Employer costs for employee compensation averaged $26.05 per hour worked in
September 2005,the U.S. Department of Labor’s Bureau of Labor Statistics
reported. Wages and salaries averaged $18.28 and accounted for 70.2 percent,
while benefits averaged $7.77 and accounted for the remaining 29.8 percent.
In September 2005, private industry employer compensation costs averaged
$24.34 per hour worked.
In September 2005, employer costs in State and local governments averaged
$36.16 per hour worked.
Among State and local government employees, average hourly compensation
costs were
higher for management, professional, and related occupations ($44.11) than for
service occupations ($28.07) and sales and office occupations ($24.74). Wages and
salaries averaged $31.37 per hour worked for management, professional,
and related occupations and $17.25 for service occupations, and $15.49 for sales and
office workers.
Henry Giles: "If the poor man cannot always get meat, the rich man cannot
always digest it."
Before you join the bash Wal-Mart crowd, consider these facts: the company added
100,000 jobs this year, provided almost $200 million to various charitable causes,
and will save the average American family $2,300 per household. This overshadows
any good you believe you receive from your vote at your local polling place.
The Talmud: "The burden is equal to the horse's strength."
Former President Clinton told a global audience of diplomats,
environmentalists and others Friday that the Bush administration is
''flat wrong'' in claiming that reducing greenhouse-gas emissions to
fight global warming would damage the U.S. economy.
Doug Noland: "I believe a strong case can be made that we are in the midst of a
marketplace liquidity dislocation. Perhaps market yields are today no more
discounting prospective fundamentals than technology stocks and telecom bonds were
back in 1999/early 2000. While unsustainable, these types of liquidity dislocations
are nonetheless powerfully self-reinforcing – and just what we would expect from
history’s greatest Credit Bubble."
Canola seeds seem to be the best source of oil for biodiesel. The problem is twofold.
Currently, it sells for only 8 cents a pound with breakeven 33% higher. Secondly,
after the oil is squeezed out, 40% of the remaining canola seed is in mash, which is
frequently fed to livestock as a source of protein. This is similar to the leftover
sugar beet pulp(mixed with molasses) after processing the sugar beets to make sugar.
Canola growers maintain it will be necessary to find new and higher-value uses for
the mash. They might begin by sun-drying the mash as I did with the sugarbeet pulp.
William Barclay: "We will often find compensation if we think more of what life has
given us and less about what life has taken away."
Friday, December 09, 2005
Employer Costs For Employee Compensation
12/10/05 Employer Costs For Employee Compensation
Goings On
12/9/05 Goings On
Two-thirds of the companies participating in the fourth quarter "CFO Outlook" survey plan to increase capital spending over the next twelve months,and the average change is expected to be up 9%. Technology spending isexpected to rise at three-quarters of the surveyed companies, and almost half(48%) will increase research & development spending, while 47% expect nochange. Technology spending will rise an average 8%, and research &development, 5%.The CFO economic optimism index, which had been dropping since June 2004, jumped 4.34 points to 69.69. CFO optimism about their own company reached 77.37, the highest it's been since June 2004. The survey is conducted quarterly.
Douglas Gillespie: "As of the end of the third quarter, the United States owed the rest of the world almost $5.5 trillion more than the rest of the world owed it. This represented an increase of $1.25 trillion from a year earlier -- remarkable when you consider that as recently as the mid-1980s, the United States was a net creditor nation. This and other sobering facts are contained in the latest flow-of-funds data, released yesterday by the Federal Reserve."
California housing affordability down 4% in October.
Two-thirds of the companies participating in the fourth quarter "CFO Outlook" survey plan to increase capital spending over the next twelve months,and the average change is expected to be up 9%. Technology spending isexpected to rise at three-quarters of the surveyed companies, and almost half(48%) will increase research & development spending, while 47% expect nochange. Technology spending will rise an average 8%, and research &development, 5%.The CFO economic optimism index, which had been dropping since June 2004, jumped 4.34 points to 69.69. CFO optimism about their own company reached 77.37, the highest it's been since June 2004. The survey is conducted quarterly.
Douglas Gillespie: "As of the end of the third quarter, the United States owed the rest of the world almost $5.5 trillion more than the rest of the world owed it. This represented an increase of $1.25 trillion from a year earlier -- remarkable when you consider that as recently as the mid-1980s, the United States was a net creditor nation. This and other sobering facts are contained in the latest flow-of-funds data, released yesterday by the Federal Reserve."
California housing affordability down 4% in October.
In its 28th annual economicAccording to Reuters, Kroger has approached buyout firms Bain Capital, Thomas H. Lee Partners and Warburg Pincus about a joint offer for Albertsons.
forecast for 2006 presented by Comerica Bank, the Gary Anderson Center for
Economic Research (ACER) today forecast an overall economic slowdown in Orange
County. In Orange County, homeowners have to use 50 percent of their income
for housing costs, compared to 20 percent on the national average.
Responding to thegrowing demand for foods without trans fatty acids, Kellogg Company
today announced a major investment in new technologies that will make it
possible to reduce or eliminate trans fatty acids while also minimizing the
saturated fat content of its products.
As a major part of this investment, Kellogg will become one of the first
food manufacturers to use low linolenic soybean oil through an agreement with
Monsanto. Kellogg will use Monsanto's Vistive(R) low-lin soybean oil to
reduce or eliminate trans fatty acids in a number of its products.
Consumer confidence is up for the third
consecutive month, according to the December results of the RBC CASH (Consumer
Attitudes and Spending by Household) Index. Retailers are likely to react
favorably to this upward trend as more optimistic shoppers should equate to
strong sales over the holiday season.
The RBC CASH Index, which is derived from telephone interviews held with
1,000 individuals across the U.S. this week, stands at 85.5 for December. This
is compared to 66.8 for October - and substantially above the yearly average
of 78.7. Buoyed by continuing optimism in future economic conditions, the RBC
Expectations Index for December now stands at 53.9, continuing a positive
trend after expectations hit rock bottom in September, (when the RBC
Expectations Index stood at -13.5). It is also above the yearly average of
40.0.
Constellation Brands,Inc. today announced that its offer to purchase all of
the common shares of Vincor International Inc. expired at midnight
(Toronto time), on Dec. 8, 2005, consistent with the terms of the offer.
Nanotechnology, using particles as
small as 100 nanometers in size, is offering exciting new possibilities for
finding and treating breast tumors, according to speakers at the 28th Annual
San Antonio Breast Cancer Symposium being held this week. Two researchers from
Rice University in Houston, Texas, offered enticing insights into how these
minute particles can be manipulated to have different properties, and tagged
with antibodies to target them specifically at cancer cells.
According to the WSJ, Viacom's Paramout may make an offer for Dreamworks SKG.
NBC Universal has been in talks to purchase that company as well. I have sat this one
out, and until more information is forthcoming, I will continue to watch from the
sidelines. Dreamworks has not impressed me. It's been a single hit compnay.
Natural gas prices jumped 9 percent to a new high Thursday, and oil
prices also climbed above $61 a barrel as cold weather across the U.S. raised jitters
about increased demand for home-heating fuels. Oil and natural gas production in the
Gulf Coast area probably won't recover from this year's hurricanes until next summer,
Energy Secretary Sam Bodman stated today.
Americans increased their household debt at an annual rate of 11.6% in
the third quarter, the fastest growth in 18 years, the Federal Reserve
said Thursday in its quarterly flow of funds report
Total outstanding debt in the household sector rose to $11 trillion.
Total debt in the economy increased at a 9.1% annual rate, one
percentage point faster than in the second quarter, to $25.72 trillion
Non-federal borrowing grew at a 10% pace, the fastest in six years.
Total nonfederal debt outstanding grew to $21.13 trillion. Net national
savings fell by $120.5 billion at an annual rate. It was the first
quarter that net savings had been negative since the Fed began tracking
the data in 1952.
In the household sector, borrowing was paced by real estate loans.
Mortgage debt grew at a 14% pace, while credit card debt increased 5.4%
Meanwhile, household net worth increased at 10.6% annual rate to a
record $51.09 trillion on increases in the value of assets already
held. Real estate assets grew by $546 billion.
The federal government's debt increased at a 5.1% rate, up from 0.1%.
State and local government debt grew at a 12.6% rate, up from 6% in the
second quarter. Disposable personal income increased at a 2.8% annual
rate to $9.04 trillion. Household net worth was 5.65 times disposable
income, up from 5.54 times in the second quarter.
The Saks board of directors approved a 35 million share increase in its repurchase
plan. To date, during the fourth fiscal quarter, the company has repurchased 8 million shares
at an average cost approximating $17.60 oer share. The company anticipates
distributing a substantial portion of the net proceeds of its NDSG sale to Bon Ton
Stores to shareholders. The sale price is $1.185 billion and distribution could
include share repurchases, a special cash dividend, or a combination of both.
Given the company's management performance over the last several years, it would
be wise for the board to distribute the vast majority of the proceeds in the form
of a special dividend. I continue to believe that, after the start of the new year,
an offer will be forthcoming for Saks Fifth Avenue, the flagship operation. Under
the right management, this division could be a big winner. I strongly suggest the
present Saks board and management expend its finest energies to maximize the
return to the shareowners of the business in the coming year.
Today, gold reached a 25-year high of $527.60 an ounce and silver is a sliver
away from $9 an ounce.
Palatin Technologies,Inc. today announced that it will present at the JP Morgan 24th
Annual Healthcare Conference at 2:30 p.m. Pacific Time (5:30 p.m. EST) on
Thursday, January 12, 2006 at the Westin St. Francis Hotel in San Francisco,
California.
The Hennessee Hedge Fund Index is up 6% through the first 11 months of 2005.
In addition to the possibility of Home Depot, I wonder whether Wolseley or Rexel
are in the running to purchase Hughes Supply.
The Oil Service Index closed at a record high of $190.22.
A storm that wreaked havoc as it dumped as much as 10 inches of snow from Texas to Indiana barreled eastward on Friday, promising to bring more of the same.
Wednesday, December 07, 2005
Something Has To Give
12/8/05 Something Has To Give
From Bush's speech on 12/7/05 : "This generation of Americans in uniform is every bit as brave and determined as the generation that went to war after the attack on our nation 64 years ago today. Like those who came before, they are defeating a dangerous enemy, bringing freedom to millions, and transforming a troubled part of the world. And like those who came before, they will always have the gratitude of the American people." My patience has had it. Enough of this BS. Iraq did not attack us. We attacked Iraq. There is absolutely no connection to a war 64 years ago. There is a big difference between freedom of speech and manipulating facts to suit one's purposes. In fact, all of our fighting men and women have not placed themselves in harm's way since the founding of our nation so that Bush could make a mockery of the "freedom".
John Williams: "Risks of the current circumstance evolving eventually into a hyperinflationary depression remain extraordinarily high."
Rob Kirby: "Natural Gas is perhaps the only strategic commodity that is truly "above being rigged" - only because no one has enough of it to do so."
The Federal Reserve reported Wednesday that Americans' borrowing fell by $7.2 billion at an annual rate in October, the biggest amount on record, with much of that decline reflecting a record drop of $5.6 billion, at an annual rate, in the category that includes auto loans. The declines were a drop of 4 percent in overall borrowing, the biggest setback in nearly 15 years, and a decline of 4.9 percent in the category that includes auto loans, the biggest drop in 13 years.
Toll Brothers provided a range of fiscal 2006 earnings a share that was weighted below consensus forecasts, and said fiscal 2007 earnings may beat or miss a previous estimate of 20% growth. "Our sales results indicate that housing demand is returning to the more normalized levels of the decade from 1994 to mid-2003, before home prices really took off in quite a few markets," said Chairman and CEO Robert I. Toll.
GM is holding talks with Kerkorian's Tracinda investment firm regarding possible board representation.
From today's Financial Times: "In 2005 the US current account deficit is expected to top $700bn. It comes after 27 years of unbroken deficits that have totalled more than $5,000bn, leading to concerns of an impending global crisis. Once the massive financing required to keep on paying for such a widening gap dries up, there will be an ugly adjustment in the world economy. The dollar will collapse, triggering a stampede away from US debt, interest rates will shoot up and a sharp global recession will ensue."
Chad Hudson: "Every time it appears that consumers will start to retrench, some form of stimulus has been injected to spur consumer spending. With the housing boom starting to get long in the tooth, the last boost to consumer spending will diminish. While it is likely consumers will come through for the holiday season, it might prove to be the last hurrah. For retailers, the expansion of retail space over the past several years will exacerbate any slowdown in spending."
From Bush's speech on 12/7/05 : "This generation of Americans in uniform is every bit as brave and determined as the generation that went to war after the attack on our nation 64 years ago today. Like those who came before, they are defeating a dangerous enemy, bringing freedom to millions, and transforming a troubled part of the world. And like those who came before, they will always have the gratitude of the American people." My patience has had it. Enough of this BS. Iraq did not attack us. We attacked Iraq. There is absolutely no connection to a war 64 years ago. There is a big difference between freedom of speech and manipulating facts to suit one's purposes. In fact, all of our fighting men and women have not placed themselves in harm's way since the founding of our nation so that Bush could make a mockery of the "freedom".
John Williams: "Risks of the current circumstance evolving eventually into a hyperinflationary depression remain extraordinarily high."
Rob Kirby: "Natural Gas is perhaps the only strategic commodity that is truly "above being rigged" - only because no one has enough of it to do so."
The Federal Reserve reported Wednesday that Americans' borrowing fell by $7.2 billion at an annual rate in October, the biggest amount on record, with much of that decline reflecting a record drop of $5.6 billion, at an annual rate, in the category that includes auto loans. The declines were a drop of 4 percent in overall borrowing, the biggest setback in nearly 15 years, and a decline of 4.9 percent in the category that includes auto loans, the biggest drop in 13 years.
Toll Brothers provided a range of fiscal 2006 earnings a share that was weighted below consensus forecasts, and said fiscal 2007 earnings may beat or miss a previous estimate of 20% growth. "Our sales results indicate that housing demand is returning to the more normalized levels of the decade from 1994 to mid-2003, before home prices really took off in quite a few markets," said Chairman and CEO Robert I. Toll.
GM is holding talks with Kerkorian's Tracinda investment firm regarding possible board representation.
From today's Financial Times: "In 2005 the US current account deficit is expected to top $700bn. It comes after 27 years of unbroken deficits that have totalled more than $5,000bn, leading to concerns of an impending global crisis. Once the massive financing required to keep on paying for such a widening gap dries up, there will be an ugly adjustment in the world economy. The dollar will collapse, triggering a stampede away from US debt, interest rates will shoot up and a sharp global recession will ensue."
Chad Hudson: "Every time it appears that consumers will start to retrench, some form of stimulus has been injected to spur consumer spending. With the housing boom starting to get long in the tooth, the last boost to consumer spending will diminish. While it is likely consumers will come through for the holiday season, it might prove to be the last hurrah. For retailers, the expansion of retail space over the past several years will exacerbate any slowdown in spending."
In its weekly petroleum supply report, the U.S. Energy Department said American inventories of crude oil grew last week by 2.7 million barrels to 320.3 million barrels, or 11 percent above last year.
Inventories of distillate fuel, such as heating oil and diesel, rose by 2.7 million barrels to 130.6 million barrels, or about 6 percent higher than last year.
Gasoline inventories rose by 2.7 million barrels to 202.6 million barrels, or 4 percent below last year.
With oil imports at 10.6 million barrels per day and U.S. refiners running their plants last week at almost 91 percent of capacity, up more than 1 percent from the prior week, it is not surprising that the price for crude does not collapse. It is currently trading between $59 and $60 a barrel. This is December 8. Wait until Spring arrives and Americans go out for a weekend drive in the country. Those predicting a sharp drop in gasoline prices have their heads screwed on backwards.
Nobel literature laureate Harold Pinter slammed President Bush and British Prime Minister Tony Blair in his prize acceptance speech, saying the two leaders should be prosecuted for the invasion of Iraq.
Ford will eliminate up to 30,000 jobs and close at least 10 assembly plants.
The Dow Jones Industrial Average is now down for the year. The S&P 500 and the Nasdaq continue to show
small gains.
According to Challenger, Gray & Christmas, U.S. corporation job layoffs rose 22% in November to 99,279 and layoffs have increased for three months in a row. So far in 2005, there haebeen 964,232 job cuts, and that is 3.6% higher than one year ago.
According to the quarterly UCLA Anderson Forecast, a slowdown in the U.S. housing market could claim 800,000 jobs in 2006. The study also predicts a slowdown in construction activity through 2007 and moderate
job construction losses.
Barges are fuel-efficient and labor-cost efficient and thus there is a growing demand to move heavy grades of oil by barge. Kirby Corp. claims the no. 1 spot in hauling petroleum products and chemicals along inland waterways on barges with tanks.
Wages, Productivity, And Inflation
12/7/05 Wages, Productivity, And Inflation
In the past year unit labor costs have increased 1.8%, and, at the same time, productivity has increased 3.1%.
In the past year unit labor costs have increased 1.8%, and, at the same time, productivity has increased 3.1%.
The seasonally adjusted annual rates
of productivity growth in the third quarter were:
5.4 percent in the business sector and
4.7 percent in the nonfarm business sector.
In manufacturing, revised productivity increases in the third quarter
were:
3.4 percent in manufacturing,
6.5 percent in durable goods manufacturing, and
0.2 percent in nondurable goods manufacturing.
Unit labor costs fell 1.1 percent in the third quarter of 2005 following
a decline of 0.9 percent one quarter earlier. The implicit price deflator
for the business sector, which reflects changes both in unit labor costs and
in unit nonlabor payments, rose 2.8 percent in the third quarter of 2005.
In the nonfarm sector, when the rise in consumer prices is taken into account,
real hourly compensation declined 1.4 percent in the third quarter of 2005 and
3.1 percent one quarter earlier. The economists at the Fed cheer news like this,
but how can one be happy when the average worker's wages trail the rate of inflation?
Paul Kasriel: "Fed Chairman Greenspan
disparages the usefulness of the yield spread as a leading indicator. I have
found Greenspan to be a pretty reliable contra-indicator throughout
his professional career." The yield spread continues to flatten. Next week the Fed
raise interest rates again. This should make for an interesting picture. Rates are
poised to invert. Should this take place, will investors want to pour more money
into equities? I prefer to stay on the sidelines and watch the show.
"The best forecast of future real activity is provided by
the level of the term spread, not the change in the spread, nor
even the source of the change in the spread," states Arturo
Estrella, economist at the Federal Reserve Bank of New York.
Home sales in San Diego are 12.7 percent lower
than last year, the sharpest drop of any major urban county in the
state. The SF Bay Area is down an average of 7.2 percent, and home sales
in some rural counties around Sacramento, such as El Dorado and Placer,
have dropped more than 20 percent. Throughout the U.S., October pending
home sales declined 3.2% to a level 3.3% lower than one year ago.
The U.S. Postal Service reported today
it concluded fiscal 2005 with a net income of $1.4 billion on record revenues
of $70 billion and record volume of 212 billion pieces of mail.
Almost Four in 10 Consumers Plan to Pay Off Their Debt, and 30 Percent of
Workers Anticipate Getting a Promotion in the Coming Year,according to the latest
Experian-Gallup Personal Credit Index(SM) survey,and 68 percent of consumers say
they are optimistic about their financial situation in the coming year,
including 30 percent who are "very" optimistic.
Applications for mortgages at major U.S. banks rebounded by a seasonally adjusted 5.2% last week
after a slump during the Thanksgiving week, the Mortgage Bankers
Association reported Wednesday. Applications are down 6.1% from the same week a year ago.
Homeowners on average will see a 25.7% increase in their heating costs
from a year ago, the Energy Department stated Tuesday. That's down a bit from a
28.1% increase forecast last month, but if realized, the gain would be
the biggest since the 2000-01 season. Average heating bills rose 12%
last season. Meanwhile, in the latest BLS report, weekly wages rose 3 cents.
There is something wrong with this picture. Worker productivity continues to
outpace wage gains and the latter trail the rate of inflation. Bend over and
touch your toes. That's the position of the average worker.
Gold hits new 22-year high at $517.60 an ounce.
Monday, December 05, 2005
Dreamland
12/06/05 Dreamland
Bush: "We've been wise with your money, as well. Each year I've been in office,we've cut the rate of growth in non-security discretionary spending. We're ontrack to reach our goal of cutting the budget deficit in half by 2009." He must be in dreamland!
"The avian flu bears the potential for societal disruption ofunprecedented proportion," said Homeland Security Secretary Michael Chertoff. "Strong partnerships and smart planning will be our best protection against this threat. At the President's direction, we are tapping every capability and expertise within the federal government and among first responders and public health officials to maximize our nation's preparedness." I hope our preparedness is a step up from our lack of expertise after Katrina. Given the report from the 9/11 Commission, I have little faith in the President's direction and/or leadership. Maybe it would better be described as lack of direction and leadership.
Henry K. To: "This author would not be surprised if we see some kind of "financial accident" in either an emerging market country or in one of the companies of the S&P 500 - such as the bankruptcy of GM or Ford, for example."
John Hussman: " Despite seasonal hopes and economic optimism, the overall constellation of market conditions currently provides no support for accepting a material exposure to market fluctuations here. That may change if, for example, internals improve enough to signal a robust preference of investors to take risk, but here and now, risk-taking seems confined to speculative sectors of the market. "
Yesterday the 10-year Treasury yield jumped to 4.57% while gold continued its climb to $508.90 an ounce. Crude reached the $60 a barrel level and that indicates to me that gas at the pump is too cheap at roughly $2.13 a gallon. The ISM Services Index for November dipped to 58.5% from 60%. This flies in the face of the large addition of service jobs for November. On the other hand, the quality of many of those additions is suspect, such as, 60,000 seasonals for UPS.
I was surprised by Boston Scientific's $36 cash and $36 stock bid for Guidant. On the surface, that looks overly aggressive to me. I thought the reduced bid by J&J was rich. Then again, what do I know about medical hardware?
Visa USA said its e-commerce credit-card sales peaked on Thursday. All sales during the week of Nov. 28 to Dec. 4 reached $25.1 billion, a 13.9% increase over year-ago spending.
Janet Yellen, Pres. SF Fed: "The federal budget deficit is not sustainable. I'm concerned that the people take it as a given they have Social Security, Medicare and support from Medicaid to pay for nursing home care.A lot of people are not well prepared for retirement. Social Security, Medicare and Medicaid now equal 8 percent of gross domestic product and will rise to 16 percent of GDP in 2030. But tax revenues as a percent of GDP don't show a similar rise to pay for those benefits. Some think the federal government is in a similar position (to that of corporate America) in that it has unfunded liabilities."
Gary Lammert, The Economic Fractalist: "Will the debt laden credit cards of the American consumer be able to once again do what American manufacturing through reasonably paid blue
collar jobs cannot, provide buying power to sustain retailer viability
and economic growth? Has the Christmas rally completed its maximal
growth sequence a few weeks early? Time will tell."
Verizon stated Monday evening management employees hired after Jan. 1, 2006, will not earn pension benefits. Under the restructured benefit plans, after June 30, 2006, Verizon management employees will no longer earn pension benefits or receive any additional service credits toward the company's subsidy of retiree medical benefits. Management employees without 15 years of service will not be eligible for a company subsidy for retiree medical benefits. Do you think this policy will enable Verizon to attract top management candidates? Would you want to work for this company?
Rumsfeld: “To be responsible.....one needs to stop defining success in Iraq as the absence of terrorist attacks.” That's another way of saying that bodybags don't count. He is a spinmeister residing in Dreamland.
Texas is the only state in the nation that reduced education spending during the 2004-05 school year, according to a report released Monday by the National Education Association. This may help to explain the lack of intelligence for some with an extended stay on Pennsylvania Avenue.
Airbus received an enormous order for 150 single-aisle jets from China on Monday. Airbus stated it has offered China a 5 percent share of work on the airframe of the A350 and is considering building an assembly line for single-aisle planes in China.
The average yield on bonds rated BBB-, the lowest investment-grade ranking, and backed by payments on adjustable rate mortgages made to the riskiest borrowers is 7.23 percent, the highest since December 2003, according to JPMorgan. The yield was 5.7 percent in October. Do you think the bond market smells trouble
coming down the road?
Before you stand up and clap for GDP and employment numbers, it might be worth pondering what impact the real estate industry and government spending (municipal, state, and federal) have had on the last 4+ years of growth. Then adjust the growth for household and government debt levels as well as non-core inflation.
Last Friday I noted that the latest BLS numbers revealed that the workweek for nonsupervisory workers fell from 33.8 to 33.7 hours. Professor Andrew Samwick points out that this reduction equates to 10.56 million hours or about 312,000 workers.
Kmart comparable sales declined 2.8% in the quarter and Sears domestic sales plunged 10.8% in the quarter. At this rate, soon their sales performance will look those from Ford and GM.
Tom Naylor: "The
Bush: "We've been wise with your money, as well. Each year I've been in office,we've cut the rate of growth in non-security discretionary spending. We're ontrack to reach our goal of cutting the budget deficit in half by 2009." He must be in dreamland!
"The avian flu bears the potential for societal disruption ofunprecedented proportion," said Homeland Security Secretary Michael Chertoff. "Strong partnerships and smart planning will be our best protection against this threat. At the President's direction, we are tapping every capability and expertise within the federal government and among first responders and public health officials to maximize our nation's preparedness." I hope our preparedness is a step up from our lack of expertise after Katrina. Given the report from the 9/11 Commission, I have little faith in the President's direction and/or leadership. Maybe it would better be described as lack of direction and leadership.
Henry K. To: "This author would not be surprised if we see some kind of "financial accident" in either an emerging market country or in one of the companies of the S&P 500 - such as the bankruptcy of GM or Ford, for example."
John Hussman: " Despite seasonal hopes and economic optimism, the overall constellation of market conditions currently provides no support for accepting a material exposure to market fluctuations here. That may change if, for example, internals improve enough to signal a robust preference of investors to take risk, but here and now, risk-taking seems confined to speculative sectors of the market. "
Yesterday the 10-year Treasury yield jumped to 4.57% while gold continued its climb to $508.90 an ounce. Crude reached the $60 a barrel level and that indicates to me that gas at the pump is too cheap at roughly $2.13 a gallon. The ISM Services Index for November dipped to 58.5% from 60%. This flies in the face of the large addition of service jobs for November. On the other hand, the quality of many of those additions is suspect, such as, 60,000 seasonals for UPS.
I was surprised by Boston Scientific's $36 cash and $36 stock bid for Guidant. On the surface, that looks overly aggressive to me. I thought the reduced bid by J&J was rich. Then again, what do I know about medical hardware?
Visa USA said its e-commerce credit-card sales peaked on Thursday. All sales during the week of Nov. 28 to Dec. 4 reached $25.1 billion, a 13.9% increase over year-ago spending.
Janet Yellen, Pres. SF Fed: "The federal budget deficit is not sustainable. I'm concerned that the people take it as a given they have Social Security, Medicare and support from Medicaid to pay for nursing home care.A lot of people are not well prepared for retirement. Social Security, Medicare and Medicaid now equal 8 percent of gross domestic product and will rise to 16 percent of GDP in 2030. But tax revenues as a percent of GDP don't show a similar rise to pay for those benefits. Some think the federal government is in a similar position (to that of corporate America) in that it has unfunded liabilities."
Gary Lammert, The Economic Fractalist: "Will the debt laden credit cards of the American consumer be able to once again do what American manufacturing through reasonably paid blue
collar jobs cannot, provide buying power to sustain retailer viability
and economic growth? Has the Christmas rally completed its maximal
growth sequence a few weeks early? Time will tell."
Verizon stated Monday evening management employees hired after Jan. 1, 2006, will not earn pension benefits. Under the restructured benefit plans, after June 30, 2006, Verizon management employees will no longer earn pension benefits or receive any additional service credits toward the company's subsidy of retiree medical benefits. Management employees without 15 years of service will not be eligible for a company subsidy for retiree medical benefits. Do you think this policy will enable Verizon to attract top management candidates? Would you want to work for this company?
Rumsfeld: “To be responsible.....one needs to stop defining success in Iraq as the absence of terrorist attacks.” That's another way of saying that bodybags don't count. He is a spinmeister residing in Dreamland.
Texas is the only state in the nation that reduced education spending during the 2004-05 school year, according to a report released Monday by the National Education Association. This may help to explain the lack of intelligence for some with an extended stay on Pennsylvania Avenue.
Airbus received an enormous order for 150 single-aisle jets from China on Monday. Airbus stated it has offered China a 5 percent share of work on the airframe of the A350 and is considering building an assembly line for single-aisle planes in China.
The average yield on bonds rated BBB-, the lowest investment-grade ranking, and backed by payments on adjustable rate mortgages made to the riskiest borrowers is 7.23 percent, the highest since December 2003, according to JPMorgan. The yield was 5.7 percent in October. Do you think the bond market smells trouble
coming down the road?
Before you stand up and clap for GDP and employment numbers, it might be worth pondering what impact the real estate industry and government spending (municipal, state, and federal) have had on the last 4+ years of growth. Then adjust the growth for household and government debt levels as well as non-core inflation.
Last Friday I noted that the latest BLS numbers revealed that the workweek for nonsupervisory workers fell from 33.8 to 33.7 hours. Professor Andrew Samwick points out that this reduction equates to 10.56 million hours or about 312,000 workers.
Kmart comparable sales declined 2.8% in the quarter and Sears domestic sales plunged 10.8% in the quarter. At this rate, soon their sales performance will look those from Ford and GM.
Tom Naylor: "The
Impeach!
12/5/05 Impeach!
Next week will mark the 1,000 day of the Iraq war. Ninety-four percent of the 2,121 fighting men and women who have been killed in the Iraq war perished after Bush proclaimed "mission accomplished" on the aircraft carrier. In a recent poll 80% of the Iraqi people were in favor of us leaving their country and 45% stated they would support harm coming to our troops. In the meantime, the VP of Iraq stated that training of the Iraqi army had taken a setback over the past six months. When our citizens can no longer verify the trust in its leader, it is time for the leader to go.
Next week will mark the 1,000 day of the Iraq war. Ninety-four percent of the 2,121 fighting men and women who have been killed in the Iraq war perished after Bush proclaimed "mission accomplished" on the aircraft carrier. In a recent poll 80% of the Iraqi people were in favor of us leaving their country and 45% stated they would support harm coming to our troops. In the meantime, the VP of Iraq stated that training of the Iraqi army had taken a setback over the past six months. When our citizens can no longer verify the trust in its leader, it is time for the leader to go.
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