Saturday, October 23, 2004

10/23/04 Sock It To Me!

Our exports are picking up. Hooters is opening a branch in Shanghai. In an effort to promote trade, the Bush Administration will impose quotas on sock imports from China. Do we have any sock manufacturers left in our country?

Jon Stewart: "If the events of Sept. 11, 2001 have proven anything, it's that the terrorists can attack us, but they can't take away what makes us American- our freedom, our liberty, our civil rights. No, only Attorney General John Ashcroft can do that."

Amazon expects a record holiday season as they promote lower prices and free shipping.

West Virginia has a high percentage of National Guard and Reservists, and many have been doing two-year tours of service in dangerous theatres.

Ninety percent of the oil in the Persian Gulf is currently purchased by Japan, China, and India. Economic ties to the U.S. are weakening.

AMR will furlough 1100 employees. Greenville Wire Products of Greenville, Michigan is closing its doors after 20 years and 150 people will lose their jobs. Lastra, a manufacturing company in Jacksonville, will close its plant and 200 workers will lose their jobs. HMSHost will permanently layoff 103 workers at Sea Tac.

Weak sales in North America, Germany, and Northern Europe contributed to Coke falling short of the goals the company set for itself. Unit case volume in the third quarter declined by 3%.

Toyota plans on increasing capiatl spending more than 10% during this business year.

David Letterman: "We have to rebuild Iraq into a strong and independent nation that will one day hate the U.S." I think that day has already arrived.

10-year Treasury bonds are yielding 3.98%. The Dow has lost 683 points since the close of 2003. It stands at its lowest level in 11 months. Many analysts believe the market will rally after the election. How many of these analysts are investing their own money and not that belonging to other people?

Natural gas futures closed above $8 per million BTU to a 19-month high. Crude closed above $55 a barrel fof the first time. Heating oil closed at a record high of $1.5944 a gallon. These are real prices. They are not based on government intelligence.

The Republican National Committee recently admitted distributing pamphlets stating that Kerry would ban the Bible if elected. The pamphlet did not mention which Bible. It could be a choice- one from column A and one from column B- a little like buy one get one free.



Friday, October 22, 2004

10/22/04 Wistful Thinking

Yesterday Microsoft and Google reported their quarterly results. Analysts were not terribly excited by the Microsoft report. After all, the company only earned $2.9 billion on a sales gain of 11%, and the CFO increased the sales forecast for the year to $39 billion. Rather, Wall Street focused on a $400 million decline in long-term contracts. That is inconsequential. However, the CFO suggested that sales in the December quarter might only increase 1 to 2 percent. Microsoft normally is conservative in estimates but this might have proven more than most short-term investors could handle. It also reflects the difficult business environment that is not a soft patch. Google stole the earnings show with a profit of $52 million on a 50% sales increase. Google is currently one of the two growth stories. The other is eBay. Microsoft was discussed in those terms a few years back.

The Census Bureau estimates that 4.5 million people worked at home in 2003.

Coronet Foods has been a major employer in Wheeling, West Virginia for 40 years. They will close its doors today, and about 200 workers will lose their jobs.

A month ago I mention that the leading economic indicators would be down for the coming month. Yesterday a decline of 0.1% was reported. It was the fourth straight monthly decline. The next report will mark the fifth straight. This is not a soft patch. Anyone who thinks so is soft in the head.

Wednesday, October 20, 2004

10/21/04 Ten Year Treasuries Defy The Fed Rate Hikes

Yesterday yields on 10 year Treasury bonds dipped under 4% and settled at a yield of 3.99%. Traders feel pretty certain that the Fed will raise short term rates next month in an effort to generate a "natural" rate that more closely approximates the 2.7% gain of the CPI over the past twelve months. As for fourth GDP growth, it most likely will resemble the 2.7% increase in the CPI. The record prices for crude and heating oil are limiting the economy's growth and the spending by consumers. The median weekly earnings of the nation's 102.3 million full-time wage and salary workers were $632 in the third quarter of 2004, according to the BLS. This was 2.3% higher than a year earlier, and trailed the CPI that gained 2.7% over the same period. As such, with real negative weekly earnings in 2004, one can't expect the consumer to be in a jovial spending mood. In addition, the job market has many Americans in a funk as companies continue their lay offs and plant closings. Yesterday, Convergys announced it would cut 250 jobs in its information management division. Black & Decker is closing its Oldham manufacturing plant in West Jefferson, NCand around 250 people will lose their jobs. Huffy filed for Chapter 11.

Heating oil inventories fell for the third week, leaving supplies 11% below year earlier levels. Not surprisingly, heating oil jumped back to $1.55 a gallon, crude topped $55 a barrel for the first time, and natural gas gained to $7.73 per million BTU.

Gold rallied to a multi-month high to $425 per ounce.

One can never be too certain of what looks like a sure thing. The Yankees were three up and yet lost four straight. The chances of that happening? One might have answered there was no chance. As long as there is breathing, anything can take place. It's best not to call for an undertaker until the victim stops breathing.
10/20/04 Cell Phone Voters
I have mentioned that cell phone users are not contacted by the pollsters. The NPD Group estimates about 70% of the 24 million college-age group nationwide have cell phones and nearly 12% of young adults use cell phones only. There has been a strong push to register voters in the hip hop crowd. For example, Mary J. Blige and Outkast’s Andre 3000 plan to vote for the first time this year. Come November 2, plenty of hip hop voters will cast their votes. They could mean the difference in several neck-and-neck states.
GM will cut 900 employees from its Pontiac truck assembly plant in January due to sliding demand. AT&T will cut 279 jobs in Conyers, GA. Unifi will lay off 490 workers at a Kinston, NC plant. CuraGen will cut 110 jobs. Boeing Employees Credit Union is eliminating 85 positions or about 10.6% of their 800 staff members.
The dollar is approaching 1.26 to the euro.
According to a report released yesterday, 1.7 million veterans have no health insurance or access to gov’t hospitals and clinics. This is another example of compassionate conservatism.
According to the SF Chronicle, Google expects to add 372,000 advertiser accounts over the next four years.
Real average weekly earnings were unchanged from August to September after seasonal adjustment, according to the BLS. Average weekly hours were unchanged. Average weekly earnings were $530.88 in September. How many of those earners will be voting for Bush? Clearly, they are worse off than before he arrived in the White House.
The cost of hotel stays and other lodging away from home rose 2.7% in September.
Bill Clinton: "Terror leaves bitter enemies. The poison stays long in the well. The purpose, after all, is not to achieve military victory, but to achieve a change in circumstances by terror, to make us afraid of today, afraid of tomorrow, afraid of each other. Therefore, it cannot win unless we become unwitting accomplices, changing the way we think and feel and live."
The Bank of Canada raised its overnight lending rate to 2.5%.
Sinclair Broadcasting shares hit a 3 ½ year low. Maybe the management should concentrate on improving returns to its stockholders rather than focusing on politics.
U.S. September housing starts declined 6%. New construction of single-family homes fell 8.2%. Starts of apartment buildings rose 4.7%.
According to a study by the Project on Defense Alternatives, more than 27% of the military’s active duty troops are overseas, and more than half in combat zones, numbers not seen since the Vietnam War. More than 20% of the Army has already been deployed more than 120 days so far this year. In 2003, the total was 25%. Those numbers represent half of all deployable forces. Between 1994 and 2002, less than 5% of the Army was deployed for more than 120 days in any one year.
Mark Twain: "Terror is an efficacious agent only when it doesn’t last. In the long run there is more terror in threats than in execution, for when you get used to terror your emotions get dulled."
BET Founder and CEO Robert Johnson issued invitations on September 14 to Bush and Kerry to appear on the network to discuss issues of relevance to BET viewers. Kerry accepted, and his half-hour interview was televised on October 7. After waiting 35 days to respond, the station was informed that Bush could not make room in his schedule to appear on BET. Robert Johnson stated "there is little doubt that African- American voters have the power to decide the outcome of this election. Our invitations to President Bush and Senator Kerry were each candidate’s chance to show African-Americans that their issues, opinions, and votes really matter. To decline this opportunity does not send a very positive signal to African-Americans with just 14 days left before the election." Mr. Johmson, African-Americans are not a part of Bush’s base.
During the 2000 primary campaign, McCain turned to Bush on the Larry King Show and said "You should be ashamed." While standing next to Bush during a rally, a "fringe veteran" opined that McCain had abandoned the cause of veterans. That was an outright lie. Ed Montini of the Arizona Republic writes that "now he (McCain) supports the president wholeheartedly, saying with a polite grin after the debate in Tempe that Bush is ‘an honorable American who you can trust to lead this nation.’ Sort of the way the first President Bush must have looked when his mother told him to finish his broccoli."
I urge everyone to take time out to read an excellent article by Rick Perlstein entitled "The End of Democracy" in the Village Voice. The link to the article is:
http://www.villagevoice.com/issues/0442/perlstein.php
The recession of 2001 preceded the huge run-up in energy prices. Will they contribute to another recession or possibly to stagflation? Will Bush pay the price on November 2 for record high crude and heating oil prices? Why is Bush topping off the Strategic Oil Reserve when production is way down in the Gulf? Maybe we should ask Ken Lay. He was a participant in Bush’s energy policy. Then again, Lay is busy defending himself in two criminal matters.

Tuesday, October 19, 2004

10/19/04 Unworthy Of A Wartime President
According to Rreuters, Fed Board Governor Mark Olson stated yesterday that high oil prices were starting to slow U.S. economic growth. Tell that to Greenspan.
Ford’s auto business had a third quarter pre-tax loss of $609 million and their market share dropped to 19.7%.
In the third quarter, according to Challenger, Gray, & Christmas, announced job cuts in the technology sector soared 60% to 54,701, the highest figure in almost a year. According to John Challenger, increased job cutting is not being offset by increased hiring.
According to Robert Half Technology, only 9% of 1400 CIOs surveyed plan to expand their IT staffs in the fourth quarter.
China’s passenger car sales in September fell by more than 2%. It was the fifth straight monthly decline.
According to Editor & Publisher, Kerry leads Bush in newspaper endorsements by a margin of 45 to 30.
Foreign demand for U.S. assets declined in August to the lowest point in 2004.
U.S. chains’ weekly same-store sales were down 0.2%.
The cost of living adjustment for the 47+ million on Social Security will be about 2.5% in January. Meanwhile, Medicare premiums will increase by a record amount in dollar terms of $11.60 per month starting in January, compared with an increase of $7.90 per month this year.
IBM’s CFO: "About 45% of our revenue, and more than half of our profit, comes from annuity-like businesses, such as, long term service contracts, monthly-license charge software, maintenance, and financing contracts…revenue for Global Services is about half of IBM’s revenue…year to date, IBM has spent $4.4 billion to repurchase 47.8 million shares. Through, September, $874 million was paid out in dividends to shareholders. Debt, including Global Financing, totals $22 billion. The tax rate declined from 30% to 28.9% and pre-tax margins from 11.8% to 10.8%."
Texas Instruments stated that, primarily due to an increase in the U.S. tax benefit for export sales, the company’s effective tax rate was reduced to 21%. On September 8, the company estimated the tax rate at 26%. The fourth quarter tax rate is projected at 21%.
Charles Showalter, president of the American Federation of Government Employees National Homeland Security Council: "If President Bush believes that the U.S. is safer today than it was on September 11, he would be very surprised to learn that almost half of our members- front-line employees in the nation’s war on terror- would disagree. He might also be surprised to learn that 64% of those border security professionals believe that they have not been given the tools, training, equipment or support they need to prevent terrorists from entering the country. It is time for this Administration to wake up to reality. We live in a dangerous world and the President has talked a lot, but done very little to make it any safer. Since May, the Bureau of Customs and Border Protection has operated under a hiring freeze, due to mismanagement of funds. The legislation the President has praised in his speech today reduces spending on inspections to $20 million below what he requested."
John Gage, national president of the American Federation of Government Employees, represents some 20,000 employees of the Department of Homeland Security. He stated "on our nation’s borders, officers work with faulty equipment and expired body armor even as they face ever more violence in their daily work…the President takes credit for creating the Department of Homeland Security, which he opposed and held up for months. He congratulates himself for new funds allocated to the Transportation Security Administration, but neglects to note that even as he spoke, his allies are trying to return airport security to the hands of private contractors- just as it was during the attacks of September 11, 2001. Talk about a ‘September 10th attitude.’ The people of New Jersey suffered dearly on September 11th, losing 700 of their citizens in those brutal attacks. For Mr. Bush to exploit their grief by misrepresenting his record is unworthy of a wartime president."
Army LT. Gen. Ricardo S. Sanchez, the top U.S. commander in Iraq, complained last winter about a poor supply situation that threatened the Army troops’ ability to fight. Units were waiting an average of 40 days for critical spare parts, almost three times the Army’s average of 14 days. He wrote about the need to protective inserts to upgrade 36,000 sets of body armor, but the delivery had been twice postponed in the month prior to his writing. Sanchez concluded "I cannot sustain readiness without Army-level intervention…When America puts our troops in combat, I believe they deserve the best training, the best equipment, the full support of our government."
Bush’s performance record is unworthy of a wartime president.

Monday, October 18, 2004

10/18/04 We Had A Theme

A veteran State Dept officer directly involved in Iraq policy stated "we didn't go in with a plan (postwar). We went in with a theory." An Army War College report completed in February 2003, a month before the invasion, stated "the possibility of the United States winning the war and losing the peace in Iraq is real and serious." Douglas Feith, the number 3 official in the State Dept, remarked "we had a theme in our minds, a strategic idea, of liberation rather than occupation, giving them (Iraqis) more authority even at the expense of having things done with greater efficiency by coalition forces." It's no wonder that our invasion has not made the world safer. Postwar themes do not make for careful and effective postwar planning. As we have seen, they make for chaos and killing and maiming.

Presidential election voting begins today in Florida and Colorado. The Miami Herald is endorsing Kerry. The Tampa Tribune won't back either candidate. The Denver papers are split in their support.

According to the Center on Budget and Policy Priorities and the Urban Institute-Brookings Institution Tax Policy Center, households comprising the middle 20% of the income scale receive only 9%, or an average savings of $162, of the recently-passed tax cuts. Households with incomes ranging from $200,000 to $500,000 will receive benefits amounting to $2,390. Meanwhile, the withholding tax ceiling is drawn equally from the same two income groups. That is not a level playing field.

Pete Peterson, former secretary of commerce: "The ultimate test of a moral society is the kind of world it leaves to its children. And so I think about the concept that we're slipping our own kids and grandkids a check for our free lunch, I say we're failing the moral test."

Leonard Pitts Jr., Miami Herald syndicated columnist, writing about this presidential election: "Who cares if rules are broken, who cares if ethics are bent, who cares if lies are told, so long as it helps my guy. Truth is, we should all care. And we should all be appalled at the malleable morality and situational principles of those who do not."

A senior Bush official was reported as telling Ron Suskind that "we're the empire now, and when we act, we create our own reality. And while you're studying that reality- judiciously, as you will- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to study just what we do." Hopefully, the electorate will have something to say about this "empire" and this "reality" and these "actors." They are malignant cancers, and I have studied that subject matter judiciously.

According to a study released today by the Pew Hispanic Center, the wealth gap between Hispanics and whites is growing. In addition, there is a growing wealth gap between blacks and whites. Early on in a recession, the unemployment rate for blacks and Hispanics rises, and those two groups recover late from the recession. This is precisely what took place in the 2001 recession that was proclaimed over in November 2001.

Mark Twain: "If we would learn what the human race really is at bottom, we need only observe it in election times."

Sunday, October 17, 2004

10/17/04 A Very Different Election

In 2000, nearly 49% of voting-age Americans did not cast ballots. Starting tomorrow, voting will begin. That's right. Not November 2. The final returns will be Nov. 2. In my view, the polls are way off the mark. For example, Latinos compose a quarter of Arizona's population. There has been an enormous number of newly registered Hispanic voters- in the Southwest, Colorado, and Florida. In addition, in Arizona, voter registration is up sharply for Native Americans. We are about to witness a much higher voter turnout. In Florida, voting begins tomorrow and ends on Nov. 2. Once you vote, the vote cannot be changed. It's not like a proxy card in a corporate contest.

Since 1972, studies have shown that participation among voters younger than age 26 has fallen by 13%. According to the U.S. Census Bureau, about 24 million people ages 18 to 24 are eligible to vote this year. Results from the New Voters Project indicate that hundreds of thousands of newly registered youth voters have occurred. It is part of the changing voter landscape.

Voter registration is up for both single and married women. Many single women, who do not fall in the younger than age 26 group, are newly voter registrants. Many are cell phone users only, and polls are not taken of cell phone users only.

Most political analysts focus on Ohio as a key state, and it is. In my view, Colorado, Arizona, Nevada, and New Mexico could become determining states.

Bush: "Over the past four years, I have brought a straightforward approach to the presidency. I tell you what I'm going to do, and I keep my word." Since Bush decided to invade Iraq, at least 1103 U.S. soldiers have been killed and over 7700 wounded. This nation cannot afford Bush's word for another four years. If that happens, you will be able to count the carbs. There will be bread lines. You can go to the bank on that.

The dollar fell to a 7-month low against the euro. Can you imagine how low the dollar would be if Germany's economy did not have 10% plus unemployment?

Barack Obama: "There's not a liberal America and a conservative America. There is the United States of America."

Yesterday, Wal-Mart stated that, the number of people waiting to receive their mid-month paychecks to make purchases, was still pronounced. About 20% of their customers are described as paycheck-to-paycheck.

ISI Group's Ed Hyman, our nation's most accurate economic forecaster, reduced his forecast for 2005 GDP to 2.5% growth due to the impact of surging oil prices.

Steven Weiting, Citigroup economist, thinks that earnings for S&P 500 companies will grow but 6% next year, sharply below the Thomason First Call consensus of 9.4%.

Since August, Alaska Airlines has announced the layoff of 900 managers, mechanics, and aircraft cleaners. The company's CEO stated "they are permanent. We can't count on the economy coming back and fixing them. We have a cost problem that needs to be addresses. That takes tough decisions. No doubt there are more to come." We have a cost problem in federal government. Tough decisions have not been made. Bush has not vetoed one spending bill. Then again, he's the first president with an MBA. The degree could interfere with his ability to think.

The non-partisan Congressional Budget Office projects additional debt of $5.7 trillion should Bush's 2005 budget be enacted. That would increase the national debt to over $13 trillion. Thirteen would be a very unlucky number.

The hurricanes in Florida created massive losses. David Denslow, director of the Economic Analysis program of the Bureau of Economic and Business Research at the University of Florida, stated "total losses to private and public property, according to preliminary estimates, could be between $40 billion and $60 billion." Denslow is a member of Jed Bush's Council of Economic Advisors.

Cyrus McCormick: "Indomitable perseverence in a business properly understood always ensures ultimate success."

Nick Denton is publisher of Gawker Media. He observed "a lot of advertisers want to participate in blogs, but they don't know how."

Bernie Brillstein, Hollywood producer and manager: "You're nobody in this town unless somebody wants you dead."

Ken Langone, a founder of Home Depot and former head ot the NYSE compensation committee, stated of J.P. Morgan Chase's William Harrison, he's "the fucking genius that gave Enron all the money."