4/26/03 Zorbing
Zorbing has its origins in New Zealand, the same country which brought the world bungy jumping. Despite the fact that the Zorb can pick up some pretty hefty speeds along its journey, there has never been a serious accident. You can Zorb on the hills, on snow, and on water. The Zorb is a clear bubble-like, inflatable 10.5 foot sphere with a 3.9 foot inner chamber. Air cushioning keeps the Zorber safe inside as they hurtle down the hill or along the water. This is considered an extreme sport, and may be coming to your neighborhood. It arrives on one of Boston's rivers today.
I mention Zorbing not just because it looks like fun but also because looks can be deceiving. On looking at tapes of Zorbing you might think it could be dangerous. The design, however, successfully eliminates the danger. That brings me to SARS. In the U.S. there might be fear from listening to the news and reading the headlines, but the reality of the danger hasn't really been understood. I know that is true on Wall Street. Yet, there are several companies that have mentioned SARS in their recent news releases. Analysts have looked down on those companies as making excuses for possible poor future results. I suggest Wall Street is all wet. Sybase has temporarily closed its offices in Beijing and Hong Kong out of the fear of the spreading SARS epidemic. The Sybase CEO said only yesterday "I am worried, the uncertainty kills markets. It's all a matter of confidence and if every day there are more cases and more people die, the impact will be quite dramatic by the end of the June quarter." We are talking uncertainty, lack of confidence, fear, and possible death. That combination can impact the social and financial fiber of any community on the globe. Shigeru Omi, head of the WHO's Western Pacific regional office, said "the threat posed by SARS is unprecedented. Tourism has almost disappeared. Normal life has also been severely disrupted."
When we look at the economies across the globe, the facts show weakness in the US., euro-denominated countries, Japan, and the U.K. Non-Japan Asia was the fastest growing region of the world economy last year, and China had extraordinary GDP growth in the first quarter- prior to their disclosing the onset of SARS. Asia ex-Japan and South Korea accounted for about 45% of global trade volume in 2002, and the OECD said they were expected to account for over 30% this year, but that was before the fallout from SARS which began in April. Even though Japan has had only two possible SARS cases reported, their Finance Minister is worried that SARS will have a serious impact on Japan's domestic economy. It's not just travel, tourism, shopping, trade, demand for industrial imports like metals and rubber, but also the risk to the global supply chain, and this was even mentioned in the latest Beige Book. Unlike Zorbing, SARS does not have a built-in design to cushion the danger as it spirals and spreads and picks up speed. A global impact on business has begun. This is not a short-run problem. As we go into summer, a virus becomes less potent, but then the weather changes
and it will spiral again. There truly is a growing level of ucertainty. It's no wonder that Japan's Nikkei closed at a new 20-year low.
Business investment fell at a 4.2% annual rate in the first quarter. That was before SARS became a front page fear. SARS can only further dampen the chances for a pick-up in business spending. I believe that is true too of consumer spending, and in the first quarter that spending was the slowest in a decade. Since the consumer accounts for almost 70% of our economy, it is only prudent to have a negative outlook going forward.
Taiwan quarantined over 1100 doctors, nurses, and patients in a hospital.
Three more deaths were reported yesterday in Toronto and eight new cases among health workers. Toronto continues to export SARS to other countries, and that includes the U.S.
Nineteen people have died in Singapore, and 2800 individuals have been quarantined.
WestPoint Stevens to cut 320 jobs, Reader's Digest 200 workers, and EDS to have an undisclosed number of layoffs.
The PC and cell phone market have depended on Asia for a good part of its growth. With SARS, a portion of that demand has been quarantined. Channel inventories are high as end users disappear from view and hide behind masks. Quarterly forecasts will be guided lower- much much lower- and stock prices will follow south.
The S&P posted its biggest decline in two weeks.
Warren Buffett: "No reason to get puffed up because I have a lot of money."
There is a fear that SARS has been significantly understated in Shanghai.
The dollar has lost 19% against the euro in the past 12 months.
Volkswagen said the drop in the dollar will hurt their sales and earnings this year, and that operating profit in 2003 will fall for the second straight year.
GM will trim production 10% in the second quarter and Ford 17%.
Robert Ardrey: "You can't say civilization isn't advancing. In every war they kill you in a new way."
NYC may legalize video slot machines in an effort to close the $3.7 billion budget gap. Just don't cough and sneeze around the machines.
Low-cost cigarettes are eating into sales for RJ Reynolds and Philip Morris. RJR cut its earnings forecast by about 50%. When tough economic times hit, price becomes more important, and brand items take more of a back seat.
Friday, April 25, 2003
4/25/03 Thinking Is Not Necessarily Knowing.
Wall Street and the Iraq war have one thing in common- you think you know but you don't really know. Yesterday President Bush provided the first public indication that his Administration didn't know where the WMD are in Iraq. I alluded to that in yesterday's blog. The President said "But we know he had them. And whether he destroyed them, moved them or hid them, we're going to find out the truth." I believe the President. I believe he thought he knew where the WMD were located. They had 100 possible sites with some evidence leading to that conclusion. David Albright, a former nuclear-weapons inspector in Iraq, said he had believed that the Aministration was overstating the likelihood that Iraq had rebuilt its weapons program. He said "If there are no weapons of mass destruction, I'll be mad as hell. I certainly accepted the administration claims on chemical and biological weapons. I figured they were telling the truth. If there is no massive arsenal, I will feel taken. Because they asserted things with such assurance." So what does Wall Street have in common with the above? There is a wide-spread assurance that the worst is behind the economy and that earnings will pick up strongly by the fourth quarter. Based on this divine knowledge, the markets have rallied strongly since the lows reached in 2002. There are some great companies like Starbucks selling at 35+ times earnings. The overall market does not have the continual growth of Starbucks. Some like Amazon are doing better. Their quarterly sales reached $1 billion and they only lost $10 million. The stock no longer sells at $14. It's now at $28. The overall market forecasts for revenues and earnings are significantly incorrect. They do not in any way take into account the impact of SARS, and there isn't one person with enhanced knowledge of this virus willing to state its existence is here only for the short run. In fact, just the opposite is true. I discussed some weeks back its similarity to AIDS based on RNA rather than DNA. That fact alone is vital. This fact is not based on thinking but rather on knowing. Just consider that the World Bank believes that this year SARS could cut the Asian economies by one-sixth. Based on what is happening in China, Hong Kong, Singapore, and other countries, that projection could be very low. Keep in mind that SARS is spreading and the death rate is rising. That is not a good formula for correct projections concerning revenues and earnings.
Initial U.S. jobless claims rose to 455,000, the highest level in more than one year, and were 30,000 higher than the number projected by economists. The four-week moving average is about 440,000.
The number of workers continuing to receive jobless benefits increased by 42,000, and was at the highest level since the week ended November 2, 2002. This does not reflect a lackluster economy.
Bert Murray: "It used to be that death and taxes alone were inevitable. Now there's shipping and handling."
Airline traffic for the week ended April 13 fell 11% from a year earlier. That's not lackluster either.
BE Aerospace, the world's largest maker of airline seats, said it would cut more jobs this quarter on top of the 1400 reductions already announced.
President Bush: "There is too much economic uncertainty today." The facts support that statement.
George Shaw: "A government which robs Peter to pay Paul can always depend on the support of Paul." That presupposes Paul doesn't have SARS.
There is an excellent article in the May issue of Business 2.0 by Paul Kaihla on Bob Beyster and his employee-owned SAIC located in La Jolla. They have revenues of approximating $6 billion, and they are the largest privately held infotech company.
U.S. light crude futures fell to a five-month low of $25.77 per barrel. Gas prices will continue to fall at the pumps.
The Conference Board's Help-wanted Advertising Index fell two points in March to 38. It was 45 one year ago. Their chief economist said "the earliest the labor market will snap back to life will be later this year or even early next year."
Howard Dvorkin, Pesident of Consolidated Credit Services, said, that in a recent poll, nearly 80% stated they would spend at least 10% less on a vacation than was the case a year ago, and that 45% said the most popular vacation destination would be with friends and family.
AIG said the spread of SARS is curbing sales in Hong Kong and China and may hurt earnings. Asia contributed over 25% of AIG's revenue last year.
Marriott says forecasting future performance is very difficult given the continued economic uncertainty, the lingering effects of the Iraq war, and SARS.
LVMH fears SARS could hurt luxury goods sales in its key Asian market. PPR's Gucci said that sales are thought to be possibly impacted as well.
China signed a contract for 30 Airbus jets. I trust those planes won't be delivered for some time. China's planes aren't welcome in too many places right now. SARS isn't going away any time soon.
U.K.'s GDP grew only 0.2% in the first quarter, the slowest pace in one year. The number of shoppers is lower than a year ago at this time.
CDC's Gerberding said "we are very concerned about what appears to us to be ongoing transmission in China of SARS. It's going to take a great deal of time before we really piece together the full picture there."
The CDC said you are not at risk if you travel to Toronto. Just stay away from hospitals and anyone who might cough or sneeze. At least they didn't include hiccups.
Beijing placed 4000 people under quarantine.
Japan's unemployment rate rose to 5.4% in March, and is near record levels. Fujitsu had a worse than expected loss.
A Millersville, Maryland woman returned from China with SARS symptoms. She and her husband and one year old son are being quarantined for 8 days. It just goes to show that quarantining is occurring all over the globe.
The Kansas City Royals will be playing the Toronto Blue Jays in Toronto for a weekend series. I predict that not too many fans will show up at the Skydome. Many players on the visiting Royals want the game postponed to later dates.
I predict that the spreading of SARS will freeze business spending.
A second major hospital in Beijing was shut yesterday.
In NYC the number of SARS cases are thought to be about 18. Mayor Bloomberg said a travel advisory against the city could cripple an already fragile economy.
A Philippine Airlines flight to South Korea was turned back to Manila after a passenger showed SARS-like symptoms. That was a smart decision. CDC's Gerberding said "there is nothing to suggest that an infected traveler could not come to this country and initiate a cascade of transmissions."
.
Wall Street and the Iraq war have one thing in common- you think you know but you don't really know. Yesterday President Bush provided the first public indication that his Administration didn't know where the WMD are in Iraq. I alluded to that in yesterday's blog. The President said "But we know he had them. And whether he destroyed them, moved them or hid them, we're going to find out the truth." I believe the President. I believe he thought he knew where the WMD were located. They had 100 possible sites with some evidence leading to that conclusion. David Albright, a former nuclear-weapons inspector in Iraq, said he had believed that the Aministration was overstating the likelihood that Iraq had rebuilt its weapons program. He said "If there are no weapons of mass destruction, I'll be mad as hell. I certainly accepted the administration claims on chemical and biological weapons. I figured they were telling the truth. If there is no massive arsenal, I will feel taken. Because they asserted things with such assurance." So what does Wall Street have in common with the above? There is a wide-spread assurance that the worst is behind the economy and that earnings will pick up strongly by the fourth quarter. Based on this divine knowledge, the markets have rallied strongly since the lows reached in 2002. There are some great companies like Starbucks selling at 35+ times earnings. The overall market does not have the continual growth of Starbucks. Some like Amazon are doing better. Their quarterly sales reached $1 billion and they only lost $10 million. The stock no longer sells at $14. It's now at $28. The overall market forecasts for revenues and earnings are significantly incorrect. They do not in any way take into account the impact of SARS, and there isn't one person with enhanced knowledge of this virus willing to state its existence is here only for the short run. In fact, just the opposite is true. I discussed some weeks back its similarity to AIDS based on RNA rather than DNA. That fact alone is vital. This fact is not based on thinking but rather on knowing. Just consider that the World Bank believes that this year SARS could cut the Asian economies by one-sixth. Based on what is happening in China, Hong Kong, Singapore, and other countries, that projection could be very low. Keep in mind that SARS is spreading and the death rate is rising. That is not a good formula for correct projections concerning revenues and earnings.
Initial U.S. jobless claims rose to 455,000, the highest level in more than one year, and were 30,000 higher than the number projected by economists. The four-week moving average is about 440,000.
The number of workers continuing to receive jobless benefits increased by 42,000, and was at the highest level since the week ended November 2, 2002. This does not reflect a lackluster economy.
Bert Murray: "It used to be that death and taxes alone were inevitable. Now there's shipping and handling."
Airline traffic for the week ended April 13 fell 11% from a year earlier. That's not lackluster either.
BE Aerospace, the world's largest maker of airline seats, said it would cut more jobs this quarter on top of the 1400 reductions already announced.
President Bush: "There is too much economic uncertainty today." The facts support that statement.
George Shaw: "A government which robs Peter to pay Paul can always depend on the support of Paul." That presupposes Paul doesn't have SARS.
There is an excellent article in the May issue of Business 2.0 by Paul Kaihla on Bob Beyster and his employee-owned SAIC located in La Jolla. They have revenues of approximating $6 billion, and they are the largest privately held infotech company.
U.S. light crude futures fell to a five-month low of $25.77 per barrel. Gas prices will continue to fall at the pumps.
The Conference Board's Help-wanted Advertising Index fell two points in March to 38. It was 45 one year ago. Their chief economist said "the earliest the labor market will snap back to life will be later this year or even early next year."
Howard Dvorkin, Pesident of Consolidated Credit Services, said, that in a recent poll, nearly 80% stated they would spend at least 10% less on a vacation than was the case a year ago, and that 45% said the most popular vacation destination would be with friends and family.
AIG said the spread of SARS is curbing sales in Hong Kong and China and may hurt earnings. Asia contributed over 25% of AIG's revenue last year.
Marriott says forecasting future performance is very difficult given the continued economic uncertainty, the lingering effects of the Iraq war, and SARS.
LVMH fears SARS could hurt luxury goods sales in its key Asian market. PPR's Gucci said that sales are thought to be possibly impacted as well.
China signed a contract for 30 Airbus jets. I trust those planes won't be delivered for some time. China's planes aren't welcome in too many places right now. SARS isn't going away any time soon.
U.K.'s GDP grew only 0.2% in the first quarter, the slowest pace in one year. The number of shoppers is lower than a year ago at this time.
CDC's Gerberding said "we are very concerned about what appears to us to be ongoing transmission in China of SARS. It's going to take a great deal of time before we really piece together the full picture there."
The CDC said you are not at risk if you travel to Toronto. Just stay away from hospitals and anyone who might cough or sneeze. At least they didn't include hiccups.
Beijing placed 4000 people under quarantine.
Japan's unemployment rate rose to 5.4% in March, and is near record levels. Fujitsu had a worse than expected loss.
A Millersville, Maryland woman returned from China with SARS symptoms. She and her husband and one year old son are being quarantined for 8 days. It just goes to show that quarantining is occurring all over the globe.
The Kansas City Royals will be playing the Toronto Blue Jays in Toronto for a weekend series. I predict that not too many fans will show up at the Skydome. Many players on the visiting Royals want the game postponed to later dates.
I predict that the spreading of SARS will freeze business spending.
A second major hospital in Beijing was shut yesterday.
In NYC the number of SARS cases are thought to be about 18. Mayor Bloomberg said a travel advisory against the city could cripple an already fragile economy.
A Philippine Airlines flight to South Korea was turned back to Manila after a passenger showed SARS-like symptoms. That was a smart decision. CDC's Gerberding said "there is nothing to suggest that an infected traveler could not come to this country and initiate a cascade of transmissions."
.
Thursday, April 24, 2003
4/24/03 Lackluster
What is the best thing since sliced bread? Simple. The honesty and clarity coming from the Fed's beige book. It reminds me of the joke- I'm good at being inarticulately abstracted for the same reason midgets are good at being short. Pablo Picasso would have loved the Fed. He disliked computers. He felt they were useless because they could only give him answers. The Fed doesn't even serve up questions. My suggestions are two-fold. We just need to hold our breath and believe. In the morning we'll say goodbye to lackluster performance forever, have taxes licked, and only have death to worry about. Alternatively, my favorite solution to combat what the Fed calls our lackluster economy, is to apply StriVectin. It works on wrinkles and crow's feet and possibly could be an anti-aging miracle cream. We know it combats stretch marks. We know this. In sum, StriVectin will make the economy look nicer. Things are rosier with the Nasdaq selling at a five month high.
The Fed said consumers are wary. Is that why AOL lost 289,000 subscribers last quarter up 109,000 from the prior quarter? The good news is that AOL's quarterly revenue only fell 4%.
Siebel reported a 93% decline in net income from the year ago's first quarter. It could have been worse.
Peoplesoft is closing its Santa Clara office and cutting 200 jobs. Software license fees dropped 40% in the first quarter. There is a silver lining. Their Pleasanton headquarters will remain intact.
What's lackluster about 45 million Americans not having health insurance? The number keeps rising every quarter.
AMR lost $1 billion in the quarter and the pilots are considering not ratifying the contract deal with the airline.
Planes leaving from NYC to Toronto are 90% empty. I can understand that. A 40 year-old doctor just returned to Baltimore after a visit to Toronto. He returned with the SARS symtoms.
China plans a broad SARS quarantine. They sealed off the 1200-bed Beijing University People's Hospital as "no one is allowed to enter or leave." They have 60 confirmed or suspected cases of SARS at that hospital.
JetBlue will possibly order 115 planes from Airbus as Boeing would lose out once again.
Britain's InterContinental Hotels to lay off 800 workers.
Germany's largest bank, Deutsche Bank, will report a first quarter loss.
Aviva, Britain's largest insurer, said the outlook remains challenging.
Germany's Siemens cautioned about slow spending in major markets.
Sony's results for the year fell 36% short of forecasts. The fourth quarter loss was larger than expected. Game business sales declined 25%. Sony's CEO said "we should have taken a more drastic reorganization...Sony's not in a satisfying business condition at all right now and we have to start a full scale overhaul."
Hilton's quarterly income dropped 74%.
In NYC, for the second straight day, customers flocked to the Abacus Federal Savings Bank in Chinatown and withdrew more than $2 million. In Philadelphia a branch of the same bank had similar problems yesterday as more than $700,000 was withdrawn.
Pfizer said that job cuts are coming to former Pharmacia Corp. sites in Kalamazoo County in Michigan.
U.S. troops have searched more than 80 of the top 100 most likely sites for WMD in Iraq. Lt. Gen. David McKiernan, commander of land forces in Iraq, said "we did have several hundred sites that we had some history of intelligence on that we were going to exploit." That doesn't sound like a real confidence builder.
Toronto accounts for 20% of the Canadian economy.
Alcoa may mothball its smelter in Ferndale, Washington come September 30.
For wary consumers, there are several offerings out there: $99 flights each way to Honolulu, Maui, and Kauai from either LAX or SFO; 7 day Gulf of Alaska cruises for $399; and for the real adventurous, $78 round trip airfares from Portland, Oregon to Sacramento. That's all the potential enjoyment that's fit to be printed.
What is the best thing since sliced bread? Simple. The honesty and clarity coming from the Fed's beige book. It reminds me of the joke- I'm good at being inarticulately abstracted for the same reason midgets are good at being short. Pablo Picasso would have loved the Fed. He disliked computers. He felt they were useless because they could only give him answers. The Fed doesn't even serve up questions. My suggestions are two-fold. We just need to hold our breath and believe. In the morning we'll say goodbye to lackluster performance forever, have taxes licked, and only have death to worry about. Alternatively, my favorite solution to combat what the Fed calls our lackluster economy, is to apply StriVectin. It works on wrinkles and crow's feet and possibly could be an anti-aging miracle cream. We know it combats stretch marks. We know this. In sum, StriVectin will make the economy look nicer. Things are rosier with the Nasdaq selling at a five month high.
The Fed said consumers are wary. Is that why AOL lost 289,000 subscribers last quarter up 109,000 from the prior quarter? The good news is that AOL's quarterly revenue only fell 4%.
Siebel reported a 93% decline in net income from the year ago's first quarter. It could have been worse.
Peoplesoft is closing its Santa Clara office and cutting 200 jobs. Software license fees dropped 40% in the first quarter. There is a silver lining. Their Pleasanton headquarters will remain intact.
What's lackluster about 45 million Americans not having health insurance? The number keeps rising every quarter.
AMR lost $1 billion in the quarter and the pilots are considering not ratifying the contract deal with the airline.
Planes leaving from NYC to Toronto are 90% empty. I can understand that. A 40 year-old doctor just returned to Baltimore after a visit to Toronto. He returned with the SARS symtoms.
China plans a broad SARS quarantine. They sealed off the 1200-bed Beijing University People's Hospital as "no one is allowed to enter or leave." They have 60 confirmed or suspected cases of SARS at that hospital.
JetBlue will possibly order 115 planes from Airbus as Boeing would lose out once again.
Britain's InterContinental Hotels to lay off 800 workers.
Germany's largest bank, Deutsche Bank, will report a first quarter loss.
Aviva, Britain's largest insurer, said the outlook remains challenging.
Germany's Siemens cautioned about slow spending in major markets.
Sony's results for the year fell 36% short of forecasts. The fourth quarter loss was larger than expected. Game business sales declined 25%. Sony's CEO said "we should have taken a more drastic reorganization...Sony's not in a satisfying business condition at all right now and we have to start a full scale overhaul."
Hilton's quarterly income dropped 74%.
In NYC, for the second straight day, customers flocked to the Abacus Federal Savings Bank in Chinatown and withdrew more than $2 million. In Philadelphia a branch of the same bank had similar problems yesterday as more than $700,000 was withdrawn.
Pfizer said that job cuts are coming to former Pharmacia Corp. sites in Kalamazoo County in Michigan.
U.S. troops have searched more than 80 of the top 100 most likely sites for WMD in Iraq. Lt. Gen. David McKiernan, commander of land forces in Iraq, said "we did have several hundred sites that we had some history of intelligence on that we were going to exploit." That doesn't sound like a real confidence builder.
Toronto accounts for 20% of the Canadian economy.
Alcoa may mothball its smelter in Ferndale, Washington come September 30.
For wary consumers, there are several offerings out there: $99 flights each way to Honolulu, Maui, and Kauai from either LAX or SFO; 7 day Gulf of Alaska cruises for $399; and for the real adventurous, $78 round trip airfares from Portland, Oregon to Sacramento. That's all the potential enjoyment that's fit to be printed.
Wednesday, April 23, 2003
4/23/03 Reality Is In A State Of Disconnect
Over the past six months or so Ebay shares have rallied about 100% to $92. This company has performed brilliantly and continues to generate significant free cash flow. Yesterday, estimates for earnings per share were raised from $1.35 to $1.45. That means the stock is selling at over 60 times earnings. The time to be buying excellent companies is during sharp market drops. With many averages selling at three and four month highs, now is not such a time.
Yesterday President Bush gave a vote of confidence to Alan Greenspan. That was nice. He is recovering from a successful prostate operation. Sometimes my memory is not sharp. Did Paul O'Neill also receive such kind words?
The FTSE has risen close to the 4000 level.
The number of mortgage applications filed this week was the lowest of the year as the refinancing index slumped 8% to its lowest level of 2003. Mortgage demand for home loans fell for the fifth straight week.
The WHO said the SARS mortality rate is worsening. It has risen from 4% to 5% or possibly in some areas to 6%. The WHO said that China's "health system has collapsed over the past 10 or 20 years because the central government has not invested in health." They went on to say "If China is not able to deal with SARS, then it will be very problematic to deal with globally...diseases like SARS don't respect borders."
Japan's March trade surplus shrank by 20%, and this was a much sharper drop than economists had expected.
Arcata, California is the first city in the nation to pass an ordinance that forbids its citizens from voluntarily complying with the Patriot Act.
7-Eleven Inc. had a 13.5 cent per-gallon profit margin on gasoline in the first quarter.
Kelly Services stated "As our first quarter results reflected, we are continuing to see a pattern of economic weakness and related softening demand for staffing services. As we enter the second quarter, uncertainty surrounding the timing of the economic recovery has increased."
Over 100 people have died from SARS in Hong Kong and that is true for China as well.
U.S. crude oil inventories are 15% lower than a year ago. When OPEC talks of a possible glut, they must be talking about hot air.
Exports account for 25% of China's economy. The Canton Trade Fair has generated $3.3 billion in exports so far, and this is down from $9.3 billion at the same time a year ago.
Only 9% of California voters have a great deal of confidence in the Legislature to do what is right to resolve the budget deficit.
Silicon Valley businesses have an office vacancy rate of nearly 33%.
Starting tomorrow all primary and secondary schools in Beijing will be closed for two weeks. This action has been taken because of the SARS virus, and 1.7 million children will be effected by the school closings.
Because of SARS, the CDC issued a travel advisory for Americans going to Canada.
Maybe we should send the UN weapons inspectors over to comb China's countryside in an effort to search for unreported cases of SARS. This virus is a real-time WMD.
Lucent posted its 12th consecutive quarterly loss.
Over the past six months or so Ebay shares have rallied about 100% to $92. This company has performed brilliantly and continues to generate significant free cash flow. Yesterday, estimates for earnings per share were raised from $1.35 to $1.45. That means the stock is selling at over 60 times earnings. The time to be buying excellent companies is during sharp market drops. With many averages selling at three and four month highs, now is not such a time.
Yesterday President Bush gave a vote of confidence to Alan Greenspan. That was nice. He is recovering from a successful prostate operation. Sometimes my memory is not sharp. Did Paul O'Neill also receive such kind words?
The FTSE has risen close to the 4000 level.
The number of mortgage applications filed this week was the lowest of the year as the refinancing index slumped 8% to its lowest level of 2003. Mortgage demand for home loans fell for the fifth straight week.
The WHO said the SARS mortality rate is worsening. It has risen from 4% to 5% or possibly in some areas to 6%. The WHO said that China's "health system has collapsed over the past 10 or 20 years because the central government has not invested in health." They went on to say "If China is not able to deal with SARS, then it will be very problematic to deal with globally...diseases like SARS don't respect borders."
Japan's March trade surplus shrank by 20%, and this was a much sharper drop than economists had expected.
Arcata, California is the first city in the nation to pass an ordinance that forbids its citizens from voluntarily complying with the Patriot Act.
7-Eleven Inc. had a 13.5 cent per-gallon profit margin on gasoline in the first quarter.
Kelly Services stated "As our first quarter results reflected, we are continuing to see a pattern of economic weakness and related softening demand for staffing services. As we enter the second quarter, uncertainty surrounding the timing of the economic recovery has increased."
Over 100 people have died from SARS in Hong Kong and that is true for China as well.
U.S. crude oil inventories are 15% lower than a year ago. When OPEC talks of a possible glut, they must be talking about hot air.
Exports account for 25% of China's economy. The Canton Trade Fair has generated $3.3 billion in exports so far, and this is down from $9.3 billion at the same time a year ago.
Only 9% of California voters have a great deal of confidence in the Legislature to do what is right to resolve the budget deficit.
Silicon Valley businesses have an office vacancy rate of nearly 33%.
Starting tomorrow all primary and secondary schools in Beijing will be closed for two weeks. This action has been taken because of the SARS virus, and 1.7 million children will be effected by the school closings.
Because of SARS, the CDC issued a travel advisory for Americans going to Canada.
Maybe we should send the UN weapons inspectors over to comb China's countryside in an effort to search for unreported cases of SARS. This virus is a real-time WMD.
Lucent posted its 12th consecutive quarterly loss.
Tuesday, April 22, 2003
4/22/03 Listen To Your Instincts
First I want to apologize. I may have been the first individual to predict one year ago a $300 billion budget deficit for the government fiscal year ending 9/30/03; however, I was much too low in my forecast. In my current view, the number will come closer to $450 billion. Being off by 50% does not make me very bright. With this burgeoning deficit, the May upcoming quarterly refunding will be of historic proportions- possibly $70 billion. I believe this huge supply of notes will create a rise in interest rates. Additionally, with simply the budget deficit and the account deficit added together (ex Medicare and Medicaid), this country will need to import about $2 billion of foreign capital daily. That is a tall order given the present low level of interest rates and the falling U.S. dollar. As such, in my view treasury notes and the dollar are overvalued. It should be noted that I have been right up to now on the dollar but wrong on treasuries.
Roy W. Walters: "If you're already in a hole, it's no use to continue digging."
There are 10 million households that earn one-third of the U.S. personal income and hold two-thirds of the personal wealth of all Americans. A very recent study shows that the wealthy have curtailed spending and that additional cuts can be expected over the next 12 months.
According to the SEC, 70% of the Fortune 500 do not provide enough analysis in financial disclosure.
Southwest Airlines increased their revenue and net income for the first quarter. They saved $77 million pre-tax in the quarter by hedging their fuel requirements. For the remainder of this year and thru next year they are mostly hedged as well. This is smart management at work. It should be noted that, without the hedging, Southwest would have lost money in the quarter.
Last year the annual Canton Trade Fair greeted more than 120,000 people, "closing deals worth nearly $17 billion," said Brad Glosserman of the CSIS Pacific Forum. Because of SARS, how many visitors to the Fair will be there this year?
Barry Goldwater: "A government that is big enough to give you all you want is big enough to take it all away."
Thousands of UK citizens are discontinuing plans to travel to Hong Kong and China as SARS spreads. Each year 308,000 Britons travel to Hong Kong and 258,000 to China.
Gold traded at a three week high of $333 per ounce.
After the first two weeks of April, WalMart said their same-store sales would be near the low end of its forecast for the month.
Three new SARS cases were announced in India. The Phillipines had its first SARS death. SARS has now impacted 26 countries and deaths mount. Howard Kunreuther, a Wharton School professor, said "I don't remember anything quite like this, at least in recent years. Not this kind of fear. I can't remember any epidemic that has had the impact on business this way."
500,000 respirator masks just reached Hong Kong in an urgent air shipment.
The Mormon Church has been sending missionaries to Hong Kong since 1950. No new missionaries will be sent until the SARS virus and its impact on Hong Kong is evaluated further.
Crude oil futures closed near $31 per barrel.
Milton Friedman: "The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy."
March U.S. leading economic indicators dropped 0.2%
Since November about 500,000 jobs have been lost in the U.S.
Bank of Japan Governor Fukui said his country's financial system is in a "severe state." The yen fell to its lowest level in about four years vs the euro. I give Fukui credit for being forthright. That's more than I can say for our Fed governors. On the other hand, maybe they believe the glass is truly full. That theory does not hold water, however, since hot air is opaque and cannot be seen.
Paul A. Samuelson: "Politicians like to tell people what they want to hear, and what they want to hear is what won't happen."
Chinese Premier Jiabao said their health system was ill prepared in the countryside where 70% of China's 1.3 billion people live and urged citizens not to travel to the countryside because SARS could spread "before we know it and the consequences could be too dreadful to contemplate."
Germany's Infineon, Europe's second-biggest maker of semiconductors, reported its eight consecutive quarterly loss. Results were worse than anticipated.
Lending Tree raised its 2003 guidance from 50 cents to 70 cents per share. The stock sells at about 17 times estimated earnings. The company continues to perform well.
I always welcome receipt of emails from my readers. Last night I received an email from a very respected and dedicated California educator. It was in response to my discussion of how local budget shortfalls are impacting everyone's neighborhoods and stated "Our governor has cut the education dollars to such a degree that it has impacted the lives and educations of millions of school children. Classified employees are no longer replaced with substitutes when they are ill which impacts the learning environment of children with special needs. Even credential teachers are not replaced on a daily basis when they are ill which causes classes to be combined and ratios to be increased. Suddenly, children cannot play on playground equipment due to lack of repair and no funds to replace them. Janitors are "cleaning" 1/2 again as many rooms which leaves learning environments less than desirable at times. After school programs are being cut leaving enrichment and tutoring needs unmet. Music, Art, and Library programs are slashed leaving the chance for creative learning environments ceasing to exist. Counselors in Middle Schools are forced to cover multiple schools per person and reach the needs of over 1200 students, many of whom are considered to be emotionally and academically at risk. Free lunch and breakfast programs are being reviewed and the level of assistance reduced. Teacher supply budgets have been cut forcing them to pay out of pocket for basic things needed on a day to day basis. The days will come when we look back at this time and see that our children were the victims of the choices that were made without their consent or knowledge. Many will say that choices were unavoidable, yet I say, they were avoidable and shame on the governor for making economic change happen on the backs of our children."
The Dow industrials began 2003 down 32% from its all-time high. Compared to the Nasdaq decline this is tame. Given the present debt levels within our economic borders, our growing dependence on foreign capital, the relatively low level of central bank gold holdings in relationship to their assets weighted in U.S. dollars, and the declining inclination for the big consumer spenders to spend as much, I envision very significant risk for the Dow at its present level. In fact, I am as bearish on the Dow now as I was on the Nasdaq in May/June 2000. I would also sell treasury, corporate, and municipals bonds, mortgage backed securities, and, if one were absolutely feeling the necessity to invest, I would purchase convertible bonds and short the underlying security (that strategy worked great in 1973 and 1974). Basically, I would continue to hold as few U.S. dollars as possible and continue to hold gold investments as well as notes issued by New Zealand and Norway.
First I want to apologize. I may have been the first individual to predict one year ago a $300 billion budget deficit for the government fiscal year ending 9/30/03; however, I was much too low in my forecast. In my current view, the number will come closer to $450 billion. Being off by 50% does not make me very bright. With this burgeoning deficit, the May upcoming quarterly refunding will be of historic proportions- possibly $70 billion. I believe this huge supply of notes will create a rise in interest rates. Additionally, with simply the budget deficit and the account deficit added together (ex Medicare and Medicaid), this country will need to import about $2 billion of foreign capital daily. That is a tall order given the present low level of interest rates and the falling U.S. dollar. As such, in my view treasury notes and the dollar are overvalued. It should be noted that I have been right up to now on the dollar but wrong on treasuries.
Roy W. Walters: "If you're already in a hole, it's no use to continue digging."
There are 10 million households that earn one-third of the U.S. personal income and hold two-thirds of the personal wealth of all Americans. A very recent study shows that the wealthy have curtailed spending and that additional cuts can be expected over the next 12 months.
According to the SEC, 70% of the Fortune 500 do not provide enough analysis in financial disclosure.
Southwest Airlines increased their revenue and net income for the first quarter. They saved $77 million pre-tax in the quarter by hedging their fuel requirements. For the remainder of this year and thru next year they are mostly hedged as well. This is smart management at work. It should be noted that, without the hedging, Southwest would have lost money in the quarter.
Last year the annual Canton Trade Fair greeted more than 120,000 people, "closing deals worth nearly $17 billion," said Brad Glosserman of the CSIS Pacific Forum. Because of SARS, how many visitors to the Fair will be there this year?
Barry Goldwater: "A government that is big enough to give you all you want is big enough to take it all away."
Thousands of UK citizens are discontinuing plans to travel to Hong Kong and China as SARS spreads. Each year 308,000 Britons travel to Hong Kong and 258,000 to China.
Gold traded at a three week high of $333 per ounce.
After the first two weeks of April, WalMart said their same-store sales would be near the low end of its forecast for the month.
Three new SARS cases were announced in India. The Phillipines had its first SARS death. SARS has now impacted 26 countries and deaths mount. Howard Kunreuther, a Wharton School professor, said "I don't remember anything quite like this, at least in recent years. Not this kind of fear. I can't remember any epidemic that has had the impact on business this way."
500,000 respirator masks just reached Hong Kong in an urgent air shipment.
The Mormon Church has been sending missionaries to Hong Kong since 1950. No new missionaries will be sent until the SARS virus and its impact on Hong Kong is evaluated further.
Crude oil futures closed near $31 per barrel.
Milton Friedman: "The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy."
March U.S. leading economic indicators dropped 0.2%
Since November about 500,000 jobs have been lost in the U.S.
Bank of Japan Governor Fukui said his country's financial system is in a "severe state." The yen fell to its lowest level in about four years vs the euro. I give Fukui credit for being forthright. That's more than I can say for our Fed governors. On the other hand, maybe they believe the glass is truly full. That theory does not hold water, however, since hot air is opaque and cannot be seen.
Paul A. Samuelson: "Politicians like to tell people what they want to hear, and what they want to hear is what won't happen."
Chinese Premier Jiabao said their health system was ill prepared in the countryside where 70% of China's 1.3 billion people live and urged citizens not to travel to the countryside because SARS could spread "before we know it and the consequences could be too dreadful to contemplate."
Germany's Infineon, Europe's second-biggest maker of semiconductors, reported its eight consecutive quarterly loss. Results were worse than anticipated.
Lending Tree raised its 2003 guidance from 50 cents to 70 cents per share. The stock sells at about 17 times estimated earnings. The company continues to perform well.
I always welcome receipt of emails from my readers. Last night I received an email from a very respected and dedicated California educator. It was in response to my discussion of how local budget shortfalls are impacting everyone's neighborhoods and stated "Our governor has cut the education dollars to such a degree that it has impacted the lives and educations of millions of school children. Classified employees are no longer replaced with substitutes when they are ill which impacts the learning environment of children with special needs. Even credential teachers are not replaced on a daily basis when they are ill which causes classes to be combined and ratios to be increased. Suddenly, children cannot play on playground equipment due to lack of repair and no funds to replace them. Janitors are "cleaning" 1/2 again as many rooms which leaves learning environments less than desirable at times. After school programs are being cut leaving enrichment and tutoring needs unmet. Music, Art, and Library programs are slashed leaving the chance for creative learning environments ceasing to exist. Counselors in Middle Schools are forced to cover multiple schools per person and reach the needs of over 1200 students, many of whom are considered to be emotionally and academically at risk. Free lunch and breakfast programs are being reviewed and the level of assistance reduced. Teacher supply budgets have been cut forcing them to pay out of pocket for basic things needed on a day to day basis. The days will come when we look back at this time and see that our children were the victims of the choices that were made without their consent or knowledge. Many will say that choices were unavoidable, yet I say, they were avoidable and shame on the governor for making economic change happen on the backs of our children."
The Dow industrials began 2003 down 32% from its all-time high. Compared to the Nasdaq decline this is tame. Given the present debt levels within our economic borders, our growing dependence on foreign capital, the relatively low level of central bank gold holdings in relationship to their assets weighted in U.S. dollars, and the declining inclination for the big consumer spenders to spend as much, I envision very significant risk for the Dow at its present level. In fact, I am as bearish on the Dow now as I was on the Nasdaq in May/June 2000. I would also sell treasury, corporate, and municipals bonds, mortgage backed securities, and, if one were absolutely feeling the necessity to invest, I would purchase convertible bonds and short the underlying security (that strategy worked great in 1973 and 1974). Basically, I would continue to hold as few U.S. dollars as possible and continue to hold gold investments as well as notes issued by New Zealand and Norway.
Monday, April 21, 2003
4/21/03 Forget Syria, N. Korea, Rebuilding Iraq, And Biotoxin Threats
Those headlines avoid the real horror stories. How is it that a sale in the U.S. has to be a give-away and not produce positive cash flow? What we're witnessing, for the most part, is business as not profitable commerce. For example, a year ago Midwest Airlines ordered 25 717s from Boeing. A big deal was made of the sale. I agree it was a big deal because the real buyer was not Midwest. Boeing bought their own planes as Boeing Capital used borrowed money to purchase the 25 jets at the list price of $940 million. Midwest will make monthly payments over 20 years. In reality, Midwest may not survive this year. Just as importantly, to make the induced sale, Midwest this year will receive more money from Boeing Capital than it will pay out. At the end of 2002, Boeing Capital owned 317 planes. Looking at it objectively, Boeing isn't selling planes and can't even give them away successfully. We see this type of induced transaction in all lines of business- ranging from autos to computer software. So I suggest stocks should be valued in a new light. What is the proper price/earnings ratio for give-away sales? How much of GM's revenue and Microsoft's booked sales are so-called induced transactions?
The largest 150 companies in the Silicon Valley lost $18.4 billion on sales of $265.4 billion over the last 4 quarters. In my book losses don't make for success stories and they don't make stocks cheap. 2003 has started out in a disappointing fashion, and the demand is not there to change matters for the better any time soon. In essence, tech stocks as a group are not good values.
Japanese investors are continuing to move into euro denominated assets.
The Metropolitan Chicago area now has a total population of nearly 9 million. Their economy hit the lowest level in February in a year. I don't see March and April numbers showing improvement.
Bloomberg said that UK's economic growth rate probably slowed to 0.3% in the first quarter. I wonder what the growth rate in the U.S truly is ex government spending and private sector induced transactions. You would be right on the money if you said not too hot.
Intel cut the prices of its fastest microprocessors by as much as 38%. I hope those microprocessors are not being utilized in computers manufactured in China and Taiwan. Workers are going to stay home rather than go to work. Living is preferable to dying.
Singapore will quarantine up to 2400 people in an attempt to contain the spreading of SARS.
Nixon thought he was the master of the cover-up. Actually, the Chinese can hold their own. The number of SARS cases is 10 times higher in Beijing than previously reported. Roads to shopping malls are empty. Malls are empty. One accountant said "the best thing is to stay home. What's one month's salary when your life is at stake?" She wants a month off from work- even without pay. She is not alone.
Fourteen million people live in Beijing. How many have died from SARS? How many are infected? How many are suspected to have SARS? The WHO representative in China said that "50% of the cases (suspected) most likely could be probable." Citizens are concerned for their survival. The official Xinhua agency said "any inappropriate methods of work will...evolve into grave catastrophe." Actually, the catastrophe is here. The cover-up sealed China's fate. The Beijing Star Daily said "a cover-up is more scary than an epidemic." I think they're both horrific.
As I have discussed so often, our states and local municipalities have, for the most part, overwhelming budget shortfalls. The payroll cuts, the reductions in services, and higher taxes in several areas will be coming to your local neighborhoods. They'll be with you for quite some time. It's called work harder (if you're lucky enough to have a job) and do with less.
Did you ever wonder how the Chinese accomplished the SARS cover-up? The authorities would transfer hospital patients to hotels, drive some around in ambulances, and drove others all around Beijing. These actions helped to avoid the local WHO representatives from seeing the real SARS picture. It's just a different take on avoiding reality- like with induced commercial transactions. You might say that no one is dying at Boeing. Maybe not but 35,000 people have lost their jobs, and management is still drawing a paycheck.
Does it bother you that Congress got a 3.1% pay raise this year and will get another hike in 2004? Retirees on Social Security got a 1.4% adjustment. How many citizens are really out of work? How many can't find a job? How many have to work part-time? How many are afraid of losing their jobs by the end of the day? How many can't make ends meet and stand on lines at food kitchens all over this country? You want me to read about Syria and N.Korea and rebuilding Iraq? I care about Americans not being able
have a roof over their heads. Surprise!!!! I am not a left wing liberal. I am an American who has his eyes wide open. That's more than I can say about most in the nation's capitol. The lack of performance in that locale should be accompanied by a reduction in salaries and an elimination of perks.
Economists, the Fed, and politicians say the U.S. is poised for expansion. If that's the case, they should rush out and buy common stocks and growth stock funds. They've been talking expansion for three years. They have been wrong for three years. They continue to draw salaries for being wrong. It's the American worker who achieves higher productivity and then gets fired. It's time the system gets changed. Let's eliminate the wrong-sayers. Don't replace them. You won't miss them. I promise.
Those headlines avoid the real horror stories. How is it that a sale in the U.S. has to be a give-away and not produce positive cash flow? What we're witnessing, for the most part, is business as not profitable commerce. For example, a year ago Midwest Airlines ordered 25 717s from Boeing. A big deal was made of the sale. I agree it was a big deal because the real buyer was not Midwest. Boeing bought their own planes as Boeing Capital used borrowed money to purchase the 25 jets at the list price of $940 million. Midwest will make monthly payments over 20 years. In reality, Midwest may not survive this year. Just as importantly, to make the induced sale, Midwest this year will receive more money from Boeing Capital than it will pay out. At the end of 2002, Boeing Capital owned 317 planes. Looking at it objectively, Boeing isn't selling planes and can't even give them away successfully. We see this type of induced transaction in all lines of business- ranging from autos to computer software. So I suggest stocks should be valued in a new light. What is the proper price/earnings ratio for give-away sales? How much of GM's revenue and Microsoft's booked sales are so-called induced transactions?
The largest 150 companies in the Silicon Valley lost $18.4 billion on sales of $265.4 billion over the last 4 quarters. In my book losses don't make for success stories and they don't make stocks cheap. 2003 has started out in a disappointing fashion, and the demand is not there to change matters for the better any time soon. In essence, tech stocks as a group are not good values.
Japanese investors are continuing to move into euro denominated assets.
The Metropolitan Chicago area now has a total population of nearly 9 million. Their economy hit the lowest level in February in a year. I don't see March and April numbers showing improvement.
Bloomberg said that UK's economic growth rate probably slowed to 0.3% in the first quarter. I wonder what the growth rate in the U.S truly is ex government spending and private sector induced transactions. You would be right on the money if you said not too hot.
Intel cut the prices of its fastest microprocessors by as much as 38%. I hope those microprocessors are not being utilized in computers manufactured in China and Taiwan. Workers are going to stay home rather than go to work. Living is preferable to dying.
Singapore will quarantine up to 2400 people in an attempt to contain the spreading of SARS.
Nixon thought he was the master of the cover-up. Actually, the Chinese can hold their own. The number of SARS cases is 10 times higher in Beijing than previously reported. Roads to shopping malls are empty. Malls are empty. One accountant said "the best thing is to stay home. What's one month's salary when your life is at stake?" She wants a month off from work- even without pay. She is not alone.
Fourteen million people live in Beijing. How many have died from SARS? How many are infected? How many are suspected to have SARS? The WHO representative in China said that "50% of the cases (suspected) most likely could be probable." Citizens are concerned for their survival. The official Xinhua agency said "any inappropriate methods of work will...evolve into grave catastrophe." Actually, the catastrophe is here. The cover-up sealed China's fate. The Beijing Star Daily said "a cover-up is more scary than an epidemic." I think they're both horrific.
As I have discussed so often, our states and local municipalities have, for the most part, overwhelming budget shortfalls. The payroll cuts, the reductions in services, and higher taxes in several areas will be coming to your local neighborhoods. They'll be with you for quite some time. It's called work harder (if you're lucky enough to have a job) and do with less.
Did you ever wonder how the Chinese accomplished the SARS cover-up? The authorities would transfer hospital patients to hotels, drive some around in ambulances, and drove others all around Beijing. These actions helped to avoid the local WHO representatives from seeing the real SARS picture. It's just a different take on avoiding reality- like with induced commercial transactions. You might say that no one is dying at Boeing. Maybe not but 35,000 people have lost their jobs, and management is still drawing a paycheck.
Does it bother you that Congress got a 3.1% pay raise this year and will get another hike in 2004? Retirees on Social Security got a 1.4% adjustment. How many citizens are really out of work? How many can't find a job? How many have to work part-time? How many are afraid of losing their jobs by the end of the day? How many can't make ends meet and stand on lines at food kitchens all over this country? You want me to read about Syria and N.Korea and rebuilding Iraq? I care about Americans not being able
have a roof over their heads. Surprise!!!! I am not a left wing liberal. I am an American who has his eyes wide open. That's more than I can say about most in the nation's capitol. The lack of performance in that locale should be accompanied by a reduction in salaries and an elimination of perks.
Economists, the Fed, and politicians say the U.S. is poised for expansion. If that's the case, they should rush out and buy common stocks and growth stock funds. They've been talking expansion for three years. They have been wrong for three years. They continue to draw salaries for being wrong. It's the American worker who achieves higher productivity and then gets fired. It's time the system gets changed. Let's eliminate the wrong-sayers. Don't replace them. You won't miss them. I promise.
Sunday, April 20, 2003
4/20/03 Unreconciled Federal Spending Transactions
If ever-present Congressional "oinks" were not enough wasters and abusers, Americans are additionally confronted with unreconciled federal spending transactions, and the latter include many payment errors. These faulty accounting practices will cost the taxpayers of this country a mere $35 billion this year and equate to approximately 44% of the supplemental funds approved for the war in Iraq. Possibly, the CBO should go to the "short form" and simplify matters by eliminating unresolved federal spending items- wipe them off the books. While accomplishing this little feat, dump the big Congressional spenders who are back alley examples of waste and abuse rather than upstanding fiscally responsible U.S. tax-payer representatives
Speaking of back alleys, Hong Kong's Secretary for Home Affairs, Patrick Ho, said he was shamed by the city's filthy back alleys. They need to change the name for the Chinese new year to the year of the cockroach.
Royal Philips Electronics NV is Europe's biggest consumer electronics manufacturer. They announced a decline in first quarter sales.
Since March 12, the Dow Jones Stoxx 50 and Stoxx 600 have risen by 22% and 19%, respectively. This is a good time to lighten up on many european stocks. Earnings for Stoxx 600 companies will decline in 2003 for the third consecutive year.
Intel and HP have closed their Hong Kong offices.
We will see whether teleconferencing can effectively replace face-to-face business meetings in many Asian countries. If not, orders will be negatively impacted. In any event, I believe SARS will be utilized as a growing explanation for slowing business conditions in that region of the world. It should be noted that many businessmen in Japan cannot travel to SARS-impacted countries because the health risk can eliminate their insurance coverage.
In Maryland, by law, the state can spend no more than it collects in taxes and other revenues. Deficits are not allowed. For Maryland to achieve this balanced budget, $1 billion in expenses will need to be cut. Governor Ehrlich, Maryland's first Republican governor in nearly four decades, says he can and must accomplish this goal.
U.S. Airways turned its underfunded pension plan for its pilots over to the government's Pension Benefit Guaranty Corp. Retirement benefits were cut in roughly half to $28,500 for 60 year old retirees. So much for union airline agreements.
An economist at the Asian Development Bank said yesterday that SARS could push Hong Kong into a recession. Growth prospects have already been cut to below 1%.
Toronto's business leaders plan on an April 28 summit meeting. SARS is having a serious economic impact in Toronto.
Toronto's Sunnybrook Hospital had to close its trauma unit when 12 medical workers were suspected of contracting SARS after being exposed to 2 SARS cases at the hospital.
Vietnam is closing its northern land border with China.
Air-India suspended all flights to Singapore from Delhi and Hyderabad and temporarily discontinued flights to Kuala Lumpur and Jakarta.
AMR's flight attendants' union cancelled their agreement to accept wage cuts and will hold a new vote. The Transport Workers Union may soon follow by taking legal action. Their representative stated "I believe the failure to disclose the existence of this program(executive compensation package) was a material breach of the company's duty to provide relevant information."
On Saturday 20 more people died from SARS in China and Hong Kong. Another 300 were infected by SARS in China- almost all in Beijing. Chinese authorities cancelled a week-long national holiday (maybe they were going to Ft. Lauderdale's spring break) to dissuade people from travelling and spreading the virus. After the 10 fold increase in the SARS tally was released, so were China's health minister and Beijing's Deputy Party boss. These firings will only increase their already-high unemployment rate.
If ever-present Congressional "oinks" were not enough wasters and abusers, Americans are additionally confronted with unreconciled federal spending transactions, and the latter include many payment errors. These faulty accounting practices will cost the taxpayers of this country a mere $35 billion this year and equate to approximately 44% of the supplemental funds approved for the war in Iraq. Possibly, the CBO should go to the "short form" and simplify matters by eliminating unresolved federal spending items- wipe them off the books. While accomplishing this little feat, dump the big Congressional spenders who are back alley examples of waste and abuse rather than upstanding fiscally responsible U.S. tax-payer representatives
Speaking of back alleys, Hong Kong's Secretary for Home Affairs, Patrick Ho, said he was shamed by the city's filthy back alleys. They need to change the name for the Chinese new year to the year of the cockroach.
Royal Philips Electronics NV is Europe's biggest consumer electronics manufacturer. They announced a decline in first quarter sales.
Since March 12, the Dow Jones Stoxx 50 and Stoxx 600 have risen by 22% and 19%, respectively. This is a good time to lighten up on many european stocks. Earnings for Stoxx 600 companies will decline in 2003 for the third consecutive year.
Intel and HP have closed their Hong Kong offices.
We will see whether teleconferencing can effectively replace face-to-face business meetings in many Asian countries. If not, orders will be negatively impacted. In any event, I believe SARS will be utilized as a growing explanation for slowing business conditions in that region of the world. It should be noted that many businessmen in Japan cannot travel to SARS-impacted countries because the health risk can eliminate their insurance coverage.
In Maryland, by law, the state can spend no more than it collects in taxes and other revenues. Deficits are not allowed. For Maryland to achieve this balanced budget, $1 billion in expenses will need to be cut. Governor Ehrlich, Maryland's first Republican governor in nearly four decades, says he can and must accomplish this goal.
U.S. Airways turned its underfunded pension plan for its pilots over to the government's Pension Benefit Guaranty Corp. Retirement benefits were cut in roughly half to $28,500 for 60 year old retirees. So much for union airline agreements.
An economist at the Asian Development Bank said yesterday that SARS could push Hong Kong into a recession. Growth prospects have already been cut to below 1%.
Toronto's business leaders plan on an April 28 summit meeting. SARS is having a serious economic impact in Toronto.
Toronto's Sunnybrook Hospital had to close its trauma unit when 12 medical workers were suspected of contracting SARS after being exposed to 2 SARS cases at the hospital.
Vietnam is closing its northern land border with China.
Air-India suspended all flights to Singapore from Delhi and Hyderabad and temporarily discontinued flights to Kuala Lumpur and Jakarta.
AMR's flight attendants' union cancelled their agreement to accept wage cuts and will hold a new vote. The Transport Workers Union may soon follow by taking legal action. Their representative stated "I believe the failure to disclose the existence of this program(executive compensation package) was a material breach of the company's duty to provide relevant information."
On Saturday 20 more people died from SARS in China and Hong Kong. Another 300 were infected by SARS in China- almost all in Beijing. Chinese authorities cancelled a week-long national holiday (maybe they were going to Ft. Lauderdale's spring break) to dissuade people from travelling and spreading the virus. After the 10 fold increase in the SARS tally was released, so were China's health minister and Beijing's Deputy Party boss. These firings will only increase their already-high unemployment rate.
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