12/31/03 The Year Ends With An Integrity Red Alert
Downer cattle have been banned. Ephedra has been banned. Lying and/or half-truths have not been banned. Integrity is an endangered species. There is less of it every day. Do people fear bad publicity from telling the whole truth? The subject of outsourcing has gotten rather heated. Jobs continue to leave this country. Folks lose $33 per hour jobs, and after looking for similar work for 20 months, take two $7 per hour part-time jobs in order to barely make ends meet. That’s reality on Main Street. Life on Main Street is not selling at a two-year high. This is not the Nasdaq, the Dow, or the S&P. AT&T Wireless didn’t want to tell their 1900 employees about shifting those jobs overseas. Instead, the company informed the SEC in a filing. IBM’s newest center, the Millenium Park, a seven-story facility, will be completed in six months in India. Do you think it will sit empty? Linda Guyer, president of Alliance+IBM, believes as many as 40,000 of IBM’s 160,000 U.S. jobs will be transferred overseas by 2005. Dell is setting up a second subsidiary in India. Has the company announced that? Barclays Bank of England will move its call center jobs, which number 5000, abroad and mainly to India. Have they announced that? Archibald Candy Corp. started in Chicago 83 years ago. They make Fanny Mae and Fanny Farmer candy. They employ 900 people in the Chicago area and operate over 200 candy stores. The company filed a legal document on December 17 stating that on January 17 a bankruptcy filing would be made, all stores closed, all inventories liquidated, and “all employees will be terminated at filing.” This information will not be confirmed or denied by the company. The employees are left in the dark. Is this the way we will begin the New Year?
Automakers will release December sales figures on Monday. The adjusted annual rate will be about 18 million vehicles in December, and sales for all of 2003 will be about 16.5 million vehicles. Chrysler has offered 6-year interest-free loans and rebates of $6,000 on some models. Even Toyota has pitched some 5-year no-interest loans. Twenty eight years ago you could buy a Plymouth Duster for under $4,000. Incentives from automakers have risen to 13% of the auto price, and through November, these auto companies spent about $56 billion on incentives. CNW Marketing Research states that amount exceeds their product development budget. At the same time, U.S. automakers’ profit margins have been reduced to less than 3%. It should be noted that the stock prices for GM, Ford, and Chrysler are selling at or near their highs for 2003. As such, a stockholder might root for higher incentives. As incentives rise and profit margins decline, the stock price increases. That is new American capitalism. I apologize. I only told half the story. Over the past five years, shares of GM, Ford, and Chrysler, as a grouping, have declined about 40 percent. During this same period, shares of Toyota, Honda, and Nissan have risen 66 percent. Do you think your grandchildren will be driving new Fords or Chryslers in twenty years?
The International Council of Shopping Centers and UBS announced that same-store sales at major retail chains in the week of December 27 rose 2% from the prior week. They mentioned that consumers splurged in the latter part of their holiday shopping. They might have mentioned that retail sales for December dropped 1% from November’s numbers. On the other hand, WalMart and Target have no trouble telling their shareholders that their sales are running at the lower end of their expectations. The spinmeisters continue to tell the public that this holiday season was the best period since 1999 for retail sales. How can retail sales be rosy when about one in three people on Main Street state that jobs are hard to get?
With over 30 nations banning our beef exports, there will be a glut of beef on the market. The lower prices will, in my view, not be enough to generate needed demand. McDonald’s and Wendy’s state their business has not been hurt. Mad cow disease will not be leaving the headlines any time soon. It will linger as SARS did. The papers have another 81 animal stories to describe. It wasn’t so long ago that I was purchasing McDonald’s shares at $12 and change. Now they are double that number. Management has changed. The menu has improved. Sales are rising. Will that continue to warrant a share price of about $25? There are many buyers at $25. I had little company at $12 and change.
I will end on an interesting note. The lead article in the Christian Science Monitor is entitled “Was it really the U.S. that ‘got him’? The reference is to Saddam Hussein. There are many direct quotes in this article clearly stating we, in fact, were not responsible for the capture of Hussein. In sum, it is suggested the Kurds were holding Hussein prisoner and had drugged and beaten him. You might want to read the online article.
Tuesday, December 30, 2003
12/30/03 Window Dressing And The High Plains Downer
Yesterday the Nasdaq powered through the 2000 level. Since hitting a six-year low of 1,114 on October 9, 2002, the index has jumped 80%. It last stood at 2000 on January 15, 2002. Meanwhile the Dow joined the party, and finished the day at its highest point since March 21, 2002. It makes me happy to see jubilant faces, especially as we close in on a New Year. This is window dressing time, and besides stocks the euro, the pound, and gold all made multi-year highs.
I have a philosophy that states when things are at their best they are at their worst. When things are at their worst, they are at their best. Simply put, at times it can’t get better, and at other times, it can’t get worse. Look at the cattle industry. It was only earlier in this month that the industry was all smiles. They were having their best year ever. Yesterday marked the third consecutive day that cattle futures were down the limit. Yesterday, for the second time in the past week, adjustments were made in the daily price limits of cattle futures contracts. In just a matter of days, Jaime Willrett, chairman of the National Cattlemen’s International Markets Committee, stated “we’ve seen a reduction in the value per head of $180 to $200 for every animal in the states.” Over the course of the year there may be at least 30 million animals. If the prices were to remain down $200 per head, and amounts to a loss in value of $6 billion, and is double the value of our beef export business. That figure may not compare to the pork programs in the Congress, but to a cattle feed yard owner and others it is quite a chunk out of one’s hide. To make matters worse, producers will not be able to insure additional cattle until further notice. The USDA’s Risk Management Agency has announced that applications for Specific Coverage Endorsements for Fed Cattle and Feeder Cattle under the Livestock Risk Protection Insurance Policy are temporarily suspended pending further review of market conditions. The USDA maintains there is no risk for the public to consume beef, but the USDA will not assume the risk to insure more cattle. In sum, they are only willing to put your money where their mouth is while allowing high-risk animals to enter the food supply.
Before the announcement of the incident of mad cow disease, a Zogby poll indicated that 77% of the U.S. population felt it is unacceptable to use downed animals for human consumption. Obviously, the feelings of the public don’t mean much to the USDA. According to a proposed rule published in the Federal Register on January 31, 2003, the USDA stated “thus, if BSE were present in the United States, downer cattle infected with BSE could potentially be offered for slaughter and, if the clinical disease were not detected, pass ante mortem inspection. These cattle could then be slaughtered for human or animal food.” As Farm Sanctuary points out, downed animals are afflicted with a myriad of ailments besides mad cow disease. USDA records obtained through the Freedom of Information Act show that the USDA explicitly approved the consumption of meat from downed animals afflicted with hepatitis, gangrene, pneumonia, malignant lymphoma, and other ailments. Downer animals are believed more likely to harbor bacterial contamination than walking animals. As Tom Buddig stated, “the Europeans test cows for mad cow disease at a rate more than 45,000 times that of the USDA, and the Japanese test 180,000 times as much. Your ivory soap is 99.44 percent pure, buy your beef is 0.00055 percent sure, as far as BSE testing goes…there is a saying in the cattle industry, ‘if it’s on your plate, it must be safe.’” At he same time, “President Bush says ‘I have a full plate. And my agenda’s full, too.’” Buddig states “the first quote says you can unfailingly trust your government. The second says you can’t.”
The USDA and Canadian officials are tracing 81 other cattle from the same birth herd as the Washington mad cow. These are animals that presumably would have eaten the same feed and potentially become infected from it.
Dr. Prusiner is the Nobel Prize-winning neurologist who discovered prions, the proteins that cause BSE in cows and vCJD in humans. He wants all slaughtered cattle to be tested for BSE using a test he developed and one that InPro Biotechnology of San Francisco markets. Britain is to begin using his test in February.
In 2002, a GAO report to the Congress stated “in terms of the public health risk, consumers do not always know when foods and other products they use may contain central nervous system tissue…many edible products, such as beef stock, beef extract, and beef flavoring, are frequently made by boiling the skeletal remains (including the vertebral column) of the carcass.” According to the Center for Science in the Public Interest, spinal cord contamination may also be found in U.S. hot dogs, hamburgers, pizza toppings, and taco fillings. In fact, a 2002 USDA survey showed that approximately 35% of high risk meat products tested positive for central nervous system tissues.” The GAO report further stated “in light of the experiences in Japan and other countries that were thought to be BSE free, we believe that it would be prudent for the USDA to consider taking some action to inform consumers when products may contain central nervous system or other tissue that could pose a risk if taken from a BSE-infected animal.” The USDA did not follow this recommendation.
Last month the New England Journal of Medicine revealed that Swiss scientists found prions in the muscles of human CJD victims on autopsy. Eight out of the 32 muscle samples turned up positive for the deadly prions.
Dr. Carleton Gajdusek was also awarded the Nobel Prize in Medicine for his work on mad cow-like diseases. On Dateline NBC he stated “it’s got to be in the pigs as well as the cattle. It’s got to be passing through the chickens.” Cattle remains can be rendered down and fed to pigs, and then the pig remains can be fed back to the cattle. Or rendered cattle remains can be fed to chickens and then the chicken manure can be legally fed back to the cows. We can also include horses in this discussion. I think we get the idea by now. The 2002 GAO report concluded “BSE may be silently incubating somewhere in the United States. If that is the case, then the FDA’s failure to enforce the feed ban may already have placed U.S. herds and, in turn, the human food supply at risk. The FDA has no clear enforcement strategy for dealing with firms that do not obey the feed ban…moreover, the FDA has been using inaccurate, incomplete, and unreliable data to track and oversee feed ban compliance.”
Which affords less risk, buying the Nasdaq index at 2000, the Dow at 10,400, or beef, pork, or chicken? To lessen the risk, let’s buy some insurance. It has been said that the incubation period can last up to decades long. Are they talking about bubbles or downers? Only the Shadow knows!!!!!!!!!!
Yesterday the Nasdaq powered through the 2000 level. Since hitting a six-year low of 1,114 on October 9, 2002, the index has jumped 80%. It last stood at 2000 on January 15, 2002. Meanwhile the Dow joined the party, and finished the day at its highest point since March 21, 2002. It makes me happy to see jubilant faces, especially as we close in on a New Year. This is window dressing time, and besides stocks the euro, the pound, and gold all made multi-year highs.
I have a philosophy that states when things are at their best they are at their worst. When things are at their worst, they are at their best. Simply put, at times it can’t get better, and at other times, it can’t get worse. Look at the cattle industry. It was only earlier in this month that the industry was all smiles. They were having their best year ever. Yesterday marked the third consecutive day that cattle futures were down the limit. Yesterday, for the second time in the past week, adjustments were made in the daily price limits of cattle futures contracts. In just a matter of days, Jaime Willrett, chairman of the National Cattlemen’s International Markets Committee, stated “we’ve seen a reduction in the value per head of $180 to $200 for every animal in the states.” Over the course of the year there may be at least 30 million animals. If the prices were to remain down $200 per head, and amounts to a loss in value of $6 billion, and is double the value of our beef export business. That figure may not compare to the pork programs in the Congress, but to a cattle feed yard owner and others it is quite a chunk out of one’s hide. To make matters worse, producers will not be able to insure additional cattle until further notice. The USDA’s Risk Management Agency has announced that applications for Specific Coverage Endorsements for Fed Cattle and Feeder Cattle under the Livestock Risk Protection Insurance Policy are temporarily suspended pending further review of market conditions. The USDA maintains there is no risk for the public to consume beef, but the USDA will not assume the risk to insure more cattle. In sum, they are only willing to put your money where their mouth is while allowing high-risk animals to enter the food supply.
Before the announcement of the incident of mad cow disease, a Zogby poll indicated that 77% of the U.S. population felt it is unacceptable to use downed animals for human consumption. Obviously, the feelings of the public don’t mean much to the USDA. According to a proposed rule published in the Federal Register on January 31, 2003, the USDA stated “thus, if BSE were present in the United States, downer cattle infected with BSE could potentially be offered for slaughter and, if the clinical disease were not detected, pass ante mortem inspection. These cattle could then be slaughtered for human or animal food.” As Farm Sanctuary points out, downed animals are afflicted with a myriad of ailments besides mad cow disease. USDA records obtained through the Freedom of Information Act show that the USDA explicitly approved the consumption of meat from downed animals afflicted with hepatitis, gangrene, pneumonia, malignant lymphoma, and other ailments. Downer animals are believed more likely to harbor bacterial contamination than walking animals. As Tom Buddig stated, “the Europeans test cows for mad cow disease at a rate more than 45,000 times that of the USDA, and the Japanese test 180,000 times as much. Your ivory soap is 99.44 percent pure, buy your beef is 0.00055 percent sure, as far as BSE testing goes…there is a saying in the cattle industry, ‘if it’s on your plate, it must be safe.’” At he same time, “President Bush says ‘I have a full plate. And my agenda’s full, too.’” Buddig states “the first quote says you can unfailingly trust your government. The second says you can’t.”
The USDA and Canadian officials are tracing 81 other cattle from the same birth herd as the Washington mad cow. These are animals that presumably would have eaten the same feed and potentially become infected from it.
Dr. Prusiner is the Nobel Prize-winning neurologist who discovered prions, the proteins that cause BSE in cows and vCJD in humans. He wants all slaughtered cattle to be tested for BSE using a test he developed and one that InPro Biotechnology of San Francisco markets. Britain is to begin using his test in February.
In 2002, a GAO report to the Congress stated “in terms of the public health risk, consumers do not always know when foods and other products they use may contain central nervous system tissue…many edible products, such as beef stock, beef extract, and beef flavoring, are frequently made by boiling the skeletal remains (including the vertebral column) of the carcass.” According to the Center for Science in the Public Interest, spinal cord contamination may also be found in U.S. hot dogs, hamburgers, pizza toppings, and taco fillings. In fact, a 2002 USDA survey showed that approximately 35% of high risk meat products tested positive for central nervous system tissues.” The GAO report further stated “in light of the experiences in Japan and other countries that were thought to be BSE free, we believe that it would be prudent for the USDA to consider taking some action to inform consumers when products may contain central nervous system or other tissue that could pose a risk if taken from a BSE-infected animal.” The USDA did not follow this recommendation.
Last month the New England Journal of Medicine revealed that Swiss scientists found prions in the muscles of human CJD victims on autopsy. Eight out of the 32 muscle samples turned up positive for the deadly prions.
Dr. Carleton Gajdusek was also awarded the Nobel Prize in Medicine for his work on mad cow-like diseases. On Dateline NBC he stated “it’s got to be in the pigs as well as the cattle. It’s got to be passing through the chickens.” Cattle remains can be rendered down and fed to pigs, and then the pig remains can be fed back to the cattle. Or rendered cattle remains can be fed to chickens and then the chicken manure can be legally fed back to the cows. We can also include horses in this discussion. I think we get the idea by now. The 2002 GAO report concluded “BSE may be silently incubating somewhere in the United States. If that is the case, then the FDA’s failure to enforce the feed ban may already have placed U.S. herds and, in turn, the human food supply at risk. The FDA has no clear enforcement strategy for dealing with firms that do not obey the feed ban…moreover, the FDA has been using inaccurate, incomplete, and unreliable data to track and oversee feed ban compliance.”
Which affords less risk, buying the Nasdaq index at 2000, the Dow at 10,400, or beef, pork, or chicken? To lessen the risk, let’s buy some insurance. It has been said that the incubation period can last up to decades long. Are they talking about bubbles or downers? Only the Shadow knows!!!!!!!!!!
Monday, December 29, 2003
12/29/03 Uncertainties
The euro has gained 19% against the dollar this year, and traded at a record high today. A senior European Central Bank official stated earlier today that “the rapid rise of the euro brings an element of uncertainty into our forecasts. We must examine the whole picture.” The dollar is trading near a 3-year low at 106.87 yen.
Software developer Walter Wilson: “the plumbing hourly wage is about the same as a software developer now, and they can’t send plumbers overseas.”
According to the American Express Retail Index, one in three shoppers state they will return gifts after the holidays. About 28% of consumers who return a gift and buy something new spend more than the cost of the item, but most consumers spend about the same. A spokeswoman for WalMart remarked they will exchange, refund, or repair its merchandise, usually within 90 days and even without the receipt.
The impact of the Japan’s beef ban is greater on some states than others. At least a quarter of the U.S. beef exported to Japan comes from Iowa and its neighbors, the area known for high quality “I-80 beef.” The impact of the mad cow incident is being felt in Iowa. Some market-ready Iowa cattle sold at auction or directly to meat packers late last week for less than $80 per hundredweight. That’s about $20 less than sale prices the previous week.
Ken Petersen, an official with the USDA Food Safety and Inspection Service: “The risk related to consumption of this muscle meat is virtually zero. The recalled meat represents essentially zero risk to consumers.” There is some discrepancy in the records on the animal in question. Initial information obtained from the index herd owner indicate this animal was 4 to 4 ½ years old. Canada’s records indicate she was born in April 1997, making her 6 ½ years old. Canadian papers show the cow had two calves before it was exported to the United States, contrary to U.S. documents which classified the animal as a heifer when it arrived, meaning it had never born calves. Since Canada has a tracking from birth policy in place, and the U.S. does not, I am confident the DNA tests will prove Canadian records are the correct ones. Age of the animal is important because the cow may have been born before the U.S. and Canada in 1997 banned certain feed that is considered the most likely source of mad cow disease. The disease has an incubation period of about four to five years. Dr. Stephen Sundlof, head of the FDA’s Center for Veterinary medicine, stated an animal could get sick if eats a little bit of infected material, as little as half a gram. He stated “even if a small amount of brain or central nervous system material were to get into cattle feed, there is the potential for even that very small dose to result in this disease. It’s not known what dose would infect humans, but it would be higher for humans than for cattle.”
Not much has been written about the byproducts from the tainted Holstein. In fact, the secondary parts, hooves, bones, fat, innards, are used as bone meal for gardening soil, soaps, candles, hand cream, antifreeze, poultry feed and other products. Dalton Hobbs, spokesman for the Oregon Department of Agriculture, stated “it’s like the old Upton Sinclair line- ‘we use everything but the squeal.’” “We have nearly 100% utilization of the animal. But when you have so many niche markets, it makes it incredibly challenging to trace where this one cow may have gone.” Baker Commodities, a Los Angeles renderer, announced Friday it has voluntarily withheld 800 tons of cow byproduct processed in its plants in Seattle and Tacoma. Companies that use bone meal from cows to create fertilizers popular with rose growers may find themselves in the headlines. In 1996, the Royal Horticultural Society of London released an advisory, warning gardeners to wear face masks after it was reported that the dust from the bone-meal soil could carry mad cow disease. At the height of Britain’s mad cow epidemic in the 1990s, three victims of the human form of mad cow were found to be gardeners. It should also be noted that, even though the FDA in 1997 banned cow feed that included cow byproducts, feeding it to poultry remains legal. Although chickens cannot contract BSE, they could act as carriers of the disease if they pick up prions in their feed and are themselves processed into cattle feed. Do you think there is uncertainty about the accuracy of the statement that the recalled meat represents essentially zero risk to consumers?
Has anyone noticed that the terrorist attacks and bombings have doubled over the past few months in Iraq? An increasing number of our soldiers, foreign troops, and civilians have been wounded as well as killed over the past three months. In fact, since the capture of Saddam Hussein, the casualties show there is less safety in Iraq for our troops. A total of 211 U.S. soldiers have been killed in action since Bush declared major combat over on May 1 in Iraq.
Ron DeHaven, chief veterinarian with the Department of Agriculture: “ the restrictions on imports that are in place now are not well-founded in science.” He called the ban on imports of U.S. livestock and beef an “overreaction.” Inasmuch as we seem to confuse heifers with cows, maybe we are the ones in need of more scientific training. The beef recall encompasses Washington, Oregon, California, Nevada, Idaho, Montana, Alaska, Hawaii, and Guam. How many other states will be added to this growing list?
Amazon.com sold about 70,000 gift certificates on December 24.
The euro has gained 19% against the dollar this year, and traded at a record high today. A senior European Central Bank official stated earlier today that “the rapid rise of the euro brings an element of uncertainty into our forecasts. We must examine the whole picture.” The dollar is trading near a 3-year low at 106.87 yen.
Software developer Walter Wilson: “the plumbing hourly wage is about the same as a software developer now, and they can’t send plumbers overseas.”
According to the American Express Retail Index, one in three shoppers state they will return gifts after the holidays. About 28% of consumers who return a gift and buy something new spend more than the cost of the item, but most consumers spend about the same. A spokeswoman for WalMart remarked they will exchange, refund, or repair its merchandise, usually within 90 days and even without the receipt.
The impact of the Japan’s beef ban is greater on some states than others. At least a quarter of the U.S. beef exported to Japan comes from Iowa and its neighbors, the area known for high quality “I-80 beef.” The impact of the mad cow incident is being felt in Iowa. Some market-ready Iowa cattle sold at auction or directly to meat packers late last week for less than $80 per hundredweight. That’s about $20 less than sale prices the previous week.
Ken Petersen, an official with the USDA Food Safety and Inspection Service: “The risk related to consumption of this muscle meat is virtually zero. The recalled meat represents essentially zero risk to consumers.” There is some discrepancy in the records on the animal in question. Initial information obtained from the index herd owner indicate this animal was 4 to 4 ½ years old. Canada’s records indicate she was born in April 1997, making her 6 ½ years old. Canadian papers show the cow had two calves before it was exported to the United States, contrary to U.S. documents which classified the animal as a heifer when it arrived, meaning it had never born calves. Since Canada has a tracking from birth policy in place, and the U.S. does not, I am confident the DNA tests will prove Canadian records are the correct ones. Age of the animal is important because the cow may have been born before the U.S. and Canada in 1997 banned certain feed that is considered the most likely source of mad cow disease. The disease has an incubation period of about four to five years. Dr. Stephen Sundlof, head of the FDA’s Center for Veterinary medicine, stated an animal could get sick if eats a little bit of infected material, as little as half a gram. He stated “even if a small amount of brain or central nervous system material were to get into cattle feed, there is the potential for even that very small dose to result in this disease. It’s not known what dose would infect humans, but it would be higher for humans than for cattle.”
Not much has been written about the byproducts from the tainted Holstein. In fact, the secondary parts, hooves, bones, fat, innards, are used as bone meal for gardening soil, soaps, candles, hand cream, antifreeze, poultry feed and other products. Dalton Hobbs, spokesman for the Oregon Department of Agriculture, stated “it’s like the old Upton Sinclair line- ‘we use everything but the squeal.’” “We have nearly 100% utilization of the animal. But when you have so many niche markets, it makes it incredibly challenging to trace where this one cow may have gone.” Baker Commodities, a Los Angeles renderer, announced Friday it has voluntarily withheld 800 tons of cow byproduct processed in its plants in Seattle and Tacoma. Companies that use bone meal from cows to create fertilizers popular with rose growers may find themselves in the headlines. In 1996, the Royal Horticultural Society of London released an advisory, warning gardeners to wear face masks after it was reported that the dust from the bone-meal soil could carry mad cow disease. At the height of Britain’s mad cow epidemic in the 1990s, three victims of the human form of mad cow were found to be gardeners. It should also be noted that, even though the FDA in 1997 banned cow feed that included cow byproducts, feeding it to poultry remains legal. Although chickens cannot contract BSE, they could act as carriers of the disease if they pick up prions in their feed and are themselves processed into cattle feed. Do you think there is uncertainty about the accuracy of the statement that the recalled meat represents essentially zero risk to consumers?
Has anyone noticed that the terrorist attacks and bombings have doubled over the past few months in Iraq? An increasing number of our soldiers, foreign troops, and civilians have been wounded as well as killed over the past three months. In fact, since the capture of Saddam Hussein, the casualties show there is less safety in Iraq for our troops. A total of 211 U.S. soldiers have been killed in action since Bush declared major combat over on May 1 in Iraq.
Ron DeHaven, chief veterinarian with the Department of Agriculture: “ the restrictions on imports that are in place now are not well-founded in science.” He called the ban on imports of U.S. livestock and beef an “overreaction.” Inasmuch as we seem to confuse heifers with cows, maybe we are the ones in need of more scientific training. The beef recall encompasses Washington, Oregon, California, Nevada, Idaho, Montana, Alaska, Hawaii, and Guam. How many other states will be added to this growing list?
Amazon.com sold about 70,000 gift certificates on December 24.
Sunday, December 28, 2003
12/28/03 Dissecting Misdirection And Misspeak
Statistics will indicate that consumer spending increased in 2003 from the prior year. According to the Federal Reserve, excluding mortgage debt, consumers owe approximately $2 trillion, up from $1.5 trillion only three years ago. Bankruptcy filings reach their highest point between March and May of each year. In all probability, we won’t have to wait much longer for them to reach record levels. Too many Americans are living beyond their means, and that is also case for the Congress and our President. The bad news is 2003 is the year for our greatest deficits as a nation and as consumers. The worst news is that 2004 is expected to reach even higher deficit levels.
The stock market has put on a magnificent performance this year. There is no research to support this claim, but I think stock prices may move in tandem with egg prices. According to the Ohio Poultry Association, some producers went out of business between 1999 and 2002. Many dotcom companies went out of business over the last few years, and caused the Nasdaq to tank. There were fewer birds in flocks and fewer IT and software companies. People’s appetites changed, and they began to eat more eggs and also munched on more $1 IT and software stocks. With a diminished supply and growing demand, the prices rose. Egg prices have hit their highest level in 23 years. Laying an egg can be a good thing.
I am watching the Supreme Court to see whether they will lay an egg, and that would not be a good thing. As we know, our highest court played an important role in the last presidential election. Hopefully, 2004 will not prove to be the second time around for this court. The Supreme Court has agreed to hear an appeal from Cheney on a federal court order to supply documents generated from his energy task force. The lawsuit against Cheney was originally filed in the U.S. District Court for D.C. and that court ordered Cheney to release task force documents. He appealed the case to a federal appellate court three-judge panel, which again ordered the vice president to release the documents. Then, Cheney went to a nine-judge appellate court, and that court refused to reconsider the matter. Why the Supreme Court agreed to hear this case I do not know. Cheney’s Justice Department lawyers insist he is immune to the court order to release the papers on grounds of a constitutional separation of papers. There are two well-known rulings from the Supreme Court that indicate Cheney does not possess this immunity. Those cases are the United States vs. Nixon and Clinton vs. Paula Jones. Whether the Bush administration can push this matter beyond the 2004 presidential election is up to the Supreme Court. It is important the case be decided prior to the election. How many times at bat is Cheney afforded? He has struck out in three separate courts. The electoral college brought us the Bush-Cheney team. Voters are entitled to know what took place in meetings between Kenneth Lay of Enron and the vice president, and what impact those meetings had on formulating our nation’s energy policy.
As previously noted, there are 104 million cattle in the United States, 35 million are slaughtered each year, and each year at least 200,000 cattle are downed, and how many of the latter could have mad cow disease no one knows for certain. Rep. Charles Stenholm, D-Texas and a powerful rancher, has maintained that the government’s screening power was tight enough that a downer “will never find its way into the food chain.” Carol Tucker Foreman ran the Agriculture Department’s food-safety programs in the Carter administration, and remarked that “this is one of those times when unrealistic optimism triumphed over responsibility to the public.” I think it goes a lot further than that. It encompasses greed and the desire to maintain the claim that the American beef industry is disease-free. Look at the way the current mad cow situation is being handled. We claim the diseased cow had its origins in Canada, and therefore, we should not be punished for this isolated incident. Dr. Stephen Sundlof, director of the FDA’s Center for Veterinary Medicine, stated “it’s going to be a matter of trying to determine where this animal may have gotten contaminated feed. The average incubation period from the time of exposure to the development of symptoms is about four-to-five years, so it can be difficult to trace back where the feed originated. It’s not something people keep real precise records of, so it may not be possible to determine the origin of the infected feed.” I doubt whether this latter statement will make headline news. Misdirection will once again be the recipe for disseminating news to the public. When do our elected officials take responsibility for providing the whole story?
The government has no excuse in its refusal to insist all cattle be tagged at birth for tracing purposes. Other countries do it, and Canada is one example. Technology is available to handle this task. Global Technology Resources (GTR) has patented GPS technology combined with RFID. It provides real-time information and tracking of food assets globally. As the company’s president noted, “if contamination does occur, we can pinpoint where contaminants entered the supply chain and isolate the problem.” Information on farms, ranches, processing plants, transport vehicles, storage vehicles, supermarkets, and restaurants—all is provided.
Statistics will indicate that consumer spending increased in 2003 from the prior year. According to the Federal Reserve, excluding mortgage debt, consumers owe approximately $2 trillion, up from $1.5 trillion only three years ago. Bankruptcy filings reach their highest point between March and May of each year. In all probability, we won’t have to wait much longer for them to reach record levels. Too many Americans are living beyond their means, and that is also case for the Congress and our President. The bad news is 2003 is the year for our greatest deficits as a nation and as consumers. The worst news is that 2004 is expected to reach even higher deficit levels.
The stock market has put on a magnificent performance this year. There is no research to support this claim, but I think stock prices may move in tandem with egg prices. According to the Ohio Poultry Association, some producers went out of business between 1999 and 2002. Many dotcom companies went out of business over the last few years, and caused the Nasdaq to tank. There were fewer birds in flocks and fewer IT and software companies. People’s appetites changed, and they began to eat more eggs and also munched on more $1 IT and software stocks. With a diminished supply and growing demand, the prices rose. Egg prices have hit their highest level in 23 years. Laying an egg can be a good thing.
I am watching the Supreme Court to see whether they will lay an egg, and that would not be a good thing. As we know, our highest court played an important role in the last presidential election. Hopefully, 2004 will not prove to be the second time around for this court. The Supreme Court has agreed to hear an appeal from Cheney on a federal court order to supply documents generated from his energy task force. The lawsuit against Cheney was originally filed in the U.S. District Court for D.C. and that court ordered Cheney to release task force documents. He appealed the case to a federal appellate court three-judge panel, which again ordered the vice president to release the documents. Then, Cheney went to a nine-judge appellate court, and that court refused to reconsider the matter. Why the Supreme Court agreed to hear this case I do not know. Cheney’s Justice Department lawyers insist he is immune to the court order to release the papers on grounds of a constitutional separation of papers. There are two well-known rulings from the Supreme Court that indicate Cheney does not possess this immunity. Those cases are the United States vs. Nixon and Clinton vs. Paula Jones. Whether the Bush administration can push this matter beyond the 2004 presidential election is up to the Supreme Court. It is important the case be decided prior to the election. How many times at bat is Cheney afforded? He has struck out in three separate courts. The electoral college brought us the Bush-Cheney team. Voters are entitled to know what took place in meetings between Kenneth Lay of Enron and the vice president, and what impact those meetings had on formulating our nation’s energy policy.
As previously noted, there are 104 million cattle in the United States, 35 million are slaughtered each year, and each year at least 200,000 cattle are downed, and how many of the latter could have mad cow disease no one knows for certain. Rep. Charles Stenholm, D-Texas and a powerful rancher, has maintained that the government’s screening power was tight enough that a downer “will never find its way into the food chain.” Carol Tucker Foreman ran the Agriculture Department’s food-safety programs in the Carter administration, and remarked that “this is one of those times when unrealistic optimism triumphed over responsibility to the public.” I think it goes a lot further than that. It encompasses greed and the desire to maintain the claim that the American beef industry is disease-free. Look at the way the current mad cow situation is being handled. We claim the diseased cow had its origins in Canada, and therefore, we should not be punished for this isolated incident. Dr. Stephen Sundlof, director of the FDA’s Center for Veterinary Medicine, stated “it’s going to be a matter of trying to determine where this animal may have gotten contaminated feed. The average incubation period from the time of exposure to the development of symptoms is about four-to-five years, so it can be difficult to trace back where the feed originated. It’s not something people keep real precise records of, so it may not be possible to determine the origin of the infected feed.” I doubt whether this latter statement will make headline news. Misdirection will once again be the recipe for disseminating news to the public. When do our elected officials take responsibility for providing the whole story?
The government has no excuse in its refusal to insist all cattle be tagged at birth for tracing purposes. Other countries do it, and Canada is one example. Technology is available to handle this task. Global Technology Resources (GTR) has patented GPS technology combined with RFID. It provides real-time information and tracking of food assets globally. As the company’s president noted, “if contamination does occur, we can pinpoint where contaminants entered the supply chain and isolate the problem.” Information on farms, ranches, processing plants, transport vehicles, storage vehicles, supermarkets, and restaurants—all is provided.
Saturday, December 27, 2003
12/27/03 Terrorist Attacks, Earthquakes, Mud Slides, Avalanches, Gas Explosion, Mad Cow, And SARS
The headline did not have room to include the flu epidemic, disappointing holiday revenues for most retailers, the biggest monthly plunge in durable goods orders in 14 months, and the slowest pace of new home sales in 6 months. Overall, it was hardly business as usual.
The U.S. banned Canadian cattle on May 20, and our cattle futures went on to rise 25% until this week’s announcement of mad cow. On Wednesday futures dropped the daily limit of 1.5 cents. The limit was raised on Friday to 3 cents, and again traded down the limit. On Monday the trading limit will be increased to 5 cents. Approximately 34 countries have banned the importation of U.S. beef. As far as profitability is concerned, this has been the best year ever for the cattle industry. Future results will depend on the U.S. consumer’s appetite for beef. As the consumer’s knowledge base improves, his desire to eat beef may decline. We learned what we already knew, and that was the USDA stated the mad cow investigation could take months. Originally, they said it would be a few days. USDA’s chief veterinarian Ron DeHaven stated “potentially many states could be involved.” Let’s take a visit to Texas. According to the U.S. Department of Agriculture, Texas was home to 15.5 million of the nation’s 104 million head of cattle as of July 1. They are spread across about 150,000 cattle operations, part of an industry that contributes $16 billion annually to the Texas economy.
The USDA stated they would increase the number of tests for mad cow next year from 20,600 to 38,000. That doesn’t impress me. That increased testing amounts to roughly one in every 1,000 slaughtered cattle in one year in the U.S. We are the world’s largest exporter of beef and related products. Insufficient testing will cripple the $175 billion-a year U.S. beef industry, including annual beef sales and revenue from related businesses such as processing and packing. It should be noted that Japan tests every animal prior to human consumption. Since September 2001, the Japanese government has discovered nine cases of mad cow disease. You can bet we have more than that. We have larger numbers of cattle.
You think I’m trying to scare you. That’s not true. I am giving you facts not readily made available by the USDA. I will provide some examples. A 2002 survey by the USDA found “unacceptable” central nervous system residue, including spinal cord tissue, in 35% of the meat that ends up in hot dogs, pizza toppings, and hamburger. The Food Safety Inspection Service, a branch of the USDA, stated in the survey that “the presence of spinal cord in meat is not expected and cannot be allowed in products produced through the meat recovery system.” How does this happen? Let me take you inside the slaughterhouse. This is not for young children. The spinal cord is severed with a band saw, and spinal cord fluid is sprayed over the carcass creating contamination. Are you still with me? If the animal’s brain is compressed with a stun gun, brain tissue can travel into the blood stream and the body. This is a source of contamination. It gets better. The Advanced Meat Recovery System strips the last remaining meat from the skeleton, and spinal cord and nervous system tissues find their way into the product, and this is confirmed by the 2002 survey. Unfortunately, there is more. The remains of the spinal cord and other skeletal parts are sent to rendering plants. They are combined with other animal residues to make pet food, feed for pigs and chickens and other products.
Michael Greger is a New York state doctor and nationally known for his watchdog ways on mad cow disease. He understands the extent of the problem when he stated “no one really knows what the final death toll is going to be and how many people are incubating the disease.” Why does he make that statement? The symptoms of the disease take anywhere from 10 to perhaps 40 years to appear in people. Compare Dr. Greger’s observations with those of Rosemary Mucklow, head of the National Meat Association in Oakland, California, who remarked “do mistakes happen? Once in a while they can. Once in a while people look both ways before they cross the road, and they still get run over.” Ms. Mucklow, your organization does not have a tag tracing the life of each cow and only 1% of the cows is tested. I have a feeling you might be hit by a lot of cars, so to speak, yet to appear from around the bend.
When it comes to investing, I have said over and over again that it is your money. The decision is ultimately yours. Your safety and the safety of your family are your decision. I can state that there is less risk eating boneless steaks and boneless roasts than hamburgers, hot dogs, sausages, and various processed toppings for pizzas and tacos. The answer is not to switch to organic beef. The inspection systems are essentially the same, and much sameness exists in the feeding of the animal. The beef-eating scare will be in every neighborhood for years. Many criticized me for writing extensively after the initial outbreak of SARS. Those people truly did not grasp the depth of the problem. The same is the case with mad cow disease. A new case of SARS was just discovered in China. I can’t predict the next case of mad cow disease; however, there will be others. No one can say how many are out there incubating in animals and humans.
Many have asked through this past year why I don’t include photos, video clips, banners, and audio along with my daily musings. I’m not handy. I change toilet paper and light bulbs. I don’t charge admission and I don’t count the number of daily visitors. I welcome your stopping by and hope that I can add something to your daily decision making. My writings should serve as an alternative form of thought. They are based on facts. I have no hidden agenda. Whether you believe what I write is your decision. My words are not for sale. You will not find an end-of-the-year clearance here. This is a government-free zone. It doesn’t get better than that.
I would like to close by congratulating my many good friends and associates from and in India. This has been a year of many accomplishments and successes in a very short period of time. According to a survey published by the News India-Times, the top 92 Indian American-owned companies in the U.S. together generated $2.2 billion in revenue in 2002and employed 18,337 full-time workers. I feel quite confident that those same companies will show improved results for 2003, and that is despite many representing the IT and services sector in addition to manufacturing, distribution, R&D, and other professional services.
The headline did not have room to include the flu epidemic, disappointing holiday revenues for most retailers, the biggest monthly plunge in durable goods orders in 14 months, and the slowest pace of new home sales in 6 months. Overall, it was hardly business as usual.
The U.S. banned Canadian cattle on May 20, and our cattle futures went on to rise 25% until this week’s announcement of mad cow. On Wednesday futures dropped the daily limit of 1.5 cents. The limit was raised on Friday to 3 cents, and again traded down the limit. On Monday the trading limit will be increased to 5 cents. Approximately 34 countries have banned the importation of U.S. beef. As far as profitability is concerned, this has been the best year ever for the cattle industry. Future results will depend on the U.S. consumer’s appetite for beef. As the consumer’s knowledge base improves, his desire to eat beef may decline. We learned what we already knew, and that was the USDA stated the mad cow investigation could take months. Originally, they said it would be a few days. USDA’s chief veterinarian Ron DeHaven stated “potentially many states could be involved.” Let’s take a visit to Texas. According to the U.S. Department of Agriculture, Texas was home to 15.5 million of the nation’s 104 million head of cattle as of July 1. They are spread across about 150,000 cattle operations, part of an industry that contributes $16 billion annually to the Texas economy.
The USDA stated they would increase the number of tests for mad cow next year from 20,600 to 38,000. That doesn’t impress me. That increased testing amounts to roughly one in every 1,000 slaughtered cattle in one year in the U.S. We are the world’s largest exporter of beef and related products. Insufficient testing will cripple the $175 billion-a year U.S. beef industry, including annual beef sales and revenue from related businesses such as processing and packing. It should be noted that Japan tests every animal prior to human consumption. Since September 2001, the Japanese government has discovered nine cases of mad cow disease. You can bet we have more than that. We have larger numbers of cattle.
You think I’m trying to scare you. That’s not true. I am giving you facts not readily made available by the USDA. I will provide some examples. A 2002 survey by the USDA found “unacceptable” central nervous system residue, including spinal cord tissue, in 35% of the meat that ends up in hot dogs, pizza toppings, and hamburger. The Food Safety Inspection Service, a branch of the USDA, stated in the survey that “the presence of spinal cord in meat is not expected and cannot be allowed in products produced through the meat recovery system.” How does this happen? Let me take you inside the slaughterhouse. This is not for young children. The spinal cord is severed with a band saw, and spinal cord fluid is sprayed over the carcass creating contamination. Are you still with me? If the animal’s brain is compressed with a stun gun, brain tissue can travel into the blood stream and the body. This is a source of contamination. It gets better. The Advanced Meat Recovery System strips the last remaining meat from the skeleton, and spinal cord and nervous system tissues find their way into the product, and this is confirmed by the 2002 survey. Unfortunately, there is more. The remains of the spinal cord and other skeletal parts are sent to rendering plants. They are combined with other animal residues to make pet food, feed for pigs and chickens and other products.
Michael Greger is a New York state doctor and nationally known for his watchdog ways on mad cow disease. He understands the extent of the problem when he stated “no one really knows what the final death toll is going to be and how many people are incubating the disease.” Why does he make that statement? The symptoms of the disease take anywhere from 10 to perhaps 40 years to appear in people. Compare Dr. Greger’s observations with those of Rosemary Mucklow, head of the National Meat Association in Oakland, California, who remarked “do mistakes happen? Once in a while they can. Once in a while people look both ways before they cross the road, and they still get run over.” Ms. Mucklow, your organization does not have a tag tracing the life of each cow and only 1% of the cows is tested. I have a feeling you might be hit by a lot of cars, so to speak, yet to appear from around the bend.
When it comes to investing, I have said over and over again that it is your money. The decision is ultimately yours. Your safety and the safety of your family are your decision. I can state that there is less risk eating boneless steaks and boneless roasts than hamburgers, hot dogs, sausages, and various processed toppings for pizzas and tacos. The answer is not to switch to organic beef. The inspection systems are essentially the same, and much sameness exists in the feeding of the animal. The beef-eating scare will be in every neighborhood for years. Many criticized me for writing extensively after the initial outbreak of SARS. Those people truly did not grasp the depth of the problem. The same is the case with mad cow disease. A new case of SARS was just discovered in China. I can’t predict the next case of mad cow disease; however, there will be others. No one can say how many are out there incubating in animals and humans.
Many have asked through this past year why I don’t include photos, video clips, banners, and audio along with my daily musings. I’m not handy. I change toilet paper and light bulbs. I don’t charge admission and I don’t count the number of daily visitors. I welcome your stopping by and hope that I can add something to your daily decision making. My writings should serve as an alternative form of thought. They are based on facts. I have no hidden agenda. Whether you believe what I write is your decision. My words are not for sale. You will not find an end-of-the-year clearance here. This is a government-free zone. It doesn’t get better than that.
I would like to close by congratulating my many good friends and associates from and in India. This has been a year of many accomplishments and successes in a very short period of time. According to a survey published by the News India-Times, the top 92 Indian American-owned companies in the U.S. together generated $2.2 billion in revenue in 2002and employed 18,337 full-time workers. I feel quite confident that those same companies will show improved results for 2003, and that is despite many representing the IT and services sector in addition to manufacturing, distribution, R&D, and other professional services.
Friday, December 26, 2003
12/26/03 A Real Downer
On a previous occasion I mentioned that my father, my grandfather, and my great grandfather were butchers. As a youngster, I worked in the wholesale meat market and was familiar with the workings of animal slaughter operations. I also mentioned the type of folks who “run” this industry. Yesterday was Christmas, and I went easy on the USDA. Today is a different story.
In Europe, testing is done on one-quarter of its beef cattle each year. Japan tests all meat for human consumption. In the U.S. we test only about one in every 2,000 cows. Stephen Sunblof of the FDA’s Center for Veterinary Medicine stated that his agency had known it had compliance problems a few years ago. He remarked “we recognized that 75% compliance was not sufficient.” There are still feed processors that use animal parts as a protein source for feed to animals. In addition, under the current FDA ban, cattle parts can still be used in pet food or in the food for pigs or horses. Feed processors frequently use the same equipment for different foods. As such, James Cullor, a director of Veterinary Medicine Teaching and Research Center at UC Davis, stated such machinery interaction raises the possibility that cow tissue from a batch intended for chickens could end up in cattle food.
On the same day that the diseased Holstein was killed, A Senate-House conference committee killed language in the agriculture appropriations bill that would have prevented the use of downer cows for food. Last week, the 2nd U.S. Circuit Court of Appeals revived a lawsuit that contends that the government’s policy on downer animals does not protect enough against mad cow disease. The suit was filed by Farm Sanctuary, an entity that cares for about 1,000 disabled animals. The court stated Farm Sanctuary “successfully alleged a credible threat of harm from downed cattle.” The Agriculture Department rejected Farm Sanctuary’s initial request in 1998 to ban downer cows from market.
This is not a single Holstein cow problem. As David Ropeik, director of Risk Communication at the Harvard Center for Risk Analysis noted, “potentially other animals at the same age were fed the same feed. There might be other animals carrying the infected material that aren’t symptomatic yet.” The U.S. does not have a national identification system that tracks each head of cattle through its lifetime. Canada has such a system, and it enabled that country to track the history of their diseased cow earlier this year. Even so, it took researchers three weeks to trace the animal’s origin. Former assistant Agriculture Secretary Carol Tucker Foreman, who is now director of food policy for the Consumer Federation of America, stated ‘I know that there is no guarantee that there aren’t other sick animals out there. I know there is no guarantee that the meat from other sick animals hasn’t gotten into the food supply.” We may have a growing computer-literate U.S. population, but it is thought, as David Warren, the chief executive of eMerge Interactive mentioned, that “most of the dairy producers today will have handwritten records on Big Chief tablets or feed bills or vet bills. It’s a very difficult process” to find clues to the animal’s history. USDA chief veterinarian Ron DeHaven stated investigators will “focus on the feeding process of the birth herd. Once we have the birth herd, we’ll want to know what animals have come into that herd and what animals have left that herd and all the feeding practices for that herd.” Agriculture Department officials stated it was likely the cow had been infected while she still lived with her “birth herd.”
John Stauber is the author of “Mad Cow U.S.A.” He stated “here’s the problem, the feed has been grossly violated by feed mills.” X-Cel Feeds Inc. of Tacoma, Washington, for example, admitted in a consent decree in July that it violated FDA regulations designed to prevent the possible spread of mad cow disease. Stauber also mentioned he believes the ban is ineffective because it exempts blood from cattle, which he said could transmit mad-cow type diseases, and he recently warned Veneman, the Agriculture Secretary, that it was “just a matter of time” before the disease was found in the United States. With no sense of urgency, the disease has struck. I doubt very much whether this will be an isolated event. The incubation period is moving to other unknown neighborhoods. Wayne Pacelle, senior vice president of the Humane Society of the United States, remarked “if we allow downed animals to be slaughtered, we are playing Russian roulette with the American food supply.” On the other hand, Professor Cullor inquires “if you ban all downer cows from the food chain, now what are you going to do with them? Are you going to put them in pet food? Bury them in a toxic waste dump? You can’t burn it because there are air-quality rules… that a ban is completely fair to talk about, but offer some solutions, too.”
Japan has stated that it will look to Australia and New Zealand as alternative beef suppliers to the United States. It will take time for our beef industry to regain the world’s trust. Significant testing and tracking procedures must be implemented. Cooperation will be required. Beef consumption will decline in the U.S. Many businesses will be hurt. Some will become downers. There isn’t a season for the mad cow disease. This isn’t the flu. There is a plus side. Prevention does not require a vaccine. There is a hidden downside. Dispensing irresponsible talk on the subject of mad cow can create an outbreak of hoof and mouth disease.
On a previous occasion I mentioned that my father, my grandfather, and my great grandfather were butchers. As a youngster, I worked in the wholesale meat market and was familiar with the workings of animal slaughter operations. I also mentioned the type of folks who “run” this industry. Yesterday was Christmas, and I went easy on the USDA. Today is a different story.
In Europe, testing is done on one-quarter of its beef cattle each year. Japan tests all meat for human consumption. In the U.S. we test only about one in every 2,000 cows. Stephen Sunblof of the FDA’s Center for Veterinary Medicine stated that his agency had known it had compliance problems a few years ago. He remarked “we recognized that 75% compliance was not sufficient.” There are still feed processors that use animal parts as a protein source for feed to animals. In addition, under the current FDA ban, cattle parts can still be used in pet food or in the food for pigs or horses. Feed processors frequently use the same equipment for different foods. As such, James Cullor, a director of Veterinary Medicine Teaching and Research Center at UC Davis, stated such machinery interaction raises the possibility that cow tissue from a batch intended for chickens could end up in cattle food.
On the same day that the diseased Holstein was killed, A Senate-House conference committee killed language in the agriculture appropriations bill that would have prevented the use of downer cows for food. Last week, the 2nd U.S. Circuit Court of Appeals revived a lawsuit that contends that the government’s policy on downer animals does not protect enough against mad cow disease. The suit was filed by Farm Sanctuary, an entity that cares for about 1,000 disabled animals. The court stated Farm Sanctuary “successfully alleged a credible threat of harm from downed cattle.” The Agriculture Department rejected Farm Sanctuary’s initial request in 1998 to ban downer cows from market.
This is not a single Holstein cow problem. As David Ropeik, director of Risk Communication at the Harvard Center for Risk Analysis noted, “potentially other animals at the same age were fed the same feed. There might be other animals carrying the infected material that aren’t symptomatic yet.” The U.S. does not have a national identification system that tracks each head of cattle through its lifetime. Canada has such a system, and it enabled that country to track the history of their diseased cow earlier this year. Even so, it took researchers three weeks to trace the animal’s origin. Former assistant Agriculture Secretary Carol Tucker Foreman, who is now director of food policy for the Consumer Federation of America, stated ‘I know that there is no guarantee that there aren’t other sick animals out there. I know there is no guarantee that the meat from other sick animals hasn’t gotten into the food supply.” We may have a growing computer-literate U.S. population, but it is thought, as David Warren, the chief executive of eMerge Interactive mentioned, that “most of the dairy producers today will have handwritten records on Big Chief tablets or feed bills or vet bills. It’s a very difficult process” to find clues to the animal’s history. USDA chief veterinarian Ron DeHaven stated investigators will “focus on the feeding process of the birth herd. Once we have the birth herd, we’ll want to know what animals have come into that herd and what animals have left that herd and all the feeding practices for that herd.” Agriculture Department officials stated it was likely the cow had been infected while she still lived with her “birth herd.”
John Stauber is the author of “Mad Cow U.S.A.” He stated “here’s the problem, the feed has been grossly violated by feed mills.” X-Cel Feeds Inc. of Tacoma, Washington, for example, admitted in a consent decree in July that it violated FDA regulations designed to prevent the possible spread of mad cow disease. Stauber also mentioned he believes the ban is ineffective because it exempts blood from cattle, which he said could transmit mad-cow type diseases, and he recently warned Veneman, the Agriculture Secretary, that it was “just a matter of time” before the disease was found in the United States. With no sense of urgency, the disease has struck. I doubt very much whether this will be an isolated event. The incubation period is moving to other unknown neighborhoods. Wayne Pacelle, senior vice president of the Humane Society of the United States, remarked “if we allow downed animals to be slaughtered, we are playing Russian roulette with the American food supply.” On the other hand, Professor Cullor inquires “if you ban all downer cows from the food chain, now what are you going to do with them? Are you going to put them in pet food? Bury them in a toxic waste dump? You can’t burn it because there are air-quality rules… that a ban is completely fair to talk about, but offer some solutions, too.”
Japan has stated that it will look to Australia and New Zealand as alternative beef suppliers to the United States. It will take time for our beef industry to regain the world’s trust. Significant testing and tracking procedures must be implemented. Cooperation will be required. Beef consumption will decline in the U.S. Many businesses will be hurt. Some will become downers. There isn’t a season for the mad cow disease. This isn’t the flu. There is a plus side. Prevention does not require a vaccine. There is a hidden downside. Dispensing irresponsible talk on the subject of mad cow can create an outbreak of hoof and mouth disease.
Thursday, December 25, 2003
12/25/03 A Happy And Safe Holiday Season
Our troops are stationed around the globe. They place our well-being before their own. Without them, our daily freedom would be on the endangered list. As it is, perils exist, and we must counter them with rekindled diligence and force when necessary. Hopefully, every day can be merry and bright, and not just on December 25th.
There are precautionary measures we can take that may ensure an improvement in our way of life. The mad cow headlines can lead to positive action. If we take the time to acquire greater knowledge, the pathway to the truth should be more accessible. A 1997 Agriculture Department study found that a majority of meat producers were making meat products with unacceptable materials in it. Laws prohibit animal intestines as well as eye and brain tissue from being placed in our food supply. Nevertheless, according to statistics by the Global Resource Action Center for the Environment’s Factory Farm Project, about 300 companies were found to be out of compliance with the nation’s laws for prevention of mad cow disease.
The USDA states they have tested about 20,000 cows for mad cow disease in 2002 and 2003. This represents only a small percentage of the millions of cows in U.S. herds. More importantly, despite requests to see the testing information under the Freedom of Information Act, the USDA has ignored the request made back on July 10, 2003, and, as recently as December 17, stated the agency is still searching for the documentation of its mad cow testing results from 2002 and 2003. Further troubling is the fact that, the recent Washington cow found to have contracted the disease, was a so-called downer cow, one unable to stand on its own. Some industry watchers claim the United States sees about 200,000 of these downers per year, or about ten times as many as are tested for the disease. Lester Friedlander, a former USDA veterinarian, stated “the government doesn’t have records to substantiate their testing so how do they know whether this is an isolated case.” Michael Schwochert, a retired USDA veterinarian in Fort Morgan, Colorado, stated “it scares the hell out of me what it’s going to do to the cattle industry. This could be catastrophic.” He related that he had been informed of an incident that took place six months ago at a slaughtering plant in Ft. Morgan. A cow displaying symptoms of mad cow disease was spotted by employees prior to the USDA officials inspecting the animal. He stated “it went back out on a special truck and they called the guys in the office and said they don’t know anything about this.”
A report from the General Accounting Office issued last year found some ranchers in the United States still violate the fed ban and do feed cow tissue to cattle. The GAO concluded in February 2002 that “while mad cow disease has not been found in the United States, federal actions do not sufficiently ensure that all mad cow-infected animals or products are kept out or that if mad cow were found, it would be detected promptly and not spread to other cattle through animal feed or enter the human food supply.” About 35 million head are slaughtered per year, and maybe a fraction of one percent are tested for mad cow disease. Agriculture Secretary Anne M. Veneman stated on CBS’ The Early Show “and I would, without hesitation, say that no one should be afraid to eat beef.” Ms. Veneman, you don’t have the facts to support that statement, and that statement, is, in my view, reckless and irresponsible. You won’t even turn over your test results. You don’t even know whether the meat from the infected animal was consumed. We know Vern’s Moses Lake Meats recalled about 10,410 pounds of raw beef that might have been exposed to tissues containing mad cow disease. We know that Interstate Meats of Oregon, a ground beef supplier, notified Albertson’s and several other Northwest retailers that certain product provided by Interstate meat is subject to a voluntary recall. Albertson’s is asking any customers in Washington, Oregon, and Northern Idaho stores to return pre-packaged ground beef purchased between December 16, and December 25, 2003.
We also know that the USDA suspended applications for certain livestock insurance policies. The agency stated the mad cow case “will have a significant effect on the price of cattle for the foreseeable future.” Chris Hurt, a professor of agricultural economics at Purdue University, stated “this will get tied up in diplomacy, politics, and trade policy. U.S. cattle producers can expect to lose as much as $3 billion should exports be halted for six months, and that period is the best we can hope for.” U.S. consumers and beef-importing nations have come to believe that our cows are carefully tested and the beef well inspected. As our learning curve improves, the outlook for the beef industry may take a turn for the worst.
The FDA indicated yesterday that a recall may need to take place in pet food. The main threat among pets is cats because “they are susceptible to BSE.” said Dr. Lester Crawford, FDA’s deputy commissioner. Some pet food could have contained material from the infected cow. He remarked that there is no way of knowing how much pet food would have to be recalled. He stated that, even if a small batch of infected pet food was mixed with a ton of other food, “the ton would have to be destroyed.” Michael Hansen of Consumers Union noted “they will have to recall pet food and other feed products. In addition, all those rendering plants (the infected cow material passed through) will be contaminated.”
I have taken this opportunity to discuss the mad cow situation not to frighten you, but rather to expose the real playing field. It would be wise not to depend on the assurances of Ms. Veneman. Hopefully, we can take a page from the way the CDC handled the outbreak of SARS. Their actions were transparent and well-documented. The information provided was accurate and responsible. Whether Ms. Veneman serves beef to her family at the Christmas table is not the point. There are 15 countries around the globe that have placed a ban and/or partial ban on the exports of our cattle and cow products. Other nations will probably be added to the list. Our testing procedures will probably be found lacking. How we react shall go a long way towards determining the future of the cattle industry in the United States. Adjusted for inflation, Americans spend less on beef today than they spent in 1980.
Once again. I would like to wish all my friends and my readers a very MERRY CHRISTMAS. Please enjoy this time of togetherness and joy, and remember others love you.
Our troops are stationed around the globe. They place our well-being before their own. Without them, our daily freedom would be on the endangered list. As it is, perils exist, and we must counter them with rekindled diligence and force when necessary. Hopefully, every day can be merry and bright, and not just on December 25th.
There are precautionary measures we can take that may ensure an improvement in our way of life. The mad cow headlines can lead to positive action. If we take the time to acquire greater knowledge, the pathway to the truth should be more accessible. A 1997 Agriculture Department study found that a majority of meat producers were making meat products with unacceptable materials in it. Laws prohibit animal intestines as well as eye and brain tissue from being placed in our food supply. Nevertheless, according to statistics by the Global Resource Action Center for the Environment’s Factory Farm Project, about 300 companies were found to be out of compliance with the nation’s laws for prevention of mad cow disease.
The USDA states they have tested about 20,000 cows for mad cow disease in 2002 and 2003. This represents only a small percentage of the millions of cows in U.S. herds. More importantly, despite requests to see the testing information under the Freedom of Information Act, the USDA has ignored the request made back on July 10, 2003, and, as recently as December 17, stated the agency is still searching for the documentation of its mad cow testing results from 2002 and 2003. Further troubling is the fact that, the recent Washington cow found to have contracted the disease, was a so-called downer cow, one unable to stand on its own. Some industry watchers claim the United States sees about 200,000 of these downers per year, or about ten times as many as are tested for the disease. Lester Friedlander, a former USDA veterinarian, stated “the government doesn’t have records to substantiate their testing so how do they know whether this is an isolated case.” Michael Schwochert, a retired USDA veterinarian in Fort Morgan, Colorado, stated “it scares the hell out of me what it’s going to do to the cattle industry. This could be catastrophic.” He related that he had been informed of an incident that took place six months ago at a slaughtering plant in Ft. Morgan. A cow displaying symptoms of mad cow disease was spotted by employees prior to the USDA officials inspecting the animal. He stated “it went back out on a special truck and they called the guys in the office and said they don’t know anything about this.”
A report from the General Accounting Office issued last year found some ranchers in the United States still violate the fed ban and do feed cow tissue to cattle. The GAO concluded in February 2002 that “while mad cow disease has not been found in the United States, federal actions do not sufficiently ensure that all mad cow-infected animals or products are kept out or that if mad cow were found, it would be detected promptly and not spread to other cattle through animal feed or enter the human food supply.” About 35 million head are slaughtered per year, and maybe a fraction of one percent are tested for mad cow disease. Agriculture Secretary Anne M. Veneman stated on CBS’ The Early Show “and I would, without hesitation, say that no one should be afraid to eat beef.” Ms. Veneman, you don’t have the facts to support that statement, and that statement, is, in my view, reckless and irresponsible. You won’t even turn over your test results. You don’t even know whether the meat from the infected animal was consumed. We know Vern’s Moses Lake Meats recalled about 10,410 pounds of raw beef that might have been exposed to tissues containing mad cow disease. We know that Interstate Meats of Oregon, a ground beef supplier, notified Albertson’s and several other Northwest retailers that certain product provided by Interstate meat is subject to a voluntary recall. Albertson’s is asking any customers in Washington, Oregon, and Northern Idaho stores to return pre-packaged ground beef purchased between December 16, and December 25, 2003.
We also know that the USDA suspended applications for certain livestock insurance policies. The agency stated the mad cow case “will have a significant effect on the price of cattle for the foreseeable future.” Chris Hurt, a professor of agricultural economics at Purdue University, stated “this will get tied up in diplomacy, politics, and trade policy. U.S. cattle producers can expect to lose as much as $3 billion should exports be halted for six months, and that period is the best we can hope for.” U.S. consumers and beef-importing nations have come to believe that our cows are carefully tested and the beef well inspected. As our learning curve improves, the outlook for the beef industry may take a turn for the worst.
The FDA indicated yesterday that a recall may need to take place in pet food. The main threat among pets is cats because “they are susceptible to BSE.” said Dr. Lester Crawford, FDA’s deputy commissioner. Some pet food could have contained material from the infected cow. He remarked that there is no way of knowing how much pet food would have to be recalled. He stated that, even if a small batch of infected pet food was mixed with a ton of other food, “the ton would have to be destroyed.” Michael Hansen of Consumers Union noted “they will have to recall pet food and other feed products. In addition, all those rendering plants (the infected cow material passed through) will be contaminated.”
I have taken this opportunity to discuss the mad cow situation not to frighten you, but rather to expose the real playing field. It would be wise not to depend on the assurances of Ms. Veneman. Hopefully, we can take a page from the way the CDC handled the outbreak of SARS. Their actions were transparent and well-documented. The information provided was accurate and responsible. Whether Ms. Veneman serves beef to her family at the Christmas table is not the point. There are 15 countries around the globe that have placed a ban and/or partial ban on the exports of our cattle and cow products. Other nations will probably be added to the list. Our testing procedures will probably be found lacking. How we react shall go a long way towards determining the future of the cattle industry in the United States. Adjusted for inflation, Americans spend less on beef today than they spent in 1980.
Once again. I would like to wish all my friends and my readers a very MERRY CHRISTMAS. Please enjoy this time of togetherness and joy, and remember others love you.
Wednesday, December 24, 2003
12/24/03 Mad About You
Forbes Magazine readers voted off-shoring the most significant business trend of 2003. As such, their Face of the Year was Kiran Karnik, a gentleman I have mentioned several times in the last few months. Karnik is the president of Nasscom, the National Association of Software and Service Companies. Karnik told Forbes that his goal was to more than double India’s share of the global software production to six percent. The magazine has noted that “tech currently accounts for some three percent of India’s GDP, or $16.5 billion, up from just $1.7 billion nine years ago. The big driver? Exports of software and services to the U.S.” Karnik remarked that “outsourcing was triggered by the intention to cut costs, but now it’s not just driven by cost factors. We are helping U.S. companies tap into talent that is scarce in the United States.”
Bovine Spongiform Encephalopathy (BSE) or Mad Cow disease is an animal disease that is not contagious as a result of ordinary cattle-to-cattle contact. BSE is caused by proteins called prions found in neurological tissues, such as, brains, spinal cords, and eye tissue and not in beef cuts, such as, steaks, roasts, and ground beef. With respect to the first detection of Mad Cow near Yakima in Washington, it is believed the diseased tissue did not enter the food supply. However, Japan and South Korea stated they will ban imports of U.S. beef. Japan is the biggest customer for U.S. beef, buying $1.4 billion worth so far this year, according to the National Cattlemen’s Beef Association. South Korea imported $372 million of U.S. beef in the first 10 months of 2003. In May the U.S. banned imports of Canadian cattle after a case of Mad Cow was discovered in Alberta. The ban is still in effect. More than 20 other countries joined the ban. The beef industry contributes $20 billion to the Canadian economy while our industry totals about $175 billion.
Talking about Japan, their cabinet proposed a $657 budget for fiscal year 2004. They have record debt, a projected primary deficit of $152 billion, and swelling social security and debt-servicing costs. That sounds quite familiar. France doesn’t paint a very rosy picture either. They have experienced only 0.2% growth this year, and in November, French consumers cut spending on manufactured goods by 2.8%, the largest decline in seven years. Their consumer confidence is nearing a six-year low, and unemployment is approaching 10%. A partner at Deloitte Touche Tomatsu stated “more than a quarter of the population is personally affected by the recession and there’s been a more significant drop in their planned Christmas purchases.” That sounds familiar as well. In November U.S. consumer spending rose less than expected, and the personal consumption expenditures price index declined for the first time in seven months. Some economists believe we have reached price stability. I disagree. I believe we are munching on deflation. I’ll give you an example.
Let’s take a trip to Detroit. I promise to get you back in time for Christmas. Farmer Jack is a supermarket chain founded 75 years ago, and purchased by the Great Atlantic and Pacific Tea Co. Inc. (A&P) in 1989. The grocer has about 10,000 workers in metro Detroit. They have 106 stores in Michigan and Ohio. The company competes mostly with Kroger and Meijer. Management has been cost-cutting for some months, but it has not been enough to possibly prevent the closing of many stores. To avoid massive store closings and a total pullout from Michigan, Farmer Jack employees agreed to take an immediate 5% wage cut. In addition, workers with more than 18 years of service would receive four paid weeks of vacation, down from five weeks, and personal days would go from eight a year to five. Employees at the top of Farmer Jack’s wage scale earn $13.22 an hour now. Workers would see no changes in health care or pension benefits. The wage concessions cannot be blamed on WalMart because its closet superstore is in Howell. In addition, blame cannot be placed on outsourcing to India. In June, Farmer Jack closed all stores for 37 hours to relaunch itself with lower food prices. The wage concessions help to fund those lower food prices. The executive vice president of the UFCW Local 951 stated “our attitude is it is better to have jobs. We’re just hoping they can turn it around.”
Bush is developing a plan that would allow immigrants to cross the border legally if jobs are waiting for them. Supposedly, the administration also wants to provide a way for some undocumented workers in the United States to move toward legal status. According to government figures, an estimated 8 million undocumented people live in the United States. I guess if they aren’t documented, then they aren’t part of the unemployment rolls. I wonder if they get food stamps. I just read where 339,000 Tennessee families are receiving food stamps, up 17% from a year ago. A spokeswoman for the Tennessee Department of Human Resources stated “it is the economy. Jobs are not being created.” There are 781,000 individuals in the 339,000 households receiving benefits. I am having a problem knowing what to believe. The federal government tells us the economy is roaring forward and jobs are being created. Yet, folks on Main Street indicate something very different. I can relate a lot better to the folks in need. They bleed real blood and don’t spew BS.
I think we have time to make one more detour to Owings Mills, Maryland. We are not visiting the set of Wall Street Week. Actually, this is the corporate home of the Sweetheart Cup Co., a 90-year-old paper cup and plate enterprise. They employ 1,600 workers at its headquarters, and overall, have 7,442 employees across the nation at its 22 plants in North America. About 83% of the employees are hourly workers. Sweetheart recorded sales of $1.3 billion this year and earned $15 million. The company supplies McDonald’s, Burger King, Target, WalMart, and Ben & Jerry’s. At one time the company was known as Maryland Cup. Fort Howard acquired the company in 1983, and the name was changed to Sweetheart Cup in 1989 when Fort Howard sold it. The company will now be acquired by Chicago-based Solo Cup. The closing will occur in the early part of 2004. Solo has 12 U.S. plants. After a complete review, I would anticipate some plants would be closed and layoffs announced. In the meantime, Sweetheart’s workforce faces an uncertain future during this holiday period. Many must feel mad about the merger.
Forbes Magazine readers voted off-shoring the most significant business trend of 2003. As such, their Face of the Year was Kiran Karnik, a gentleman I have mentioned several times in the last few months. Karnik is the president of Nasscom, the National Association of Software and Service Companies. Karnik told Forbes that his goal was to more than double India’s share of the global software production to six percent. The magazine has noted that “tech currently accounts for some three percent of India’s GDP, or $16.5 billion, up from just $1.7 billion nine years ago. The big driver? Exports of software and services to the U.S.” Karnik remarked that “outsourcing was triggered by the intention to cut costs, but now it’s not just driven by cost factors. We are helping U.S. companies tap into talent that is scarce in the United States.”
Bovine Spongiform Encephalopathy (BSE) or Mad Cow disease is an animal disease that is not contagious as a result of ordinary cattle-to-cattle contact. BSE is caused by proteins called prions found in neurological tissues, such as, brains, spinal cords, and eye tissue and not in beef cuts, such as, steaks, roasts, and ground beef. With respect to the first detection of Mad Cow near Yakima in Washington, it is believed the diseased tissue did not enter the food supply. However, Japan and South Korea stated they will ban imports of U.S. beef. Japan is the biggest customer for U.S. beef, buying $1.4 billion worth so far this year, according to the National Cattlemen’s Beef Association. South Korea imported $372 million of U.S. beef in the first 10 months of 2003. In May the U.S. banned imports of Canadian cattle after a case of Mad Cow was discovered in Alberta. The ban is still in effect. More than 20 other countries joined the ban. The beef industry contributes $20 billion to the Canadian economy while our industry totals about $175 billion.
Talking about Japan, their cabinet proposed a $657 budget for fiscal year 2004. They have record debt, a projected primary deficit of $152 billion, and swelling social security and debt-servicing costs. That sounds quite familiar. France doesn’t paint a very rosy picture either. They have experienced only 0.2% growth this year, and in November, French consumers cut spending on manufactured goods by 2.8%, the largest decline in seven years. Their consumer confidence is nearing a six-year low, and unemployment is approaching 10%. A partner at Deloitte Touche Tomatsu stated “more than a quarter of the population is personally affected by the recession and there’s been a more significant drop in their planned Christmas purchases.” That sounds familiar as well. In November U.S. consumer spending rose less than expected, and the personal consumption expenditures price index declined for the first time in seven months. Some economists believe we have reached price stability. I disagree. I believe we are munching on deflation. I’ll give you an example.
Let’s take a trip to Detroit. I promise to get you back in time for Christmas. Farmer Jack is a supermarket chain founded 75 years ago, and purchased by the Great Atlantic and Pacific Tea Co. Inc. (A&P) in 1989. The grocer has about 10,000 workers in metro Detroit. They have 106 stores in Michigan and Ohio. The company competes mostly with Kroger and Meijer. Management has been cost-cutting for some months, but it has not been enough to possibly prevent the closing of many stores. To avoid massive store closings and a total pullout from Michigan, Farmer Jack employees agreed to take an immediate 5% wage cut. In addition, workers with more than 18 years of service would receive four paid weeks of vacation, down from five weeks, and personal days would go from eight a year to five. Employees at the top of Farmer Jack’s wage scale earn $13.22 an hour now. Workers would see no changes in health care or pension benefits. The wage concessions cannot be blamed on WalMart because its closet superstore is in Howell. In addition, blame cannot be placed on outsourcing to India. In June, Farmer Jack closed all stores for 37 hours to relaunch itself with lower food prices. The wage concessions help to fund those lower food prices. The executive vice president of the UFCW Local 951 stated “our attitude is it is better to have jobs. We’re just hoping they can turn it around.”
Bush is developing a plan that would allow immigrants to cross the border legally if jobs are waiting for them. Supposedly, the administration also wants to provide a way for some undocumented workers in the United States to move toward legal status. According to government figures, an estimated 8 million undocumented people live in the United States. I guess if they aren’t documented, then they aren’t part of the unemployment rolls. I wonder if they get food stamps. I just read where 339,000 Tennessee families are receiving food stamps, up 17% from a year ago. A spokeswoman for the Tennessee Department of Human Resources stated “it is the economy. Jobs are not being created.” There are 781,000 individuals in the 339,000 households receiving benefits. I am having a problem knowing what to believe. The federal government tells us the economy is roaring forward and jobs are being created. Yet, folks on Main Street indicate something very different. I can relate a lot better to the folks in need. They bleed real blood and don’t spew BS.
I think we have time to make one more detour to Owings Mills, Maryland. We are not visiting the set of Wall Street Week. Actually, this is the corporate home of the Sweetheart Cup Co., a 90-year-old paper cup and plate enterprise. They employ 1,600 workers at its headquarters, and overall, have 7,442 employees across the nation at its 22 plants in North America. About 83% of the employees are hourly workers. Sweetheart recorded sales of $1.3 billion this year and earned $15 million. The company supplies McDonald’s, Burger King, Target, WalMart, and Ben & Jerry’s. At one time the company was known as Maryland Cup. Fort Howard acquired the company in 1983, and the name was changed to Sweetheart Cup in 1989 when Fort Howard sold it. The company will now be acquired by Chicago-based Solo Cup. The closing will occur in the early part of 2004. Solo has 12 U.S. plants. After a complete review, I would anticipate some plants would be closed and layoffs announced. In the meantime, Sweetheart’s workforce faces an uncertain future during this holiday period. Many must feel mad about the merger.
Tuesday, December 23, 2003
12/23/03 Code Red
It’s like old times. It’s been like this for over 100 years. Some people rent fancy New York City office space in skyscrapers. When you want to do real business, you don’t go to Broad and Wall at the Stock Exchange. That’s nickel and dime stuff. The floor brokers and day traders think that’s the real action. What do they know? Have they ever been to Harlem? Do they know what real red sauce tastes like? Have they ever eaten a real homemade meatball, one as large as a full moon but as light as the air outside? You just know they haven’t. When back home in New York City, I hang out in Harlem, the Bronx, Brooklyn, and on occasion, Little Italy. I know where to find the red sauce. Last night the ten tables at Rao’s in East Harlem were full—like that’s a revelation. Frank Pellegrino and Ronny Straci own the place. Frank’s great-uncle, Charlie Rao, started the Rao’s. I guess that’s where he thought up the name. Ronny was having dinner with Albert Petraolia, chief clerk for the Nassau County Courts. Louis Barone of East Harlem was at the bar. Louis comes from the neighborhood. Also in the restaurant was Albert Circelli of Yonkers. This was not Albert’s night. Louis must have had a bad day. He pulled out a .38-caliber gun and knocked off Albert. Bo Dietl, a former NYPD cop and frequent guest on the Don Imus show, stated “this was not any mob hit. If you want to whack somebody you don’t do it at Rao’s. You take it outside.� This was the real-life Sopranos. The cops related that they don’t have a motive. How would they know? The rumor is Albert made a disparaging remark about the red sauce. You can’t do that, not if you want to live.
It’s good that the holiday shopping season is disappointing. Had it been a barn burner, a lot of people could have been killed by the 6.5 earthquake while shopping in downtown Paso Robles? Is there an uptown? As it was, two individuals perished in the quake, which was felt all the way from the Central Coast of California to Rao’s in East Harlem.
U.S. commanders in Iraq have said they hope to reduce the American military presence from 130,000 troops to 100,000 troops by July, when political authority will be handed over to an interim Iraqi government. Unfortunately, things in Iraq are not what the troops and Americans been told. A 16-page White House report states “it is not possible to know at this time either the duration of the military operations or the scope and duration of the deployment of United States armed forces necessary for the full accomplishment of our goals.� Bush has been critical that enough has not been said about the positive accomplishments in Iraq. They are greatly outnumbered by the 202 U.S. soldiers killed by hostile fire since the United States declared major combat over in Iraq on May 1.
ComScore Networks reported that online sales were up 31% to about $1.9 billion for the week ended Friday. That’s a lot more encouraging than the news from WalMart, Target, and Shopko. A spokesperson for the Gallery at South Kalb remarked “we see the traffic, but we don’t see the bags.� WalMart is having trouble seeing the traffic. On the other hand, WalMart sees WalMart.com sales growing at twice the industry rate. Yesterday, Shopko Stores of Green Bay revised its earnings outlook for the fourth quarter and the fiscal year ending January 31,2004. Their present guidance is for the quarter to be in the range of 95 cents to $1.10 per share, down from $1.15 to $1.25 per share. Their president and CEO stated “our December sales expectations have not been met as holiday shopping traffic is lower than anticipated.� That is not the last time you will read these words in the coming two weeks. Shopko will have plenty of company. The combination of lower than expected sales and gross margin compression will create plenty of glum shareholders in the retail sector. I guess the Bush administration will blame the disappointing results on snowstorms, the quake, the orange alert, and the less than expected discounts offered by department stores.
Last night Cheney spoke at a $500-a-plate fund-raising dinner at the Hyatt Hotel in Bellevue, Washington. Maybe it was a combination of the lamb kabobs and stuffed prawns, but I am pretty certain Cheney stated “those who provide safe harbor and sanctuary to terrorists who launch attacks against the United States will be deemed just as guilty as the terrorists themselves. That’s why we went into Afghanistan. That’s why we went into Iraq.� Every day is a learning experience for me. All this time I thought we went into Iraq because their WMD posed an imminent danger to the United States. Now I can get a good night’s sleep.
Yesterday was a big day in China. In the 1949 communist revolution, the state seized private property. For the first time since 1949, China will guarantee property rights for its citizens. It means that businesses can use private property as collateral for loans. The private sector has become a major force in China’s economic growth. However, that same private sector is often the home of over-capacity. There are 123 auto manufacturers in China. The Xinhua News Agency stated that vehicle inventories almost doubled to 240,000 units in the first 10 months this year from the year-earlier period. The next thing you know incentives will be required to sell these vehicles. Maybe GM, F, and Chrysler can provide their expertise in this area.
A Homestar Mortgage survey stated that total mortgage origination will amount to $3.5 trillion in 2003, with two-thirds generated by homeowners refinancing existing mortgages. The forecast for 2004 is a 50% decline in mortgage originations. Another 21% who did not purchase or refinance a home this year intended to do so this year. The survey indicated U.S. homeowners have an average $70,000 in equity. Some industry watchers believe there will be more activity in home-equity loans.
It’s like old times. It’s been like this for over 100 years. Some people rent fancy New York City office space in skyscrapers. When you want to do real business, you don’t go to Broad and Wall at the Stock Exchange. That’s nickel and dime stuff. The floor brokers and day traders think that’s the real action. What do they know? Have they ever been to Harlem? Do they know what real red sauce tastes like? Have they ever eaten a real homemade meatball, one as large as a full moon but as light as the air outside? You just know they haven’t. When back home in New York City, I hang out in Harlem, the Bronx, Brooklyn, and on occasion, Little Italy. I know where to find the red sauce. Last night the ten tables at Rao’s in East Harlem were full—like that’s a revelation. Frank Pellegrino and Ronny Straci own the place. Frank’s great-uncle, Charlie Rao, started the Rao’s. I guess that’s where he thought up the name. Ronny was having dinner with Albert Petraolia, chief clerk for the Nassau County Courts. Louis Barone of East Harlem was at the bar. Louis comes from the neighborhood. Also in the restaurant was Albert Circelli of Yonkers. This was not Albert’s night. Louis must have had a bad day. He pulled out a .38-caliber gun and knocked off Albert. Bo Dietl, a former NYPD cop and frequent guest on the Don Imus show, stated “this was not any mob hit. If you want to whack somebody you don’t do it at Rao’s. You take it outside.� This was the real-life Sopranos. The cops related that they don’t have a motive. How would they know? The rumor is Albert made a disparaging remark about the red sauce. You can’t do that, not if you want to live.
It’s good that the holiday shopping season is disappointing. Had it been a barn burner, a lot of people could have been killed by the 6.5 earthquake while shopping in downtown Paso Robles? Is there an uptown? As it was, two individuals perished in the quake, which was felt all the way from the Central Coast of California to Rao’s in East Harlem.
U.S. commanders in Iraq have said they hope to reduce the American military presence from 130,000 troops to 100,000 troops by July, when political authority will be handed over to an interim Iraqi government. Unfortunately, things in Iraq are not what the troops and Americans been told. A 16-page White House report states “it is not possible to know at this time either the duration of the military operations or the scope and duration of the deployment of United States armed forces necessary for the full accomplishment of our goals.� Bush has been critical that enough has not been said about the positive accomplishments in Iraq. They are greatly outnumbered by the 202 U.S. soldiers killed by hostile fire since the United States declared major combat over in Iraq on May 1.
ComScore Networks reported that online sales were up 31% to about $1.9 billion for the week ended Friday. That’s a lot more encouraging than the news from WalMart, Target, and Shopko. A spokesperson for the Gallery at South Kalb remarked “we see the traffic, but we don’t see the bags.� WalMart is having trouble seeing the traffic. On the other hand, WalMart sees WalMart.com sales growing at twice the industry rate. Yesterday, Shopko Stores of Green Bay revised its earnings outlook for the fourth quarter and the fiscal year ending January 31,2004. Their present guidance is for the quarter to be in the range of 95 cents to $1.10 per share, down from $1.15 to $1.25 per share. Their president and CEO stated “our December sales expectations have not been met as holiday shopping traffic is lower than anticipated.� That is not the last time you will read these words in the coming two weeks. Shopko will have plenty of company. The combination of lower than expected sales and gross margin compression will create plenty of glum shareholders in the retail sector. I guess the Bush administration will blame the disappointing results on snowstorms, the quake, the orange alert, and the less than expected discounts offered by department stores.
Last night Cheney spoke at a $500-a-plate fund-raising dinner at the Hyatt Hotel in Bellevue, Washington. Maybe it was a combination of the lamb kabobs and stuffed prawns, but I am pretty certain Cheney stated “those who provide safe harbor and sanctuary to terrorists who launch attacks against the United States will be deemed just as guilty as the terrorists themselves. That’s why we went into Afghanistan. That’s why we went into Iraq.� Every day is a learning experience for me. All this time I thought we went into Iraq because their WMD posed an imminent danger to the United States. Now I can get a good night’s sleep.
Yesterday was a big day in China. In the 1949 communist revolution, the state seized private property. For the first time since 1949, China will guarantee property rights for its citizens. It means that businesses can use private property as collateral for loans. The private sector has become a major force in China’s economic growth. However, that same private sector is often the home of over-capacity. There are 123 auto manufacturers in China. The Xinhua News Agency stated that vehicle inventories almost doubled to 240,000 units in the first 10 months this year from the year-earlier period. The next thing you know incentives will be required to sell these vehicles. Maybe GM, F, and Chrysler can provide their expertise in this area.
A Homestar Mortgage survey stated that total mortgage origination will amount to $3.5 trillion in 2003, with two-thirds generated by homeowners refinancing existing mortgages. The forecast for 2004 is a 50% decline in mortgage originations. Another 21% who did not purchase or refinance a home this year intended to do so this year. The survey indicated U.S. homeowners have an average $70,000 in equity. Some industry watchers believe there will be more activity in home-equity loans.
Monday, December 22, 2003
12/22/03 One Nation Divisible And In Harm’s Way
This weekend upscale shoppers jammed Louis Vuitton, Neiman Marcus, Coach, and Saks Fifth Avenue, and many stood on long lines at checkout counters. Yesterday extended unemployment benefits ended for hundreds of thousands of Americans. Homeless people and the working poor stood on line Saturday at Glide Memorial Church in San Francisco. It was the annual food giveaway providing chicken or turkey and the fixings for a holiday dinner. For the first time in recent memory they ran out of food. Because of a drop in donations, Glide was only able to purchase 6,000 turkeys and chickens this holiday season, compared with 10,000 last year. At nearby St. Anthony’s Foundation there is a 53-year tradition of never turning anybody away with an empty stomach. They also ran out of chicken, turkey, and ham, and had to switch to hot dogs.
If you listen to the spinmeisters, everything in this nation appears bright. A tremendous blow struck many Americans this past August. In that month 400,000 of our citizens applied for first-time jobless benefits; however, the U.S. Department of Labor reported more than 130,000 workers lost jobs in August. These massive layoffs came after about 2.5 million jobs had already been lost over the past three years. Greg Davis, age 54, was one of those who became unemployed. He was a computer programmer at Towers Perrin. He lost his job with no warning. Greg arrived at work at 8:45AM and was laid off and home by 10AM. He received seven weeks severance pay, and received $413 a week in unemployment benefits. He has also worked odd jobs, and recently earned $350 laying bricks for a neighbor’s patio. He reported the $350, and his unemployment check dropped last week to $244. Greg wants to work, and stated “if I have to, I’ll wash cars to support my family (his wife and three children).� For Greg, “the biggest thing is fear, and the feeling that I’ve gone from a middle-class American down to the bottom of the pile…I’ve let my family down. My wife came from a family that never wanted…here we are, in harm’s way.�
Over 50% of store purchases are made with debit and credit cards. Cash registers depend on electricity. At 5:30 PM on Saturday a fire broke out at an unmanned substation in San Francisco. It caused equipment at one of the city’s key distribution centers to shut down, and 120,000 customers had no electricity, including the downtown shopping area packed with customers. Many businesses, such as, Old Navy and Ross, remained closed and without power on Sunday. The good news is they will be open for business today, and last year the Monday before Christmas was the second biggest shopping day of the year.
Over the past several days I have seen many articles stating that shoppers are procrastinating this holiday season, and waiting to make their purchases closer to Christmas to take advantage of added discounts. That may be true of some shoppers. However, there is another part to the story. Unfortunately, not enough writers pay attention to reality. If they were to read the releases from WalMart, they would have learned that many Americans are living paycheck to paycheck, and that more purchases are being made according to need. WalMart’s business picks up after payday. For many, payday comes twice a month. In December, the first paycheck arrived on the 5th, and the second would normally arrive on the 26th; however, that’s the day after Christmas. As such, for most folks the second paycheck will be received on December 24, in time to accomplish some last minute shopping. That would be good news for WalMart where December same-store sales through December 19 continue to track at the low end of the 3 to 5% growth range. Although some progress was made in the last week, traffic is still down but the size of individual purchases has increased.
I do believe that there is no proven connection between Saddam Hussein and the events of 9/11. At the same time, I do believe there is a connection between the capture of Saddam Hussein and yesterday Homeland Security announcing a code orange alert for our nation, the fifth time it has been activated. Administration officials previously had said they were reluctant to take such a step except in the most unusual circumstances. Tom Ridge stated “information indicates that extremists abroad are anticipating near-term attacks that they believe will rival, or exceed, the attacks in New York and at the Pentagon.� One might question whether the capture of Saddam Hussein did indeed make our country a safer place. I believe it increased the danger of our nation being in harm’s way.
On December 20 the World Trade Organization (WTO) rejected the U.S. government’s conclusion that Canadian softwood lumber imports imposed a “threat of injury� to the domestic lumber industry. A spokesperson for American Consumers for Affordable Homes stated “the U.S. cannot produce sufficient lumber to meet its needs for construction. Currently, approximately a third of our lumber must be imported. Protectionist duties harm millions of housing consumers and workers in lumber-dpendent industries who are forced to pay higher costs to protect a small group of lumber producers from open competition with their Canadian counterparts.�
This weekend upscale shoppers jammed Louis Vuitton, Neiman Marcus, Coach, and Saks Fifth Avenue, and many stood on long lines at checkout counters. Yesterday extended unemployment benefits ended for hundreds of thousands of Americans. Homeless people and the working poor stood on line Saturday at Glide Memorial Church in San Francisco. It was the annual food giveaway providing chicken or turkey and the fixings for a holiday dinner. For the first time in recent memory they ran out of food. Because of a drop in donations, Glide was only able to purchase 6,000 turkeys and chickens this holiday season, compared with 10,000 last year. At nearby St. Anthony’s Foundation there is a 53-year tradition of never turning anybody away with an empty stomach. They also ran out of chicken, turkey, and ham, and had to switch to hot dogs.
If you listen to the spinmeisters, everything in this nation appears bright. A tremendous blow struck many Americans this past August. In that month 400,000 of our citizens applied for first-time jobless benefits; however, the U.S. Department of Labor reported more than 130,000 workers lost jobs in August. These massive layoffs came after about 2.5 million jobs had already been lost over the past three years. Greg Davis, age 54, was one of those who became unemployed. He was a computer programmer at Towers Perrin. He lost his job with no warning. Greg arrived at work at 8:45AM and was laid off and home by 10AM. He received seven weeks severance pay, and received $413 a week in unemployment benefits. He has also worked odd jobs, and recently earned $350 laying bricks for a neighbor’s patio. He reported the $350, and his unemployment check dropped last week to $244. Greg wants to work, and stated “if I have to, I’ll wash cars to support my family (his wife and three children).� For Greg, “the biggest thing is fear, and the feeling that I’ve gone from a middle-class American down to the bottom of the pile…I’ve let my family down. My wife came from a family that never wanted…here we are, in harm’s way.�
Over 50% of store purchases are made with debit and credit cards. Cash registers depend on electricity. At 5:30 PM on Saturday a fire broke out at an unmanned substation in San Francisco. It caused equipment at one of the city’s key distribution centers to shut down, and 120,000 customers had no electricity, including the downtown shopping area packed with customers. Many businesses, such as, Old Navy and Ross, remained closed and without power on Sunday. The good news is they will be open for business today, and last year the Monday before Christmas was the second biggest shopping day of the year.
Over the past several days I have seen many articles stating that shoppers are procrastinating this holiday season, and waiting to make their purchases closer to Christmas to take advantage of added discounts. That may be true of some shoppers. However, there is another part to the story. Unfortunately, not enough writers pay attention to reality. If they were to read the releases from WalMart, they would have learned that many Americans are living paycheck to paycheck, and that more purchases are being made according to need. WalMart’s business picks up after payday. For many, payday comes twice a month. In December, the first paycheck arrived on the 5th, and the second would normally arrive on the 26th; however, that’s the day after Christmas. As such, for most folks the second paycheck will be received on December 24, in time to accomplish some last minute shopping. That would be good news for WalMart where December same-store sales through December 19 continue to track at the low end of the 3 to 5% growth range. Although some progress was made in the last week, traffic is still down but the size of individual purchases has increased.
I do believe that there is no proven connection between Saddam Hussein and the events of 9/11. At the same time, I do believe there is a connection between the capture of Saddam Hussein and yesterday Homeland Security announcing a code orange alert for our nation, the fifth time it has been activated. Administration officials previously had said they were reluctant to take such a step except in the most unusual circumstances. Tom Ridge stated “information indicates that extremists abroad are anticipating near-term attacks that they believe will rival, or exceed, the attacks in New York and at the Pentagon.� One might question whether the capture of Saddam Hussein did indeed make our country a safer place. I believe it increased the danger of our nation being in harm’s way.
On December 20 the World Trade Organization (WTO) rejected the U.S. government’s conclusion that Canadian softwood lumber imports imposed a “threat of injury� to the domestic lumber industry. A spokesperson for American Consumers for Affordable Homes stated “the U.S. cannot produce sufficient lumber to meet its needs for construction. Currently, approximately a third of our lumber must be imported. Protectionist duties harm millions of housing consumers and workers in lumber-dpendent industries who are forced to pay higher costs to protect a small group of lumber producers from open competition with their Canadian counterparts.�
12/22/03 One Nation Divisible And In Harm’s Way
This weekend upscale shoppers jammed Louis Vuitton, Neiman Marcus, Coach, and Saks Fifth Avenue, and many stood on long lines at checkout counters. Yesterday extended unemployment benefits ended for hundreds of thousands of Americans. Homeless people and the working poor stood on line Saturday at Glide Memorial Church in San Francisco. It was the annual food giveaway providing chicken or turkey and the fixings for a holiday dinner. For the first time in recent memory they ran out of food. Because of a drop in donations, Glide was only able to purchase 6,000 turkeys and chickens this holiday season, compared with 10,000 last year. At nearby St. Anthony’s Foundation there is a 53-year tradition of never turning anybody away with an empty stomach. They also ran out of chicken, turkey, and ham, and had to switch to hot dogs.
If you listen to the spinmeisters, everything in this nation appears bright. A tremendous blow struck many Americans this past August. In that month 400,000 of our citizens applied for first-time jobless benefits; however, the U.S. Department of Labor reported more than 130,000 workers lost jobs in August. These massive layoffs came after about 2.5 million jobs had already been lost over the past three years. Greg Davis, age 54, was one of those who became unemployed. He was a computer programmer at Towers Perrin. He lost his job with no warning. Greg arrived at work at 8:45AM and was laid off and home by 10AM. He received seven weeks severance pay, and received $413 a week in unemployment benefits. He has also worked odd jobs, and recently earned $350 laying bricks for a neighbor’s patio. He reported the $350, and his unemployment check dropped last week to $244. Greg wants to work, and stated “if I have to, I’ll wash cars to support my family (his wife and three children).� For Greg, “the biggest thing is fear, and the feeling that I’ve gone from a middle-class American down to the bottom of the pile…I’ve let my family down. My wife came from a family that never wanted…here we are, in harm’s way.�
Over 50% of store purchases are made with debit and credit cards. Cash registers depend on electricity. At 5:30 PM on Saturday a fire broke out at an unmanned substation in San Francisco. It caused equipment at one of the city’s key distribution centers to shut down, and 120,000 customers had no electricity, including the downtown shopping area packed with customers. Many businesses, such as, Old Navy and Ross, remained closed and without power on Sunday. The good news is they will be open for business today, and last year the Monday before Christmas was the second biggest shopping day of the year.
Over the past several days I have seen many articles stating that shoppers are procrastinating this holiday season, and waiting to make their purchases closer to Christmas to take advantage of added discounts. That may be true of some shoppers. However, there is another part to the story. Unfortunately, not enough writers pay attention to reality. If they were to read the releases from WalMart, they would have learned that many Americans are living paycheck to paycheck, and that more purchases are being made according to need. WalMart’s business picks up after payday. For many, payday comes twice a month. In December, the first paycheck arrived on the 5th, and the second would normally arrive on the 26th; however, that’s the day after Christmas. As such, for most folks the second paycheck will be received on December 24, in time to accomplish some last minute shopping. That would be good news for WalMart where December same-store sales through December 19 continue to track at the low end of the 3 to 5% growth range. Although some progress was made in the last week, traffic is still down but the size of individual purchases has increased.
I do believe that there is no proven connection between Saddam Hussein and the events of 9/11. At the same time, I do believe there is a connection between the capture of Saddam Hussein and yesterday Homeland Security announcing a code orange alert for our nation, the fifth time it has been activated. Administration officials previously had said they were reluctant to take such a step except in the most unusual circumstances. Tom Ridge stated “information indicates that extremists abroad are anticipating near-term attacks that they believe will rival, or exceed, the attacks in New York and at the Pentagon.� One might question whether the capture of Saddam Hussein did indeed make our country a safer place. I believe it increased the danger of our nation being in harm’s way.
On December 20 the World Trade Organization (WTO) rejected the U.S. government’s conclusion that Canadian softwood lumber imports imposed a “threat of injury� to the domestic lumber industry. A spokesperson for American Consumers for Affordable Homes stated “the U.S. cannot produce sufficient lumber to meet its needs for construction. Currently, approximately a third of our lumber must be imported. Protectionist duties harm millions of housing consumers and workers in lumber-dpendent industries who are forced to pay higher costs to protect a small group of lumber producers from open competition with their Canadian counterparts.�
This weekend upscale shoppers jammed Louis Vuitton, Neiman Marcus, Coach, and Saks Fifth Avenue, and many stood on long lines at checkout counters. Yesterday extended unemployment benefits ended for hundreds of thousands of Americans. Homeless people and the working poor stood on line Saturday at Glide Memorial Church in San Francisco. It was the annual food giveaway providing chicken or turkey and the fixings for a holiday dinner. For the first time in recent memory they ran out of food. Because of a drop in donations, Glide was only able to purchase 6,000 turkeys and chickens this holiday season, compared with 10,000 last year. At nearby St. Anthony’s Foundation there is a 53-year tradition of never turning anybody away with an empty stomach. They also ran out of chicken, turkey, and ham, and had to switch to hot dogs.
If you listen to the spinmeisters, everything in this nation appears bright. A tremendous blow struck many Americans this past August. In that month 400,000 of our citizens applied for first-time jobless benefits; however, the U.S. Department of Labor reported more than 130,000 workers lost jobs in August. These massive layoffs came after about 2.5 million jobs had already been lost over the past three years. Greg Davis, age 54, was one of those who became unemployed. He was a computer programmer at Towers Perrin. He lost his job with no warning. Greg arrived at work at 8:45AM and was laid off and home by 10AM. He received seven weeks severance pay, and received $413 a week in unemployment benefits. He has also worked odd jobs, and recently earned $350 laying bricks for a neighbor’s patio. He reported the $350, and his unemployment check dropped last week to $244. Greg wants to work, and stated “if I have to, I’ll wash cars to support my family (his wife and three children).� For Greg, “the biggest thing is fear, and the feeling that I’ve gone from a middle-class American down to the bottom of the pile…I’ve let my family down. My wife came from a family that never wanted…here we are, in harm’s way.�
Over 50% of store purchases are made with debit and credit cards. Cash registers depend on electricity. At 5:30 PM on Saturday a fire broke out at an unmanned substation in San Francisco. It caused equipment at one of the city’s key distribution centers to shut down, and 120,000 customers had no electricity, including the downtown shopping area packed with customers. Many businesses, such as, Old Navy and Ross, remained closed and without power on Sunday. The good news is they will be open for business today, and last year the Monday before Christmas was the second biggest shopping day of the year.
Over the past several days I have seen many articles stating that shoppers are procrastinating this holiday season, and waiting to make their purchases closer to Christmas to take advantage of added discounts. That may be true of some shoppers. However, there is another part to the story. Unfortunately, not enough writers pay attention to reality. If they were to read the releases from WalMart, they would have learned that many Americans are living paycheck to paycheck, and that more purchases are being made according to need. WalMart’s business picks up after payday. For many, payday comes twice a month. In December, the first paycheck arrived on the 5th, and the second would normally arrive on the 26th; however, that’s the day after Christmas. As such, for most folks the second paycheck will be received on December 24, in time to accomplish some last minute shopping. That would be good news for WalMart where December same-store sales through December 19 continue to track at the low end of the 3 to 5% growth range. Although some progress was made in the last week, traffic is still down but the size of individual purchases has increased.
I do believe that there is no proven connection between Saddam Hussein and the events of 9/11. At the same time, I do believe there is a connection between the capture of Saddam Hussein and yesterday Homeland Security announcing a code orange alert for our nation, the fifth time it has been activated. Administration officials previously had said they were reluctant to take such a step except in the most unusual circumstances. Tom Ridge stated “information indicates that extremists abroad are anticipating near-term attacks that they believe will rival, or exceed, the attacks in New York and at the Pentagon.� One might question whether the capture of Saddam Hussein did indeed make our country a safer place. I believe it increased the danger of our nation being in harm’s way.
On December 20 the World Trade Organization (WTO) rejected the U.S. government’s conclusion that Canadian softwood lumber imports imposed a “threat of injury� to the domestic lumber industry. A spokesperson for American Consumers for Affordable Homes stated “the U.S. cannot produce sufficient lumber to meet its needs for construction. Currently, approximately a third of our lumber must be imported. Protectionist duties harm millions of housing consumers and workers in lumber-dpendent industries who are forced to pay higher costs to protect a small group of lumber producers from open competition with their Canadian counterparts.�
Sunday, December 21, 2003
12/21/03 Transitional Problems
Cathy E. Minehan, Boston Federal Reserve Bank president and chief executive officer: “Productivity is the only way that economies grow over time. The fact that underlying productivity growth changed from something like 1% in the 1980s to something like 2 ¼ to 2 ½% since 1995 means that we are able to double our standards of living in about half the time. That improves everything for everybody. Real incomes go up, standards of living improve, and economies grow. Yes, increases in productivity during times of slower growth demand mean fewer jobs will be created. But being against productivity is like being against the car because it put some buggy whip manufacturers out of business. You can’t say it’s wrong for an economy to grow because there are transitional difficulties. We are experiencing a transitional problem from slower demand.� Ms. Minehan, if you asked the people on Main Street whether their standard of living has improved since January 2001, you might be greeted with answers unfit for a lady to hear. The simple truth is we have too many goods with too little demand, and exports to our country have all but eliminated the pricing power of businesses. This phenomenon has placed a strain on profit margins and created an on-going focus on cost-cutting, and ultimately, extinguished millions of jobs. The value of our dollar is falling, and so is our standard of living,
Over the past 30 years, U.S. factories have more than doubled their output. Our country continues to be the world’s number one manufacturer as well as the largest exporter. Economists remind us that, in 1910, one out of three U.S. workers was a farmer, and in 2000, that number had been reduced to fewer than one in 33. At the end of WW II, about four in ten workers were employed in manufacturing. Today that number is just over one in ten. The loss of manufacturing jobs is most often blamed on lower-wage earning foreign workers. According to a study of 20 large economies by Alliance Capital, from 1995 to 2002, their production increased more than 30% but employment declined 11%, for a loss of 22 million factory jobs. During this same period, China’s factory employment dropped 15%. As technology advances, and more computer-controlled machines work on their own, the need for workers declines as productivity increases. The machine may require repair and maintenance, but they are not represented by unions, do not require cost of living adjustments and yearly raises and possible bonuses, insurance companies don’t slap them with double-digit cost increases in health care policies, and many employee benefit plans are not required. But we have a transitional problem in the workplace. All this increased efficiency produces high numbers of unemployed, under-employed, and part-time workers. Lower operating costs have not created more jobs—not in the United States and not in China. There is nothing on the horizon to indicate this trend will slow down or reverse itself. It is more than a transitional difficulty, Ms. Minehan.
The transition from the Clinton years to the Bush period has meant the shift from government surpluses to big government deficits. Legislation created the CARFA Commission, the Commission on the Accountability and Review of Federal Agencies, focusing on entitlement programs and their impact on federal spending, deficits, and overall debt problems, discretionary spending policies, and pork programs. The legislation is known as SB 837 and HR 3213. It actually does exist. All taxpayers must remember interest payments on the federal debt are the third-largest budget item, after defense and entitlement programs. Maybe we can transition ourselves from the $2 million Appalachian fruit lab in West Virginia or the $725,000 “Please Touch� museum in Philadelphia.
The non-profit National Security Archive discovered information under the freedom of information act. In 1984 Rummy was then-President Reagan’s special Middle East envoy. In that year he went to Baghdad to personally assure Saddam Hussein that, his use of chemical weapons in the Iran-Iraq war, did not threaten U.S.-Iraqi ties. We transition to this year. Both Hans Blix and former weapons inspector, Dr. Raymond Zilinskas of the Monterrey Institute of International Studies, believe that most of Iraq’s WMD were destroyed in 1991 during the first Gulf War, and, at best, remnants of those weapons will be ultimately discovered. The Bush administration, not elected by the popular vote, chose the route of a preemptive strike because Bush claimed “hard fact that there were weapons of mass destruction, as opposed to the possibility that he could move to acquire those weapons.� In a recent interview with Dianne Sawyer, Bush was reminded of his aforementioned statement. Bush replied “What’s the difference?� The difference is the lost lives of 455 U.S. and 80 European soldiers and thousands of wounded during the conflict, including civilians. The truth is not for sale. It is not negotiable. The truth is not in transition. Congress did not vote to attack Iraq because Iraq and the world would be a better place without Saddam Hussein. Unfortunately for the Bush-Cheney team, the “misspeak� about WMD will re-emerge. It will take its place beside the millions of unemployed, under-employed, and part-time employed. November 2004 will serve as a transition period.
Today there are large fires burning on four pipelines between Tikrit and Beji, and another four fires blazing from pipelines between Beji and Mosul. Rebels fired rocket-propelled grenades that hit storage tanks in southern Baghdad on Saturday. Millions of gallons of gasoline burned, and these events only exacerbated the rationing that the Oil Ministry introduced on Thursday. Life has certainly changed. In the 1970s we experienced gasoline shortages and mile-long lines of cars at gas stations and waits for hours on end. Shortages in Iraq have created mile-long lines of cars at gas stations and waits up to 12 hours. Iraq has the world’s second-largest oil reserves. Tell that to the people waiting on line to get gas. I wonder how many Iraqis are happy that the U.S. occupies their country. Iraq is a country in transition.
Talks broke down Friday between the United Food and Commercial Workers International Union and Safeway, Albertson’s, and Kroger. The union proposed cutting employer funding of worker benefits by between $350 million and $500 million over a three-year contract. Supposedly, the companies are looking for about $1 billion in cuts. The companies did not make a counteroffer. Said the union representative, “they clearly aren’t interested in negotiations. They’re interested in breaking the union and the spirit of the employees.� The strike centers on healthcare costs, pension benefits, and pay for new hires. Unless a bolt of lightning takes place, negotiations will not resume until next year. By that time, the strike will have continued for almost 90 days. This must be music to the ears of WalMart and Costco. Extra grocery revenue certainly is helpful during a disappointing holiday shopping season.
Cathy E. Minehan, Boston Federal Reserve Bank president and chief executive officer: “Productivity is the only way that economies grow over time. The fact that underlying productivity growth changed from something like 1% in the 1980s to something like 2 ¼ to 2 ½% since 1995 means that we are able to double our standards of living in about half the time. That improves everything for everybody. Real incomes go up, standards of living improve, and economies grow. Yes, increases in productivity during times of slower growth demand mean fewer jobs will be created. But being against productivity is like being against the car because it put some buggy whip manufacturers out of business. You can’t say it’s wrong for an economy to grow because there are transitional difficulties. We are experiencing a transitional problem from slower demand.� Ms. Minehan, if you asked the people on Main Street whether their standard of living has improved since January 2001, you might be greeted with answers unfit for a lady to hear. The simple truth is we have too many goods with too little demand, and exports to our country have all but eliminated the pricing power of businesses. This phenomenon has placed a strain on profit margins and created an on-going focus on cost-cutting, and ultimately, extinguished millions of jobs. The value of our dollar is falling, and so is our standard of living,
Over the past 30 years, U.S. factories have more than doubled their output. Our country continues to be the world’s number one manufacturer as well as the largest exporter. Economists remind us that, in 1910, one out of three U.S. workers was a farmer, and in 2000, that number had been reduced to fewer than one in 33. At the end of WW II, about four in ten workers were employed in manufacturing. Today that number is just over one in ten. The loss of manufacturing jobs is most often blamed on lower-wage earning foreign workers. According to a study of 20 large economies by Alliance Capital, from 1995 to 2002, their production increased more than 30% but employment declined 11%, for a loss of 22 million factory jobs. During this same period, China’s factory employment dropped 15%. As technology advances, and more computer-controlled machines work on their own, the need for workers declines as productivity increases. The machine may require repair and maintenance, but they are not represented by unions, do not require cost of living adjustments and yearly raises and possible bonuses, insurance companies don’t slap them with double-digit cost increases in health care policies, and many employee benefit plans are not required. But we have a transitional problem in the workplace. All this increased efficiency produces high numbers of unemployed, under-employed, and part-time workers. Lower operating costs have not created more jobs—not in the United States and not in China. There is nothing on the horizon to indicate this trend will slow down or reverse itself. It is more than a transitional difficulty, Ms. Minehan.
The transition from the Clinton years to the Bush period has meant the shift from government surpluses to big government deficits. Legislation created the CARFA Commission, the Commission on the Accountability and Review of Federal Agencies, focusing on entitlement programs and their impact on federal spending, deficits, and overall debt problems, discretionary spending policies, and pork programs. The legislation is known as SB 837 and HR 3213. It actually does exist. All taxpayers must remember interest payments on the federal debt are the third-largest budget item, after defense and entitlement programs. Maybe we can transition ourselves from the $2 million Appalachian fruit lab in West Virginia or the $725,000 “Please Touch� museum in Philadelphia.
The non-profit National Security Archive discovered information under the freedom of information act. In 1984 Rummy was then-President Reagan’s special Middle East envoy. In that year he went to Baghdad to personally assure Saddam Hussein that, his use of chemical weapons in the Iran-Iraq war, did not threaten U.S.-Iraqi ties. We transition to this year. Both Hans Blix and former weapons inspector, Dr. Raymond Zilinskas of the Monterrey Institute of International Studies, believe that most of Iraq’s WMD were destroyed in 1991 during the first Gulf War, and, at best, remnants of those weapons will be ultimately discovered. The Bush administration, not elected by the popular vote, chose the route of a preemptive strike because Bush claimed “hard fact that there were weapons of mass destruction, as opposed to the possibility that he could move to acquire those weapons.� In a recent interview with Dianne Sawyer, Bush was reminded of his aforementioned statement. Bush replied “What’s the difference?� The difference is the lost lives of 455 U.S. and 80 European soldiers and thousands of wounded during the conflict, including civilians. The truth is not for sale. It is not negotiable. The truth is not in transition. Congress did not vote to attack Iraq because Iraq and the world would be a better place without Saddam Hussein. Unfortunately for the Bush-Cheney team, the “misspeak� about WMD will re-emerge. It will take its place beside the millions of unemployed, under-employed, and part-time employed. November 2004 will serve as a transition period.
Today there are large fires burning on four pipelines between Tikrit and Beji, and another four fires blazing from pipelines between Beji and Mosul. Rebels fired rocket-propelled grenades that hit storage tanks in southern Baghdad on Saturday. Millions of gallons of gasoline burned, and these events only exacerbated the rationing that the Oil Ministry introduced on Thursday. Life has certainly changed. In the 1970s we experienced gasoline shortages and mile-long lines of cars at gas stations and waits for hours on end. Shortages in Iraq have created mile-long lines of cars at gas stations and waits up to 12 hours. Iraq has the world’s second-largest oil reserves. Tell that to the people waiting on line to get gas. I wonder how many Iraqis are happy that the U.S. occupies their country. Iraq is a country in transition.
Talks broke down Friday between the United Food and Commercial Workers International Union and Safeway, Albertson’s, and Kroger. The union proposed cutting employer funding of worker benefits by between $350 million and $500 million over a three-year contract. Supposedly, the companies are looking for about $1 billion in cuts. The companies did not make a counteroffer. Said the union representative, “they clearly aren’t interested in negotiations. They’re interested in breaking the union and the spirit of the employees.� The strike centers on healthcare costs, pension benefits, and pay for new hires. Unless a bolt of lightning takes place, negotiations will not resume until next year. By that time, the strike will have continued for almost 90 days. This must be music to the ears of WalMart and Costco. Extra grocery revenue certainly is helpful during a disappointing holiday shopping season.
Saturday, December 20, 2003
12/20/03 The Truth Rules
For the past several years the Saturday before Christmas has been the biggest shopping day of the year by sales volume. If you were to listen to the National Retail Federation, you would believe that, as of December 10, only 10% of consumers had finished their holiday shopping. This is the same organization that predicted retail holiday spending growth this year up 5.7% from last year, which would be the biggest gain since 1999. WalMart and Target discounted that forecast to a less than rosy holiday shopping period. There are fewer unplanned promotions, less deep markdowns, and a lack of gotta-have products. There will be less impulse buying today, and shoppers will not see as many 75 percent price cuts as seen just before last Christmas. Many shoppers will stay home and make online purchases. Most bricks and mortar retailers will be sorry they read the forecast headlines from the National Retail Foundation. The latter will not be stuck with the inventory. It’s not their money. Maybe more retailers should have paid attention to Joyce Vordahl’s plight. Joyce is 47 and lives in Snohomish, Washington. She installed plane interiors at Boeing, and was laid off last year. She has attempted to update her skills, has cashed in her retirement plan, and is nearing the end of her benefits. Joyce stated “it shocks me. I have never had a problem getting a job in my life.� At 15, she worked in a restaurant, and if necessary, will try to find a job at a restaurant. She remarked “when I go to a fast-food restaurant, I don’t see teenagers there anymore. I see myself.� Unfortunately, there are too many like Joyce on Main Street. The sales volume for retailers this holiday season will reflect the other millions of stories in the naked city very similar to Joyce’s.
I just love to read the reports from SEMI, the San Jose-based trade association for the semiconductor industry. They have perfected the art of spinning. Yesterday they reported a November book-to-bill ratio of 1.04, and that means that $104 worth of new orders were received for every $100 of product billed for the month. SEMI stated these bookings were 7% above the October level. The headlines did not reflect that the November 2003 billings level was 8.5% below the November 2002 billings. That would not have made for very upbeat reading.
I just love to read the news releases from Boeing. This week there was the splash on the proposed 7E7. Getting an entire picture is a lot to ask of this company. Their 717 plane entered the market in 1999. You probably haven’t heard much about it. There is good reason for that. Boeing is currently building just a single 717 per month at its Long Beach production facility, and only 37 orders remain to be filled. It could become a collector’s item! Boeing might have also mentioned that more layoff notices went out this week. One of the strongest stocks in the Dow this week was Boeing.
Misery sure loves company. According to the Census Bureau, the state of California had a net population growth of 482,467 people last year. More than 35.5 million people live in California, greater than 162 nations around the globe. More people mean more stress on the state’s infrastructure and resources. It’s too bad so many of the old gold mines have been closed for decades. California could have used the tax revenues on gold production at $410 per ounce.
Several times I have written about the alternative minimum tax (AMT). Monday’s Investor’s Business Daily mentions this subject. With only 11 days remaining in 2003, it is important that each reader check with a tax advisor about the impact of AMT on your 2003 tax bite. As I have previously stated, this year more taxpayers will be hurt by the AMT. The Joint Committee on Taxation estimates the number of AMT tax returns will increase next year from 2003’s estimated 2.2 million to 3.7 million. Let me repeat that your AMT taxable income does not deduct state and local income taxes or property taxes, and many other deductions are added back into your taxable income. The AMT is a WMD for a growing number of American citizens. It can be found in your neighborhood, and placed there, in my view, by rats subsisting on pork in rat holes. The AMT will place one more nail in the coffin of consumer spending, and make it more difficult for Americans to save their hard-earned income.
I would like to close on a note that brings a smile to my face, and hopefully to yours. Harry Stine exemplifies the very best in an American employer. His presence graces the state of Iowa and blesses those fortunate enough to work with him. His Stine Seed Co. of Adel, Iowa, which he founded, employs 270 people, and it is one of the largest privately owned agricultural seed companies in the United States. It is a family business that controls the plant genetics that are the basis for half the soybean seed sold in the Midwest. After the company’s post-harvest luncheon, Harry gave a little talk and spoke from his heart. The employees heard Harry remark “we’re a can-do kind of people, that we work in the rain and the mud, and that he appreciated the hard work.� Harry then announced a gift to each employee of $1,000 for each year of service to his company, more than $1 million in all. Harry stated “all of these people help me every day. So it’s not a be-nice thing. It’s just what should be done.� Our United States need more Harry Stines. We need more appreciative givers all through each calendar year. Cindy Feltz has worked for Harry for six years, and she acknowledged “through someone else’s generosity I also can be generous.�
For the past several years the Saturday before Christmas has been the biggest shopping day of the year by sales volume. If you were to listen to the National Retail Federation, you would believe that, as of December 10, only 10% of consumers had finished their holiday shopping. This is the same organization that predicted retail holiday spending growth this year up 5.7% from last year, which would be the biggest gain since 1999. WalMart and Target discounted that forecast to a less than rosy holiday shopping period. There are fewer unplanned promotions, less deep markdowns, and a lack of gotta-have products. There will be less impulse buying today, and shoppers will not see as many 75 percent price cuts as seen just before last Christmas. Many shoppers will stay home and make online purchases. Most bricks and mortar retailers will be sorry they read the forecast headlines from the National Retail Foundation. The latter will not be stuck with the inventory. It’s not their money. Maybe more retailers should have paid attention to Joyce Vordahl’s plight. Joyce is 47 and lives in Snohomish, Washington. She installed plane interiors at Boeing, and was laid off last year. She has attempted to update her skills, has cashed in her retirement plan, and is nearing the end of her benefits. Joyce stated “it shocks me. I have never had a problem getting a job in my life.� At 15, she worked in a restaurant, and if necessary, will try to find a job at a restaurant. She remarked “when I go to a fast-food restaurant, I don’t see teenagers there anymore. I see myself.� Unfortunately, there are too many like Joyce on Main Street. The sales volume for retailers this holiday season will reflect the other millions of stories in the naked city very similar to Joyce’s.
I just love to read the reports from SEMI, the San Jose-based trade association for the semiconductor industry. They have perfected the art of spinning. Yesterday they reported a November book-to-bill ratio of 1.04, and that means that $104 worth of new orders were received for every $100 of product billed for the month. SEMI stated these bookings were 7% above the October level. The headlines did not reflect that the November 2003 billings level was 8.5% below the November 2002 billings. That would not have made for very upbeat reading.
I just love to read the news releases from Boeing. This week there was the splash on the proposed 7E7. Getting an entire picture is a lot to ask of this company. Their 717 plane entered the market in 1999. You probably haven’t heard much about it. There is good reason for that. Boeing is currently building just a single 717 per month at its Long Beach production facility, and only 37 orders remain to be filled. It could become a collector’s item! Boeing might have also mentioned that more layoff notices went out this week. One of the strongest stocks in the Dow this week was Boeing.
Misery sure loves company. According to the Census Bureau, the state of California had a net population growth of 482,467 people last year. More than 35.5 million people live in California, greater than 162 nations around the globe. More people mean more stress on the state’s infrastructure and resources. It’s too bad so many of the old gold mines have been closed for decades. California could have used the tax revenues on gold production at $410 per ounce.
Several times I have written about the alternative minimum tax (AMT). Monday’s Investor’s Business Daily mentions this subject. With only 11 days remaining in 2003, it is important that each reader check with a tax advisor about the impact of AMT on your 2003 tax bite. As I have previously stated, this year more taxpayers will be hurt by the AMT. The Joint Committee on Taxation estimates the number of AMT tax returns will increase next year from 2003’s estimated 2.2 million to 3.7 million. Let me repeat that your AMT taxable income does not deduct state and local income taxes or property taxes, and many other deductions are added back into your taxable income. The AMT is a WMD for a growing number of American citizens. It can be found in your neighborhood, and placed there, in my view, by rats subsisting on pork in rat holes. The AMT will place one more nail in the coffin of consumer spending, and make it more difficult for Americans to save their hard-earned income.
I would like to close on a note that brings a smile to my face, and hopefully to yours. Harry Stine exemplifies the very best in an American employer. His presence graces the state of Iowa and blesses those fortunate enough to work with him. His Stine Seed Co. of Adel, Iowa, which he founded, employs 270 people, and it is one of the largest privately owned agricultural seed companies in the United States. It is a family business that controls the plant genetics that are the basis for half the soybean seed sold in the Midwest. After the company’s post-harvest luncheon, Harry gave a little talk and spoke from his heart. The employees heard Harry remark “we’re a can-do kind of people, that we work in the rain and the mud, and that he appreciated the hard work.� Harry then announced a gift to each employee of $1,000 for each year of service to his company, more than $1 million in all. Harry stated “all of these people help me every day. So it’s not a be-nice thing. It’s just what should be done.� Our United States need more Harry Stines. We need more appreciative givers all through each calendar year. Cindy Feltz has worked for Harry for six years, and she acknowledged “through someone else’s generosity I also can be generous.�
Friday, December 19, 2003
12/19/03 The Truth Is
The truth is the Nasdaq has risen 46% this year. The annual survey of the U.S. Conference of Mayors found that, in nearly all the cities, requests for emergency food assistance have increased by an average of 17% over last year, and the demand for emergency shelter rose by an average of 13%. More than half of the cities surveyed reported that emergency food assistance facilities had to either turn people away or limit the groceries families could receive on each visit. Of those requesting food help, 59% were families and 39% were employed, the survey stated. According to the Conference of Mayors report, in 84% of the cities surveyed, shelters reported turning away homeless families because of too few beds and other resources. Officials estimated that 30% of requests for shelter by homeless people, and 33% of the requests by homeless families were unmet.
Since Saddam Hussein was captured, the truth is more Americans now back the Iraq war. According to new Pentagon data, The military has made 8,581 medical evacuations from Operation Iraqi Freedom for non-hostile causes in addition to the 2,273 wounded, a total of 10,854. The Pentagon states that 458 troops have died. In addition, the nine-month search for weapons of mass destruction has slowed. Charles McKay is a member of the Defense Threat Reduction Agency that has been involved in the search for WMD since May. He related “for a while this place was really active, but that’s changed in the last month. Now we’re lucky if there’s a mission once a week around here. Yesterday a U.S. intelligence official in Washington said David Kay, who heads up the weapons hunt staffed by more than 1,000 intelligence analysts, interrogators, and translators, is considering quitting his post. Hans Blix, the former chief U.N. weapons inspector, stated “it’s probably time to call it quits. The U.S. and Britain are so wedded to the idea that the Iraqis were hiding things that they are not willing to explore the possibility that they’re wrong.�
The truth is that the population of the United States is nearing 300 million. According to the Census Bureau, our population grew by 2.8 million in the past year to nearly 291 million people. At the current rate of growth, the Population Reference Bureau anticipates the nation will be home to 300 million people within four years. The high birth rate among Hispanics has helped fuel the increase. With more people, one would think more people would shop for more gifts this holiday season. That has not been the story. Northeast Phoenix resident Susie Johnston describes the current shopping landscape, and states that “it’s less stressful when you spend less. It’s definitely a relief. I’m pretty proud of myself. I didn’t have to pay interest on anything.� She shops for deep discounted merchandise and remarks “I know where to shop.� Retailers are depending on last-week shoppers to save their holiday sales. Among retailers surveyed by Jupiter Research, 37% said they would offer discounted or free express shipping this year to lure last-minute Internet shoppers, up from 24% last year, and 42% said they would extend the cutoff date for ordering, compared with 30% last year. Jupiter stated “you’ll see a growth in retailers offering orders through the 23rd.� Shopping.com confirmed that “people are beginning to believe in the online channel as a last-minute resource.�
The truth is that the U.S. Chamber of Commerce chief economist, Mark Regalia, recently stated “the dollar has sunk significantly which has spurred trade.� The U.S. trade representative’s office (USTR) stated in a report released yesterday that “indeed, over the last three years, while U.S. exports to the rest of the world have decreased by 10%, U.S. exports to China have increased by 66%.� It should be noted that the Chinese currency has had a fixed peg against the U.S. dollar for many years.
A new survey conducted on behalf of American Express Financial Advisors (AEFA), called the Personal Economy Index, shows “that the majority of Americans do not have a clear road map for their financial future.� The truth is a survey spokesperson indicates “the only economy we can control is our own personal economy and this is the one that matters most.� One highlight from the Personal Economy Index revealed that one third of Americans reported their financial situation has worsened over the past two years, and of those who stated it worsened, four out of ten cited an increase in healthcare costs and a third cited the decline in the stock market as factors.
The truth is we do not think of the Federal Reserve banks as employers. The fact is they employ more than 22,000 people, or did. Yesterday they stated as many as 300 jobs would be eliminated as part of a shift in their savings bond business toward electronic transactions. The banks will eliminate 25 to 50 percent of ist 638 positions in its retail securities position. In Buffalo, N.Y., 60 of 130 jobs will be cut in the restructuring. Branches in Kansas City, Richmond, Dallas, and Boston will also face stiff cuts. A spokesperson stated “as people move to the Internet, it requires fewer resources.� It’s a little like what’s taking place for retailers.
The truth is that the value of farmland in Iowa set a record in 1981 at $2,147 per acre. In 2003, that record was broken. The average price of Iowa farmland increased 9.2% to $2,275 an acre. When the 2003 average price is adjusted for inflation, this year’s value is about the same as the figures from the early 1970s. A lot depends on one’s frame of reference.
The truth is Illinois Governor Jennifer Granholm has faced nearly $3 billion in projected deficits due to a weak economy that produced smaller than expected revenues. She and the Illinois Legislature have been hard at work to resolve the budget problem. Yesterday a vote was taken, and there will be a 6-month delay in an income tax cut that was scheduled to take place in January. In addition, there will be a 5% cut in aid to universities; a $96 per-pupil cut in aid to public schools; revenue sharing for cities, townships, and counties took a 5% funding hit; half of the state tax on health care benefits provided by employers will be phased out; and an additional $12 million in administrative cuts shall be spread across state government. Erasing the state budget deficit was not easy, but Republicans and Democrats worked together and settled on compromises to achieve the desired results. If it can be done in Illinois, it can be done on Capital Hill.
Another governor was hard at work yesterday. Arnold stated “I had to do this.� The truth is California has been in a fiscal crisis for some time. He shall impose $150 million in spending cuts without the Legislature’s approval. The cuts are expected to come from social service programs. Hopefully, these cuts will offset a portion of the lost revenue from the repealed car tax.
In my view, the three-judge panel of the 2nd U.S. Circuit Court of Appeals stepped up to the plate for our Constitution, and yesterday stated that Jose Padilla’s detention since May 2002 was not authorized by Congress and that Bush could not designate him as an enemy combatant without the authorization. The truth is the majority decision stated “but presidential authority does not exist in a vacuum, and this case involves not whether those responsibilities should be aggressively pursued, but whether the president is obligated, in the circumstances presented here, to share them with Congress.�
The truth is that Rob Glaser was a former Microsoft executive. He founded RealNetworks in 1994, and intoduced its digital media player in 1995. Microsoft introduced its own digital media player a year later, and in May 1999 launched Windows 98 Second Edition and integrated its digital media player into its operating system. For the last two and one-half years this bundling has remained in force. Yesterday Glaser’s company filed a $1 billion lawsuit against Microsoft. Glaser is attempting to liken Microsoft’s dominance over Netscape to the current battle for market share with RealNetworks and has cited notes from an internal Microsoft meeting quoting one of its executives as saying RealNetworks “is like Netscape, the only difference is we have a chance to start this battle earlier in the game.� In essence, Glaser is blaming his company’s lack of competitive success against Microsoft on the latter having WPM, as it were. In this case they would be tying its digital media player to its operating system. This is a losing argument. Users are able to remove links to its Windows Media Player, and thus the latter is not the system’s default media player.
The truth is the Labor Department stated yesterday that the number of Americans filing first-time applications for state unemployment benefits fell by 22,000 in the week that ended Saturday to 353,000. The whole truth is the number of people continuing to collect state jobless benefits rose 28,000 to 3.34 million in the week that ended Dec. 6. The Labor Department also said that 40 states and territories reported an increase in new claims, while 13 reported a decrease.
The truth is the Conference Board announced yesterday that the U.S. leading index increased 0.3 percent in November. Six of the ten indicators that make up the leading index increased in November. On the other hand, the lagging index decreased 0.3 percent in November, and that was after a 0.1 percent decline in October and a 0.5 percent drop in September. The Conference Board’s economist Ken Goldstein stated “the lone note of caution is that although the path is up, it has been bumpy and will remain so in the new year.�
Dan DiMicco, Nucor CEO, remarked that “the same fundamental forces that effect manufacturing are going to effect these so-called hi-tech service jobs.� Will Cashion, treasurer of the Association of Machinist and Aerospace Workers union, observes “there is no way to stop the global economy and as long as we continue to compete with poverty stricken countries, we can’t win.� The truth is Richmond Fed chairman Alfred Broaddus is not concerned as he stated “what we are undergoing here in the manufacturing sector in the Carolinas is an evolution. Industries in some locations diminish, other kinds of activities replace those and that’s the way our economy sort of churns itself and maintains the extraordinary longer-run performance that has been and is one of the real economic wonders of the world.� Broaddus is correct. Industries in some locations diminish. Yesterday MeadWestvaco announced they are cutting 1,000 jobs in a cost-cutting effort. Those cut from the payroll would not describe our GDP as one of the real economic wonders of the world.
The truth is the Nasdaq has risen 46% this year. The annual survey of the U.S. Conference of Mayors found that, in nearly all the cities, requests for emergency food assistance have increased by an average of 17% over last year, and the demand for emergency shelter rose by an average of 13%. More than half of the cities surveyed reported that emergency food assistance facilities had to either turn people away or limit the groceries families could receive on each visit. Of those requesting food help, 59% were families and 39% were employed, the survey stated. According to the Conference of Mayors report, in 84% of the cities surveyed, shelters reported turning away homeless families because of too few beds and other resources. Officials estimated that 30% of requests for shelter by homeless people, and 33% of the requests by homeless families were unmet.
Since Saddam Hussein was captured, the truth is more Americans now back the Iraq war. According to new Pentagon data, The military has made 8,581 medical evacuations from Operation Iraqi Freedom for non-hostile causes in addition to the 2,273 wounded, a total of 10,854. The Pentagon states that 458 troops have died. In addition, the nine-month search for weapons of mass destruction has slowed. Charles McKay is a member of the Defense Threat Reduction Agency that has been involved in the search for WMD since May. He related “for a while this place was really active, but that’s changed in the last month. Now we’re lucky if there’s a mission once a week around here. Yesterday a U.S. intelligence official in Washington said David Kay, who heads up the weapons hunt staffed by more than 1,000 intelligence analysts, interrogators, and translators, is considering quitting his post. Hans Blix, the former chief U.N. weapons inspector, stated “it’s probably time to call it quits. The U.S. and Britain are so wedded to the idea that the Iraqis were hiding things that they are not willing to explore the possibility that they’re wrong.�
The truth is that the population of the United States is nearing 300 million. According to the Census Bureau, our population grew by 2.8 million in the past year to nearly 291 million people. At the current rate of growth, the Population Reference Bureau anticipates the nation will be home to 300 million people within four years. The high birth rate among Hispanics has helped fuel the increase. With more people, one would think more people would shop for more gifts this holiday season. That has not been the story. Northeast Phoenix resident Susie Johnston describes the current shopping landscape, and states that “it’s less stressful when you spend less. It’s definitely a relief. I’m pretty proud of myself. I didn’t have to pay interest on anything.� She shops for deep discounted merchandise and remarks “I know where to shop.� Retailers are depending on last-week shoppers to save their holiday sales. Among retailers surveyed by Jupiter Research, 37% said they would offer discounted or free express shipping this year to lure last-minute Internet shoppers, up from 24% last year, and 42% said they would extend the cutoff date for ordering, compared with 30% last year. Jupiter stated “you’ll see a growth in retailers offering orders through the 23rd.� Shopping.com confirmed that “people are beginning to believe in the online channel as a last-minute resource.�
The truth is that the U.S. Chamber of Commerce chief economist, Mark Regalia, recently stated “the dollar has sunk significantly which has spurred trade.� The U.S. trade representative’s office (USTR) stated in a report released yesterday that “indeed, over the last three years, while U.S. exports to the rest of the world have decreased by 10%, U.S. exports to China have increased by 66%.� It should be noted that the Chinese currency has had a fixed peg against the U.S. dollar for many years.
A new survey conducted on behalf of American Express Financial Advisors (AEFA), called the Personal Economy Index, shows “that the majority of Americans do not have a clear road map for their financial future.� The truth is a survey spokesperson indicates “the only economy we can control is our own personal economy and this is the one that matters most.� One highlight from the Personal Economy Index revealed that one third of Americans reported their financial situation has worsened over the past two years, and of those who stated it worsened, four out of ten cited an increase in healthcare costs and a third cited the decline in the stock market as factors.
The truth is we do not think of the Federal Reserve banks as employers. The fact is they employ more than 22,000 people, or did. Yesterday they stated as many as 300 jobs would be eliminated as part of a shift in their savings bond business toward electronic transactions. The banks will eliminate 25 to 50 percent of ist 638 positions in its retail securities position. In Buffalo, N.Y., 60 of 130 jobs will be cut in the restructuring. Branches in Kansas City, Richmond, Dallas, and Boston will also face stiff cuts. A spokesperson stated “as people move to the Internet, it requires fewer resources.� It’s a little like what’s taking place for retailers.
The truth is that the value of farmland in Iowa set a record in 1981 at $2,147 per acre. In 2003, that record was broken. The average price of Iowa farmland increased 9.2% to $2,275 an acre. When the 2003 average price is adjusted for inflation, this year’s value is about the same as the figures from the early 1970s. A lot depends on one’s frame of reference.
The truth is Illinois Governor Jennifer Granholm has faced nearly $3 billion in projected deficits due to a weak economy that produced smaller than expected revenues. She and the Illinois Legislature have been hard at work to resolve the budget problem. Yesterday a vote was taken, and there will be a 6-month delay in an income tax cut that was scheduled to take place in January. In addition, there will be a 5% cut in aid to universities; a $96 per-pupil cut in aid to public schools; revenue sharing for cities, townships, and counties took a 5% funding hit; half of the state tax on health care benefits provided by employers will be phased out; and an additional $12 million in administrative cuts shall be spread across state government. Erasing the state budget deficit was not easy, but Republicans and Democrats worked together and settled on compromises to achieve the desired results. If it can be done in Illinois, it can be done on Capital Hill.
Another governor was hard at work yesterday. Arnold stated “I had to do this.� The truth is California has been in a fiscal crisis for some time. He shall impose $150 million in spending cuts without the Legislature’s approval. The cuts are expected to come from social service programs. Hopefully, these cuts will offset a portion of the lost revenue from the repealed car tax.
In my view, the three-judge panel of the 2nd U.S. Circuit Court of Appeals stepped up to the plate for our Constitution, and yesterday stated that Jose Padilla’s detention since May 2002 was not authorized by Congress and that Bush could not designate him as an enemy combatant without the authorization. The truth is the majority decision stated “but presidential authority does not exist in a vacuum, and this case involves not whether those responsibilities should be aggressively pursued, but whether the president is obligated, in the circumstances presented here, to share them with Congress.�
The truth is that Rob Glaser was a former Microsoft executive. He founded RealNetworks in 1994, and intoduced its digital media player in 1995. Microsoft introduced its own digital media player a year later, and in May 1999 launched Windows 98 Second Edition and integrated its digital media player into its operating system. For the last two and one-half years this bundling has remained in force. Yesterday Glaser’s company filed a $1 billion lawsuit against Microsoft. Glaser is attempting to liken Microsoft’s dominance over Netscape to the current battle for market share with RealNetworks and has cited notes from an internal Microsoft meeting quoting one of its executives as saying RealNetworks “is like Netscape, the only difference is we have a chance to start this battle earlier in the game.� In essence, Glaser is blaming his company’s lack of competitive success against Microsoft on the latter having WPM, as it were. In this case they would be tying its digital media player to its operating system. This is a losing argument. Users are able to remove links to its Windows Media Player, and thus the latter is not the system’s default media player.
The truth is the Labor Department stated yesterday that the number of Americans filing first-time applications for state unemployment benefits fell by 22,000 in the week that ended Saturday to 353,000. The whole truth is the number of people continuing to collect state jobless benefits rose 28,000 to 3.34 million in the week that ended Dec. 6. The Labor Department also said that 40 states and territories reported an increase in new claims, while 13 reported a decrease.
The truth is the Conference Board announced yesterday that the U.S. leading index increased 0.3 percent in November. Six of the ten indicators that make up the leading index increased in November. On the other hand, the lagging index decreased 0.3 percent in November, and that was after a 0.1 percent decline in October and a 0.5 percent drop in September. The Conference Board’s economist Ken Goldstein stated “the lone note of caution is that although the path is up, it has been bumpy and will remain so in the new year.�
Dan DiMicco, Nucor CEO, remarked that “the same fundamental forces that effect manufacturing are going to effect these so-called hi-tech service jobs.� Will Cashion, treasurer of the Association of Machinist and Aerospace Workers union, observes “there is no way to stop the global economy and as long as we continue to compete with poverty stricken countries, we can’t win.� The truth is Richmond Fed chairman Alfred Broaddus is not concerned as he stated “what we are undergoing here in the manufacturing sector in the Carolinas is an evolution. Industries in some locations diminish, other kinds of activities replace those and that’s the way our economy sort of churns itself and maintains the extraordinary longer-run performance that has been and is one of the real economic wonders of the world.� Broaddus is correct. Industries in some locations diminish. Yesterday MeadWestvaco announced they are cutting 1,000 jobs in a cost-cutting effort. Those cut from the payroll would not describe our GDP as one of the real economic wonders of the world.
Thursday, December 18, 2003
12/18/03 Microinvesting
I know you probably are thinking I shall be writing about small cap stocks. I�ll give you a hint. What does the holiday shopping season have in common with microinvesting? That clue was pretty lame. Let�s try one more. What do incentives for bargain hungry holiday shoppers have in common with microinvesting? That�s a great clue. I will put you out of your misery. This is the newest trend and it�s coming to your neighborhood. As opposed to the traditional discount or mail-in rebate, a growing number of retailers are appealing to a motivation stronger than simply bargain hunting, and that�s the need for consumers to better secure their financial future. Retailers have begun offering shoppers deposits into their college savings or retirement accounts through �microinvesting.� According to a recent report by Financial Research Corporation, microinvesting programs have the potential to capture about $22 billion annually in eligible shopping transactions, and this would represent an incremental $1.1 billion per year in assets to individual investors. Vestia Corporation of Atlanta launched its first program about three years ago. A spokesperson stated �while we�ve always had a large number of online and gift certificate merchants in our programs, I fully expect our off-line network to double in size by this time next year.� The newest participants are Hickory Farms and FastFrame, which has more than 250 custom picture-framing shops. Vestia�s senior vice president stated �microinvesting programs are truly a win-win for both participating retailers and consumers--retailers end up increasing customer loyalty and decreasing their promotional expense when compared to other traditional promotions, while consumers end up investing assets that otherwise may never have been set aside.�
To many, it just seems like words on a page when headlines describe crude oil climbing to a 9-month, post-Iraq war high of $33.75 per barrel. In Denver those words became truly meaningful. Many Denver motorists woke up yesterday to a 20 cent per gallon price overnight increase at the pump to $1.50 per gallon. That got everyone�s attention in a hurry. Hopefully, yesterday�s rise in January�s natural gas to $6.86 per million BTUs won�t produce the same unpleasant overnight results that gasoline did. In home heating, a natural gas services index is 16.5% higher than in November 2002.
It is the sign of the times. Goodwill Industries of Central North Carolina has plans to open three new stores and a new job-training center in 2004, investing an estimated $5.4 million. The expansion is expected to create about 25 jobs. Goodwill invests about 90% of its profits back into the community. Their group vice president stated �in a down economy, Goodwills have a tendency to do well. We�ve had a few good years, and we just felt it was time to maximize our investment.� Meanwhile, BellSouth Corp. will slash 1,074 positions nationwide between January and April next year. Positions affected include service technicians, clerical workers, operators, and pay phone staff. The company is exiting the pay phone business at the end of the year. Said a BellSouth spokesperson, �we are very much aware of the impact that the economy, regulation, and competition is having on the company� a scheme of government-managed competition that directs BellSouth to give away parts of its network at a rate that is below the cost that we have to invest to build it is not conducive to a positive effect on your company.� This layoff brings this year�s total to more than 3,000 union jobs that have been labeled as �surplus� and last year BellSouth cut nearly 12,000 union and nonunion jobs. It should be noted that BellSouth was not alone yesterday in announcing layoffs. Human Genome Sciences stated they shall fire 75 workers, nearly 7% of its workforce, because of overlapping responsibilities. The company lost $47 million last quarter.
I was reading yesterday that Japan has sold 18 trillion yen this year. Considering that the dollar is at about 107.27 yen, I must say Japan does not have much to show for those funds. We could have made use of those yen in the purchase of U.S. treasuries. The Treasury department stated purchases of U.S. treasuries by international investors in October would have dropped $1.7 billion had it not been for central banks. In my view, only lower deficits will help our dollar. Bush has essentially stated that we should trust him to spend less after his re-election. In other words, he needs to spend more in 2004 to buy the votes needed for re-election. Many accuse me of lacking sophistication, and that I should realize it�s American politics. My answer is I intend to cast my vote for Ron Paul.
A recent report from the nonpartisan think tank, the Council on Foreign Relations, concluded that the United States �remains dangerously ill-prepared to handle a catastrophic attack on American soil.� Analysts at the think tank estimated it would cost $98 billion over five years to give first responders and public health agencies the training and equipment to detect weapons of mass destruction and respond to an attack. The report stated �fire departments across the country have only enough radios to equip half the firefighters on a shift and breathing apparatuses for only one-third. Only 10 percent of fire departments in the United States have the personnel and equipment to respond to a building collapse.� Overall, the Department of Homeland Security will spend more than $29 billion in fiscal 2004, including $4.2 billion for the Office of Domestic Preparedness. It would be interesting to know how much of this money is spent on pet pork projects and/or contracts for political friends and allies. The answer should not come as a surprise.
Pharmacists across California are complaining about the proposed cuts in the state�s Medi-Cal program, which subsidizes drugs for poor citizens. A group of independent pharmacists and doctors have filed lawsuits against the state, accusing the head of the state�s Department of Health Services of violating federal laws that assure access to care for Medicaid patients. Pharmacists, doctors, dentists, and others serve California�s nearly 6.5 million Medi-Cal patients. Over the summer Governor Gray Davis and the Legislature had approved a 5% reduction in provider reimbursements scheduled to go into effect on January 1. Governor Arnold Schwarzenegger has proposed an additional 10% cut in reimbursements. A growing number of doctors in the state have stopped accepting Medi-Cal patients, and that number is expected to increase as a result of the proposed cuts. Almost all of the 6,000 pharmacies in the state fill Medi-Cal prescriptions. Many of these pharmacies are considering dropping Medi-Cal prescriptions. As one pharmacy owner stated, � if I don�t get paid enough to cover my expenses, I�ll have to close up.� Walgreens operates 360 stores in the state, and they claim their operating profit margin is a slim 2%, and that�s before the proposed reimbursement cuts.
According to Ernst & Young�s calculations, deflation is going to hit the bottom line for retailers this holiday season. Their director of retail and consumers products research stated �retailers are hoping their lower prices will be offset by an increase in unit sales. We believe that deflation will, ultimately, be a drag on sales in all three sectors (apparel, consumer electronics, and toys), but especially in toys.� Meanwhile, Amrican Express� John Theiss said 52% of Americans are planning to shop for discounts during the post-holiday season. Best Buy CEO Brad Anderson remarked �post-Christmas week is as big as the week that includes Thanksgiving.� I believe shoppers may find that prices will be a good deal lower than those during Thanksgiving week.
I know you probably are thinking I shall be writing about small cap stocks. I�ll give you a hint. What does the holiday shopping season have in common with microinvesting? That clue was pretty lame. Let�s try one more. What do incentives for bargain hungry holiday shoppers have in common with microinvesting? That�s a great clue. I will put you out of your misery. This is the newest trend and it�s coming to your neighborhood. As opposed to the traditional discount or mail-in rebate, a growing number of retailers are appealing to a motivation stronger than simply bargain hunting, and that�s the need for consumers to better secure their financial future. Retailers have begun offering shoppers deposits into their college savings or retirement accounts through �microinvesting.� According to a recent report by Financial Research Corporation, microinvesting programs have the potential to capture about $22 billion annually in eligible shopping transactions, and this would represent an incremental $1.1 billion per year in assets to individual investors. Vestia Corporation of Atlanta launched its first program about three years ago. A spokesperson stated �while we�ve always had a large number of online and gift certificate merchants in our programs, I fully expect our off-line network to double in size by this time next year.� The newest participants are Hickory Farms and FastFrame, which has more than 250 custom picture-framing shops. Vestia�s senior vice president stated �microinvesting programs are truly a win-win for both participating retailers and consumers--retailers end up increasing customer loyalty and decreasing their promotional expense when compared to other traditional promotions, while consumers end up investing assets that otherwise may never have been set aside.�
To many, it just seems like words on a page when headlines describe crude oil climbing to a 9-month, post-Iraq war high of $33.75 per barrel. In Denver those words became truly meaningful. Many Denver motorists woke up yesterday to a 20 cent per gallon price overnight increase at the pump to $1.50 per gallon. That got everyone�s attention in a hurry. Hopefully, yesterday�s rise in January�s natural gas to $6.86 per million BTUs won�t produce the same unpleasant overnight results that gasoline did. In home heating, a natural gas services index is 16.5% higher than in November 2002.
It is the sign of the times. Goodwill Industries of Central North Carolina has plans to open three new stores and a new job-training center in 2004, investing an estimated $5.4 million. The expansion is expected to create about 25 jobs. Goodwill invests about 90% of its profits back into the community. Their group vice president stated �in a down economy, Goodwills have a tendency to do well. We�ve had a few good years, and we just felt it was time to maximize our investment.� Meanwhile, BellSouth Corp. will slash 1,074 positions nationwide between January and April next year. Positions affected include service technicians, clerical workers, operators, and pay phone staff. The company is exiting the pay phone business at the end of the year. Said a BellSouth spokesperson, �we are very much aware of the impact that the economy, regulation, and competition is having on the company� a scheme of government-managed competition that directs BellSouth to give away parts of its network at a rate that is below the cost that we have to invest to build it is not conducive to a positive effect on your company.� This layoff brings this year�s total to more than 3,000 union jobs that have been labeled as �surplus� and last year BellSouth cut nearly 12,000 union and nonunion jobs. It should be noted that BellSouth was not alone yesterday in announcing layoffs. Human Genome Sciences stated they shall fire 75 workers, nearly 7% of its workforce, because of overlapping responsibilities. The company lost $47 million last quarter.
I was reading yesterday that Japan has sold 18 trillion yen this year. Considering that the dollar is at about 107.27 yen, I must say Japan does not have much to show for those funds. We could have made use of those yen in the purchase of U.S. treasuries. The Treasury department stated purchases of U.S. treasuries by international investors in October would have dropped $1.7 billion had it not been for central banks. In my view, only lower deficits will help our dollar. Bush has essentially stated that we should trust him to spend less after his re-election. In other words, he needs to spend more in 2004 to buy the votes needed for re-election. Many accuse me of lacking sophistication, and that I should realize it�s American politics. My answer is I intend to cast my vote for Ron Paul.
A recent report from the nonpartisan think tank, the Council on Foreign Relations, concluded that the United States �remains dangerously ill-prepared to handle a catastrophic attack on American soil.� Analysts at the think tank estimated it would cost $98 billion over five years to give first responders and public health agencies the training and equipment to detect weapons of mass destruction and respond to an attack. The report stated �fire departments across the country have only enough radios to equip half the firefighters on a shift and breathing apparatuses for only one-third. Only 10 percent of fire departments in the United States have the personnel and equipment to respond to a building collapse.� Overall, the Department of Homeland Security will spend more than $29 billion in fiscal 2004, including $4.2 billion for the Office of Domestic Preparedness. It would be interesting to know how much of this money is spent on pet pork projects and/or contracts for political friends and allies. The answer should not come as a surprise.
Pharmacists across California are complaining about the proposed cuts in the state�s Medi-Cal program, which subsidizes drugs for poor citizens. A group of independent pharmacists and doctors have filed lawsuits against the state, accusing the head of the state�s Department of Health Services of violating federal laws that assure access to care for Medicaid patients. Pharmacists, doctors, dentists, and others serve California�s nearly 6.5 million Medi-Cal patients. Over the summer Governor Gray Davis and the Legislature had approved a 5% reduction in provider reimbursements scheduled to go into effect on January 1. Governor Arnold Schwarzenegger has proposed an additional 10% cut in reimbursements. A growing number of doctors in the state have stopped accepting Medi-Cal patients, and that number is expected to increase as a result of the proposed cuts. Almost all of the 6,000 pharmacies in the state fill Medi-Cal prescriptions. Many of these pharmacies are considering dropping Medi-Cal prescriptions. As one pharmacy owner stated, � if I don�t get paid enough to cover my expenses, I�ll have to close up.� Walgreens operates 360 stores in the state, and they claim their operating profit margin is a slim 2%, and that�s before the proposed reimbursement cuts.
According to Ernst & Young�s calculations, deflation is going to hit the bottom line for retailers this holiday season. Their director of retail and consumers products research stated �retailers are hoping their lower prices will be offset by an increase in unit sales. We believe that deflation will, ultimately, be a drag on sales in all three sectors (apparel, consumer electronics, and toys), but especially in toys.� Meanwhile, Amrican Express� John Theiss said 52% of Americans are planning to shop for discounts during the post-holiday season. Best Buy CEO Brad Anderson remarked �post-Christmas week is as big as the week that includes Thanksgiving.� I believe shoppers may find that prices will be a good deal lower than those during Thanksgiving week.
12/18/03 Microinvesting
I know you probably are thinking I shall be writing about small cap stocks. I�ll give you a hint. What does the holiday shopping season have in common with microinvesting? That clue was pretty lame. Let�s try one more. What do incentives for bargain hungry holiday shoppers have in common with microinvesting? That�s a great clue. I will put you out of your misery. This is the newest trend and it�s coming to your neighborhood. As opposed to the traditional discount or mail-in rebate, a growing number of retailers are appealing to a motivation stronger than simply bargain hunting, and that�s the need for consumers to better secure their financial future. Retailers have begun offering shoppers deposits into their college savings or retirement accounts through �microinvesting.� According to a recent report by Financial Research Corporation, microinvesting programs have the potential to capture about $22 billion annually in eligible shopping transactions, and this would represent an incremental $1.1 billion per year in assets to individual investors. Vestia Corporation of Atlanta launched its first program about three years ago. A spokesperson stated �while we�ve always had a large number of online and gift certificate merchants in our programs, I fully expect our off-line network to double in size by this time next year.� The newest participants are Hickory Farms and FastFrame, which has more than 250 custom picture-framing shops. Vestia�s senior vice president stated �microinvesting programs are truly a win-win for both participating retailers and consumers--retailers end up increasing customer loyalty and decreasing their promotional expense when compared to other traditional promotions, while consumers end up investing assets that otherwise may never have been set aside.�
To many, it just seems like words on a page when headlines describe crude oil climbing to a 9-month, post-Iraq war high of $33.75 per barrel. In Denver those words became truly meaningful. Many Denver motorists woke up yesterday to a 20 cent per gallon price overnight increase at the pump to $1.50 per gallon. That got everyone�s attention in a hurry. Hopefully, yesterday�s rise in January�s natural gas to $6.86 per million BTUs won�t produce the same unpleasant overnight results that gasoline did. In home heating, a natural gas services index is 16.5% higher than in November 2002.
It is the sign of the times. Goodwill Industries of Central North Carolina has plans to open three new stores and a new job-training center in 2004, investing an estimated $5.4 million. The expansion is expected to create about 25 jobs. Goodwill invests about 90% of its profits back into the community. Their group vice president stated �in a down economy, Goodwills have a tendency to do well. We�ve had a few good years, and we just felt it was time to maximize our investment.� Meanwhile, BellSouth Corp. will slash 1,074 positions nationwide between January and April next year. Positions affected include service technicians, clerical workers, operators, and pay phone staff. The company is exiting the pay phone business at the end of the year. Said a BellSouth spokesperson, �we are very much aware of the impact that the economy, regulation, and competition is having on the company� a scheme of government-managed competition that directs BellSouth to give away parts of its network at a rate that is below the cost that we have to invest to build it is not conducive to a positive effect on your company.� This layoff brings this year�s total to more than 3,000 union jobs that have been labeled as �surplus� and last year BellSouth cut nearly 12,000 union and nonunion jobs. It should be noted that BellSouth was not alone yesterday in announcing layoffs. Human Genome Sciences stated they shall fire 75 workers, nearly 7% of its workforce, because of overlapping responsibilities. The company lost $47 million last quarter.
I was reading yesterday that Japan has sold 18 trillion yen this year. Considering that the dollar is at about 107.27 yen, I must say Japan does not have much to show for those funds. We could have made use of those yen in the purchase of U.S. treasuries. The Treasury department stated purchases of U.S. treasuries by international investors in October would have dropped $1.7 billion had it not been for central banks. In my view, only lower deficits will help our dollar. Bush has essentially stated that we should trust him to spend less after his re-election. In other words, he needs to spend more in 2004 to buy the votes needed for re-election. Many accuse me of lacking sophistication, and that I should realize it�s American politics. My answer is I intend to cast my vote for Ron Paul.
A recent report from the nonpartisan think tank, the Council on Foreign Relations, concluded that the United States �remains dangerously ill-prepared to handle a catastrophic attack on American soil.� Analysts at the think tank estimated it would cost $98 billion over five years to give first responders and public health agencies the training and equipment to detect weapons of mass destruction and respond to an attack. The report stated �fire departments across the country have only enough radios to equip half the firefighters on a shift and breathing apparatuses for only one-third. Only 10 percent of fire departments in the United States have the personnel and equipment to respond to a building collapse.� Overall, the Department of Homeland Security will spend more than $29 billion in fiscal 2004, including $4.2 billion for the Office of Domestic Preparedness. It would be interesting to know how much of this money is spent on pet pork projects and/or contracts for political friends and allies. The answer should not come as a surprise.
Pharmacists across California are complaining about the proposed cuts in the state�s Medi-Cal program, which subsidizes drugs for poor citizens. A group of independent pharmacists and doctors have filed lawsuits against the state, accusing the head of the state�s Department of Health Services of violating federal laws that assure access to care for Medicaid patients. Pharmacists, doctors, dentists, and others serve California�s nearly 6.5 million Medi-Cal patients. Over the summer Governor Gray Davis and the Legislature had approved a 5% reduction in provider reimbursements scheduled to go into effect on January 1. Governor Arnold Schwarzenegger has proposed an additional 10% cut in reimbursements. A growing number of doctors in the state have stopped accepting Medi-Cal patients, and that number is expected to increase as a result of the proposed cuts. Almost all of the 6,000 pharmacies in the state fill Medi-Cal prescriptions. Many of these pharmacies are considering dropping Medi-Cal prescriptions. As one pharmacy owner stated, � if I don�t get paid enough to cover my expenses, I�ll have to close up.� Walgreens operates 360 stores in the state, and they claim their operating profit margin is a slim 2%, and that�s before the proposed reimbursement cuts.
According to Ernst & Young�s calculations, deflation is going to hit the bottom line for retailers this holiday season. Their director of retail and consumers products research stated �retailers are hoping their lower prices will be offset by an increase in unit sales. We believe that deflation will, ultimately, be a drag on sales in all three sectors (apparel, consumer electronics, and toys), but especially in toys.� Meanwhile, Amrican Express� John Theiss said 52% of Americans are planning to shop for discounts during the post-holiday season. Best Buy CEO Brad Anderson remarked �post-Christmas week is as big as the week that includes Thanksgiving.� I believe shoppers may find that prices will be a good deal lower than those during Thanksgiving week.
I know you probably are thinking I shall be writing about small cap stocks. I�ll give you a hint. What does the holiday shopping season have in common with microinvesting? That clue was pretty lame. Let�s try one more. What do incentives for bargain hungry holiday shoppers have in common with microinvesting? That�s a great clue. I will put you out of your misery. This is the newest trend and it�s coming to your neighborhood. As opposed to the traditional discount or mail-in rebate, a growing number of retailers are appealing to a motivation stronger than simply bargain hunting, and that�s the need for consumers to better secure their financial future. Retailers have begun offering shoppers deposits into their college savings or retirement accounts through �microinvesting.� According to a recent report by Financial Research Corporation, microinvesting programs have the potential to capture about $22 billion annually in eligible shopping transactions, and this would represent an incremental $1.1 billion per year in assets to individual investors. Vestia Corporation of Atlanta launched its first program about three years ago. A spokesperson stated �while we�ve always had a large number of online and gift certificate merchants in our programs, I fully expect our off-line network to double in size by this time next year.� The newest participants are Hickory Farms and FastFrame, which has more than 250 custom picture-framing shops. Vestia�s senior vice president stated �microinvesting programs are truly a win-win for both participating retailers and consumers--retailers end up increasing customer loyalty and decreasing their promotional expense when compared to other traditional promotions, while consumers end up investing assets that otherwise may never have been set aside.�
To many, it just seems like words on a page when headlines describe crude oil climbing to a 9-month, post-Iraq war high of $33.75 per barrel. In Denver those words became truly meaningful. Many Denver motorists woke up yesterday to a 20 cent per gallon price overnight increase at the pump to $1.50 per gallon. That got everyone�s attention in a hurry. Hopefully, yesterday�s rise in January�s natural gas to $6.86 per million BTUs won�t produce the same unpleasant overnight results that gasoline did. In home heating, a natural gas services index is 16.5% higher than in November 2002.
It is the sign of the times. Goodwill Industries of Central North Carolina has plans to open three new stores and a new job-training center in 2004, investing an estimated $5.4 million. The expansion is expected to create about 25 jobs. Goodwill invests about 90% of its profits back into the community. Their group vice president stated �in a down economy, Goodwills have a tendency to do well. We�ve had a few good years, and we just felt it was time to maximize our investment.� Meanwhile, BellSouth Corp. will slash 1,074 positions nationwide between January and April next year. Positions affected include service technicians, clerical workers, operators, and pay phone staff. The company is exiting the pay phone business at the end of the year. Said a BellSouth spokesperson, �we are very much aware of the impact that the economy, regulation, and competition is having on the company� a scheme of government-managed competition that directs BellSouth to give away parts of its network at a rate that is below the cost that we have to invest to build it is not conducive to a positive effect on your company.� This layoff brings this year�s total to more than 3,000 union jobs that have been labeled as �surplus� and last year BellSouth cut nearly 12,000 union and nonunion jobs. It should be noted that BellSouth was not alone yesterday in announcing layoffs. Human Genome Sciences stated they shall fire 75 workers, nearly 7% of its workforce, because of overlapping responsibilities. The company lost $47 million last quarter.
I was reading yesterday that Japan has sold 18 trillion yen this year. Considering that the dollar is at about 107.27 yen, I must say Japan does not have much to show for those funds. We could have made use of those yen in the purchase of U.S. treasuries. The Treasury department stated purchases of U.S. treasuries by international investors in October would have dropped $1.7 billion had it not been for central banks. In my view, only lower deficits will help our dollar. Bush has essentially stated that we should trust him to spend less after his re-election. In other words, he needs to spend more in 2004 to buy the votes needed for re-election. Many accuse me of lacking sophistication, and that I should realize it�s American politics. My answer is I intend to cast my vote for Ron Paul.
A recent report from the nonpartisan think tank, the Council on Foreign Relations, concluded that the United States �remains dangerously ill-prepared to handle a catastrophic attack on American soil.� Analysts at the think tank estimated it would cost $98 billion over five years to give first responders and public health agencies the training and equipment to detect weapons of mass destruction and respond to an attack. The report stated �fire departments across the country have only enough radios to equip half the firefighters on a shift and breathing apparatuses for only one-third. Only 10 percent of fire departments in the United States have the personnel and equipment to respond to a building collapse.� Overall, the Department of Homeland Security will spend more than $29 billion in fiscal 2004, including $4.2 billion for the Office of Domestic Preparedness. It would be interesting to know how much of this money is spent on pet pork projects and/or contracts for political friends and allies. The answer should not come as a surprise.
Pharmacists across California are complaining about the proposed cuts in the state�s Medi-Cal program, which subsidizes drugs for poor citizens. A group of independent pharmacists and doctors have filed lawsuits against the state, accusing the head of the state�s Department of Health Services of violating federal laws that assure access to care for Medicaid patients. Pharmacists, doctors, dentists, and others serve California�s nearly 6.5 million Medi-Cal patients. Over the summer Governor Gray Davis and the Legislature had approved a 5% reduction in provider reimbursements scheduled to go into effect on January 1. Governor Arnold Schwarzenegger has proposed an additional 10% cut in reimbursements. A growing number of doctors in the state have stopped accepting Medi-Cal patients, and that number is expected to increase as a result of the proposed cuts. Almost all of the 6,000 pharmacies in the state fill Medi-Cal prescriptions. Many of these pharmacies are considering dropping Medi-Cal prescriptions. As one pharmacy owner stated, � if I don�t get paid enough to cover my expenses, I�ll have to close up.� Walgreens operates 360 stores in the state, and they claim their operating profit margin is a slim 2%, and that�s before the proposed reimbursement cuts.
According to Ernst & Young�s calculations, deflation is going to hit the bottom line for retailers this holiday season. Their director of retail and consumers products research stated �retailers are hoping their lower prices will be offset by an increase in unit sales. We believe that deflation will, ultimately, be a drag on sales in all three sectors (apparel, consumer electronics, and toys), but especially in toys.� Meanwhile, Amrican Express� John Theiss said 52% of Americans are planning to shop for discounts during the post-holiday season. Best Buy CEO Brad Anderson remarked �post-Christmas week is as big as the week that includes Thanksgiving.� I believe shoppers may find that prices will be a good deal lower than those during Thanksgiving week.
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