft Spot"

Silicon Valley's jobless rate is now 7.9%. That's the highest level since 1983. Overall in California the rate is 6.4%.

Including today, there are only 7 sundays and 6 saturdays until Christmas.

Sending an email ad costs roughly half a cent and a piece of direct mail advertising about 100 times that amount. A survey has shown that half of on-line consumers are less likely to read on-line promotions. Yet, this year almost $2 billion will be expended on email promotions.

In a recent survey taken by Cigna 3 out of 5 workers say they plan to change their investment strategies if their year-end 401K balance is lower than the year before. I suggest those workers begin to think about new strategies. The new year is right around the corner.

The good news is that misery likes company. With 7 trillion dollars lost in market value in equities over the past 2 1/2 years there must be zillions of folks out there looking for new strategies. A good place to begin is the following: know what you're buying. That goes for stocks and not just underwear and socks.