1/11/03 The Bogus Unemployment Rate Part 2

Here we go again. Six months ago I took out all the statistics and proved that the reported unemployment rate was bogus and much higher than reported. I received a good deal of how dare you emails, and in return sent a picture of Pavlov's dog. The following month my number was issued as the correct unemployment rate. Let's make this short and to the point. It's Saturday and the follower pathetics are probably asleep from too much booze. In the past sixty days the jobless number has risen by approximately 200,000. If the unemployment rate was 6% before the increased numbers, it can't remain the same now. It's so simple. The correct unemployment rate is 6.3%. If you think business conditions are improving, then there is little hope for your intelligence level.

The Cheesecake Factory had disappointing results. Maybe they should consider improving their food and lowering their prices. Maybe they should merge with Hooter's and serve cheesecake with cheesecake.

At least 5 GOP senators have voiced concerns over Bush's stimulus package. Bush said the plan would deliver an average tax cut of $1083 to 92 million Americans. The liberal Tax Policy Center said the average cut for middle income tax payers would be $265. Maybe we should ask H&R Block.

In 2002 companies with assets of $375 billion sought bankruptcy protection.

The Mexican Foreign Minister quit and is replaced by a critic of Nafta.

Bloomberg Personal Finance magazine shuts down after the February issue.

JC Penney to lay off 2000 and Delta 4000.

Germany lowers its economic forecast for 2003- again.

VC spending recedes to pre-bubble levels- around the mid-90's trendline.

Ashland Oil to miss 1st quarter 2003 earnings expectations. Ashland will be followed by many others.

Voltaire said "it is dangerous to be right in matters on which the established authorities are wrong." A good deal depends on your acceptance of anyone as an authority.

1/10/03 December Payrolls Plummet 101,000. Worker Hours Decline Too

The payroll number was the largest drop in 10 months. I promise the real number is worse than that. The gov't will revise the number downward just like November was revised from down 40,000 to down 88,000. The latter is a revision of over 100%. Those are not just mistakes. I have been writing for over one year about this reporting problem. No one in the press appears to be troubled nor does the public. Inaction welcomes incompetence and possible manipulative behavior.

For two months I have written that there would not be a war in Iraq or N. Korea. It's a bit like the stock market. Just think for yourselves and not be forced fed by what Washington wants you to believe. Independent thought based in rationality will get you a long way towards your goals. Follow the leader will get you to your nearest proctologist.

A missing pilot is being held by Iraq. Let's get that pilot back.

GM expects their profit in 2003 to drop by 25%. I think it will be larger than that. Too many vehicles and not enough buyers. The GM pension fund ended 2002 underfunded by $19.3. It's not easy to accomplish this feat.

California's Davis wants to increase taxes by 8.3 billion. He's such a poor excuse for a governor. Then again, gov't employment is the employment of last resort.

There are at least 3 1/2 million Americans drawing a week's unemployment benefits.

Fleet Boston took an $800 million charge for bad loans. I wonder if the loans were to Washington agencies.

Schering Plough issued a profit warning. It should have been expected with Claritin no longer just available via prescription.

The famed Interpreter of the Hopi prophecies crossed the Big Mountain on Black Mesa and explained "the Purifiers are coming! We don't want these weapons made up of the uranium you take from our land. If you take the uranium, the lightning won't come and bring the rains. The uranium attracts the lightning. You have no right to take the lightning from us! Our Prophecies tell of white people. They were once our brothers who went away to the East. They were supposed to come back here with inventions and help us to a better life. They would complete our spiritual circle. Instead they brought the symbol of a cross. The cross is a divider. They want to hang us- on a cross of uranium!"

1/9/03 The Peace Pipe

Noble Red Man, the Lakota chief, said " I've got Red Cloud's peace pipe. I also have Black Bear's pipe. The Peace Pipe is our only weapon. It's our holy power. It's God's power. The Pipe mediates between man and God. To receive the Pipe, to receive God's gift, you've got to be pure in your heart, mind, body, and soul. And never forget, that after the prayers, you've got to live that life, a life with God. That's the hardest part."

Wegman's Food Markets was founded in 1916. They now employ 27,700 workers, and no one has ever been laid off.

In a poll the top two resolutions for the new year were paying off debt and losing weight.

Alcoa really missed the estimates for the 4th quarter, and will lay off 8000 workers.

The dollar sank to its lowest level vs the euro since November 1999. Gold rallied to a new six year high.

Pimco's Bill Gross said that a weaker dollar was key to preventing global deflationary pressures. In my view, he has nothing to worry about. The dollar will stay weak and get weaker.

WalMart's December same store sales rose 2.3%.

AOL to take several billion dollar write-off. Maybe it should be more than that.

Last year, for the first time since 1988, there was an equity outflow from mutual funds- about $25 billion. If the dollar stays weak, that outflow could increase as foreign investors leave our market.

There were only 19 venture-backed IPOs in 2002.

Unemployment in Uruguay hits 20%.

Taiwan's exports exceed its imports by a record $18 billion.

Our healthcare spending is up to $1.5 trillion. We must be either very sick or very health conscious or hypochondriacs or a combination of all three.

In 2002 the world airline industry lost $13 billion and in 2001 $18 billion. Those combined losses exceed the total profits made over the previous 45 years.

Tom Arnold says he's been married in 3 weight categories.

1/8/03 Poverty And Stimulus Plans

As my readers know, my mantra is something Chief Justice Marshall said 167 years ago- "the power to tax is the power to destroy." I have been writing for years urging the elimination of all taxes on dividends- not because it will be a great stimulus but because it's not right to tax anything twice. The fact is only 1/5 of U.S. households hold stocks outside of individual retirement plans. Under this Bush plan a typical family of four with both parents working to earn $39,000 in yearly income get $1100 in tax relief. The top individual tax rate drops to 35% from the current 38.6%. This is a joke. Families will still be working the first four months of every year just to pay taxes. This is criminal. This is bondage. Where do these taxes go? If we investigated Enron and the like with great scrutiny, let's look behind the budget numbers and look at receipts at every agency. If we want to talk real, a household income of $18,100 or less for a family of four is considered the poverty level and translates into 1 out of every 8 people, 1 out of every 10 families, and 1 out of every 6 children. Somewhere along the line the American people need to get control of their own money. We do not need to have the government control our money. Control will be the death of democracy.

John Challenger, CEO Challenger, Gray, and Christmas: "we see no evidence of a significant increase in job creation in 2003."

There are 2 million farmers and ranchers in the U.S. and 50% are severely impacted by this country's drought which has created tremendous financial loss and the small surrounding towns are also impacted.

Cigna laying off 3000+ workers.

I wrote on Jan 1 about GE and the potential union trouble. Their largest union announced going out on strike on Jan 14. Good for them. It's about time workers took a stand on healthcare costs. No one else comes to their assistance.

WalMart to offer basic discount financial services for U.S. customers. Eventually, this will change the financial services industry.

Intel sees little improvement in tech spending in the next 6 months.

The largest short position exists in the dollar since 1999.

Here is the problem with the market-valuation. EMC came out with better numbers than expected and the eps for 2003 was raised to 12 cents. With the stock at 7 1/2 it's already at 60 times earnings. I'd rather go to a 99 cents only store for a bargain.

Treasury bond prices had their worst early January since 1982- thanks to the stimulus package and all the debt supply which will result.

Factory orders continue to drop.

U.S. home loans in foreclosure at a record level.

Romance takes another hit. Tiffany's holiday sales were worst than expected.

Before I sign off, let me say that the Bush stimulus plan is presented in good faith. Unfortunately, it will not stimulate the results now. If you want to stimulate the economy, send out a check for $1000 to every American 18 and over. That should amount to about $200 billion. To offset that expenditure eliminate a like amount in fat from the budget. Start with the bloated congressional staffs.

[1/7/2003 3:49:57 AM | michael buchsbaum]
1/7/03 Got Water?

As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's second biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.

Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.

AT&T and GM to cut jobs.

Romance takes a hit. 1-800-Flowers delivers a profit warning.

Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.

As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.

This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.

1/7/03 Got Water?

As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.

Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.

AT&T and GM to cut jobs.

Romance takes a hit. 1-800-Flowers delivers a profit warning.

Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.

As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.

This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.

1/6/03 Got Dirt

Sigmund Freud: "Money is brought into the most intimate relationship with dirt."

Dr. Elisabeth Engelberg from the Stockholm Center for Economic Psychology: "For women, money makes possible a state of equality. Conversely, men value money as an expression of power."

Mohandas Gandhi: "Happines is when you think, what you say, and what you do are in harmony."

Mel Gibson from Payback: "If I had been a little dumber, I would have joined the force myself."

California accounts for one-seventh of our country's GDP. High Tech rents in the Silicon Valley dropped 30% in 2002.

Gold at a 6 year high, oil at a 2 year high, and the dollar at a 3 year low against the pound.

The new dep't of homeland security brings together 22 different agencies in an effort to prevent terrorism. There is at least one major flaw- none of the merging agencies owns a computer system that can speak to the others, and there is no funding to make this happen. So much for "connecting the dots". The homeland security law is about 500 pages! Who's on first?

The majority of Americans are stockholders- thru pension plans, IRAs, and 410Ks, and therefore, do not receive dividends directly and don't benefit from the proposed dividend tax cut.

Pres. Bush to push for the extension of unemployment benefits, an increase in the child care tax credit, and a quicker phase out of the marriage penalty for two-income couples. Will the proposed package be too late to overcome unemployment, anemic wage growth, and dreary consumer confidence?

1/5/03 Got Milk

Having run a Fortune 500 agricultural processing company for many years, I think I have enough knowledge and experience to comment on the milk industry. It's pretty basic. Milk prices are so low that dairy farmers aren't making money. They are trying to hang on and stay in business. The problem begins with the federal government setting the price for milk. Farmers are unable to pass along increased costs for gasoline or other items to the consumer.

For every 100 pounds there are about 12 gallons of milk. A year ago the price was $17 per 100 pounds and now approximates $10.85. The federal floor price is $10.10, and that is the price at which the government buybacks begin. The supply of milk in this country exceeds demand. The U.S. government has more than a year's supply of dried milk in storage.

In November in Maine, dairy farmers dumped 10,000 gallons of milk in protest of low prices. They want a minimum contract level of $15 per 100 pounds or about $1.10 per gallon. This weekend Safeway had milk ads running at $1.69 per gallon.

I would be very interested to see what part of the new stimulus package helps our farmers. No group works longer hours, takes more risks, and receives less for their efforts.

Craig Columbus, president of Thomas Wealth Management, and probably the leading expert on insider buying and selling, said "insider buying is just anemic-there's been a buyer's strike." If insiders are unwilling to buy stock in their own companies, doesn't it tell you that current trading levels are too high?