5/7/06 The Future
Northwest Natural Gas is headquartered in Portland, Ore., and serves over 624,000 residential and business customers in Oregon and southwest Washington. It is the largest independent natural gas utility in the Pacific Northwest. With customer growth in excess of 3 percent for 19 consecutive years, it is also one of the fastest-growing local distribution companies in the nation. NW Natural has over $1.8 billion in total assets, which includes nearly 14 bcf of underground gas storage capacity within its service territory at Mist, Ore. The company has in place rate mechanisms that help to protect revenues from warmer than average weather and declining consumption. NW Natural has increased its dividends paid on common stock for 50 consecutive years. In my view, this company would make an excellent buyer for Cascade Natural Gas. The fit would be perfect.
``My views are as strong as ever, perhaps stronger,'' Warren Buffett said Saturday about his expectation that the dollar will weaken and that growing trade and current-account imbalances in the U.S. may eventually cause a painful correction in the dollar that could lead to higher inflation.
Robert McHugh: "Worse, the Dollar's 50 day moving average is 88.97, and has broken decisively below the declining 200 day moving average at 89.44. The last time the 50 day crossed decisively below the 200 day, after being significantly above it, was in 2002. What followed was a 30 percent decline in the value of the Dollar. "
Facing an April 1 deadline, 16 foreign firms active in Venezuela's oil and gas sector agreed to convert their existing operating agreements into contracts that will make them minority partners in joint ventures with PDVSA. Among the companies accepting the new arrangements were Chevron, BP, Spain's Repsol YPF, China National Petroleum, and Brazilian state-owned giant Petrobras.
George Ure: "The real fireworks will come later on this year if the dollar continues to decline. That's because the stock market is presently being priced like a piece of real estate (say a fourplex) would be valued in an inflationary market. As inflation comes along, the market price of the fourplex goes up (and so did the market this week). But at some point, the fourplex stops going up in price because the rents can't be increased enough to make it cashflow out. Well, the same kind of logic applies to this market."
The Iranian parliament threatened Sunday to force the government to withdraw from the Nuclear Nonproliferation Treaty if the United States continues pressuring Tehran to suspend uranium enrichment.
Mike Burk: "Widespread multi year and all time highs can lead one to question his bearhood. I entertained the idea of writing this report from a bullish perspective, but could not do it. Leadership is narrowing and downside volume is approaching the levels of the 2002 low. Prices are being held up by a lot of upside volume going into diminishing number of issues. That pattern is consistent with a top and it is likely the date of that top is near.
I expect the major indices to be lower on Friday May 12 than they were on Friday May 5."
When discussing risk factors, I frequently receive emails suggesting I am a doomsayer. I respond with examples of my bullishness in late 1974, in 1982, the period shortly after 9/11, and then again in 2003. In sum, I am enthusiastic when I see the risk/reward clearly in my favor. At this time, I will continue to sell into strength.
Gary Lammert: "The nonlinear end of the US second equity valuation growth fractal period beginning in 1858, will have a suddenness andunexpectedness that will be proportional to the magnitude of theunprecedented string of nearly fifty years of continuous annual positive US GDP growths. These last fifty years, unprecedented intheir continuity and magnitude are in the nth degree so antipodal tothe balanced annual negative and positive GDP annual growths that characterized the preceding 175 years of US economic activity. The fifty years started with American engineering greatness and manufacturing dominance. Inflows of world currencies seeking US madeproducts built aggregates of US savings. In the last twenty-fivey years, politicians and CEO profiteers have placed the US in a manufacturing less position - a hobo with empty out turned pockets. Borrowed money for 800 billion dollars of imports and 700 billion dollars of new federal governmental debt are responsible for 4.7 percent or 650 billion dollars of GDP growth. The numbers don't compute."
Saturday, May 06, 2006
Friday, May 05, 2006
My Take On Things
5/6/06 My Take On Things
First, we'll get the April employment report out of the way.
Nonfarm payroll employment increased by 138,000 in April, and the unemployment rate was unchanged at 4.7 percent. Over the year, nonfarm employment has risen by about 2 million. Average hourly earnings were up by 9 cents over the month, and over the past 12 months, have risen 3.8%, the fastest pace in 5 years but still trailing what I believe is the real inflation rate of 7%. In the service-providing sector, the health care industry remained a steady source of job growth in April,as employment rose by 23,000. Job gains were spread among nursing and residential care facilities, hospitals, and doctors' offices. Employment in finance and insurance continued to expand over the month. The credit intermediation industry added 9,000 jobs, and the insurance industry grew by 10,000 jobs. Since last September, employment growth in the insurance industry has strengthened; 55,000 jobs were added over this period. Employment in professional and business services and in food services and drinking establishments continued to trend up. Retail trade employment was down over the month. Employment in general merchandise stores declined by 34,000, following a large increase in March. Overall, the number of retail jobs has changed little, on net, since the middle of last year. In the goods-producing sector, manufacturing employment increased by 19,000 over the month, with gains occurring in several durable goods industries. Motor vehicles employment was up by 12,000 over the month. Despite the gain, motor vehicles employment in April was about the same as in January of this year. Over the month, there also were job gains in computer and electronic products and in fabricatedmetals. Manufacturing hours were unchanged in April, and factory overtime edged down.
The dollar slumped to one-year lows versus the euro, pound and Swiss franc and a seven-month low against the yen Friday. The U.S. dollar index traded below the 85 level, the lowest in one year. If things are so rosy in the U.S. and the economy so strong, then why is the dollar getting creamed? Why are foreign countries running from dollar assets? We will return to this in a few paragraphs.
June gold climbed $7.80 to close at $684.30 an ounce in New York. It finished Friday at the highest futures price in almost 26 years and tallied a gain of $29.80, or 4.6%, from the week-ago close of $654.50.
Results of the latest AP/IPSOS poll:
Just 33 percent of the public approves of Bush’s job performance, the lowest of his presidency. That compares with 36 percent approval in early April. Forty-five percent of self-described conservatives now disapprove of the president.
Just one-fourth of the public approves of the job Congress is doing, a new low in AP-Ipsos polling and down 5 percentage points since last month. A whopping 65 percent of conservatives disapprove of Congress.
A majority of Americans say they want Democrats rather than Republicans to control Congress (51 percent to 34 percent). That’s the largest gap recorded by AP-Ipsos since Bush took office. Even 31 percent of conservatives want Republicans out of power.
The souring of the nation’s mood has accelerated in the past three months, with the percentage of people describing the nation on the wrong track rising 12 points to a new high of 73 percent. Six of 10 conservatives say America is headed in the wrong direction.
This should come as no surprise. Sam Bodman, the US energy secretary, said on Thursday that the administration was considering supporting an end to the tariff, for example from Brazil, which adds $0.54 per gallon to the cost of refined petrol containing foreign ethanol.
Tight domestic supplies of ethanol have contributed to the rising price of petrol in the US because of bans on the use of MTBE, an alternative fuel additive that is being phased out because of environmental concerns over groundwater contamination.
Let me return to the employment report. The average number of hours worked in a week increased from 33.8 hours to 33.9 hours. That increase translates to an additional 130,000 jobs added. As such, the employment report was quite strong and suggests that second quarter GDP will be at least 4%. It would be a significant mistake in error for the Fed to pause any time soon. Rates need to go higher to cool the economy and the inflation flames. In addition, it is imperative that the dollar be provided some underpinnings, and they are lacking now. We need funds to feed our daily deficits, and that need will soon approach $3 billion a day. A stronger dollar is required to attract foreign capital. Due to our deficits, there is a risk premium the investors want. I believe the sooner we get to 6% Fed funds the greater the opportunity to put our economy on a more stable basis. People cried we could not handle $3 gas. That has pinched the wallets of those on Main Street. It should be noted that 6% Fed rates are still relatively modest by all historical standards. It is time to clamp down on the excessive liquidity within our economic pipeline.
Americans are driving less, trimming vacations and cutting back on heating and air conditioning, according to an AP-Ipsos poll taken as gasoline prices in many areas have topped $3 a gallon.
Seven in 10 say gas prices are causing a financial pinch. And that pressure is being felt increasingly by middle-income and higher-income families.
Al Gore visited Kazakhstan in 1993. Until yesterday, no other high ranking member of the Administration had been there. Cheney was there to meet with Kazakhstan's President Nazarbayev, who stated
" theUnited States is the largest foreign investor in Kazakhstan that invested 12 billion U.S. dollars to our economy so far, and our tradevolume has reached 2 billion U.S. dollars, and 374 ventures and enterprises of the United States work in Kazakhstan currently." The attraction for the U.S. is oil.
The shop chairman at a Delphi Corp. brake plant in Dayton, Ohio, was fired Friday evening and the union local's president was escorted from the plant in a police cruiser, leaving 1,500 hourly workers to talk about a wildcat strike.
Doug Noland: "But I would venture a prediction this evening that the more significant dynamic will be the degradation of at least some of the inflated asset-market-based ("Wall Street Finance") dollar-denominated "money" into much less precious non-money. That's the nature of bursting monetary Bubbles. And the longer the Wall Street "printing press" is left to its own devices To Inflate Scores of Bubbles at Home and Abroad, the more emasculated Dr. Bernanke's printing efforts will play down the road."
First, we'll get the April employment report out of the way.
Nonfarm payroll employment increased by 138,000 in April, and the unemployment rate was unchanged at 4.7 percent. Over the year, nonfarm employment has risen by about 2 million. Average hourly earnings were up by 9 cents over the month, and over the past 12 months, have risen 3.8%, the fastest pace in 5 years but still trailing what I believe is the real inflation rate of 7%. In the service-providing sector, the health care industry remained a steady source of job growth in April,as employment rose by 23,000. Job gains were spread among nursing and residential care facilities, hospitals, and doctors' offices. Employment in finance and insurance continued to expand over the month. The credit intermediation industry added 9,000 jobs, and the insurance industry grew by 10,000 jobs. Since last September, employment growth in the insurance industry has strengthened; 55,000 jobs were added over this period. Employment in professional and business services and in food services and drinking establishments continued to trend up. Retail trade employment was down over the month. Employment in general merchandise stores declined by 34,000, following a large increase in March. Overall, the number of retail jobs has changed little, on net, since the middle of last year. In the goods-producing sector, manufacturing employment increased by 19,000 over the month, with gains occurring in several durable goods industries. Motor vehicles employment was up by 12,000 over the month. Despite the gain, motor vehicles employment in April was about the same as in January of this year. Over the month, there also were job gains in computer and electronic products and in fabricatedmetals. Manufacturing hours were unchanged in April, and factory overtime edged down.
The dollar slumped to one-year lows versus the euro, pound and Swiss franc and a seven-month low against the yen Friday. The U.S. dollar index traded below the 85 level, the lowest in one year. If things are so rosy in the U.S. and the economy so strong, then why is the dollar getting creamed? Why are foreign countries running from dollar assets? We will return to this in a few paragraphs.
June gold climbed $7.80 to close at $684.30 an ounce in New York. It finished Friday at the highest futures price in almost 26 years and tallied a gain of $29.80, or 4.6%, from the week-ago close of $654.50.
Results of the latest AP/IPSOS poll:
Just 33 percent of the public approves of Bush’s job performance, the lowest of his presidency. That compares with 36 percent approval in early April. Forty-five percent of self-described conservatives now disapprove of the president.
Just one-fourth of the public approves of the job Congress is doing, a new low in AP-Ipsos polling and down 5 percentage points since last month. A whopping 65 percent of conservatives disapprove of Congress.
A majority of Americans say they want Democrats rather than Republicans to control Congress (51 percent to 34 percent). That’s the largest gap recorded by AP-Ipsos since Bush took office. Even 31 percent of conservatives want Republicans out of power.
The souring of the nation’s mood has accelerated in the past three months, with the percentage of people describing the nation on the wrong track rising 12 points to a new high of 73 percent. Six of 10 conservatives say America is headed in the wrong direction.
This should come as no surprise. Sam Bodman, the US energy secretary, said on Thursday that the administration was considering supporting an end to the tariff, for example from Brazil, which adds $0.54 per gallon to the cost of refined petrol containing foreign ethanol.
Tight domestic supplies of ethanol have contributed to the rising price of petrol in the US because of bans on the use of MTBE, an alternative fuel additive that is being phased out because of environmental concerns over groundwater contamination.
Let me return to the employment report. The average number of hours worked in a week increased from 33.8 hours to 33.9 hours. That increase translates to an additional 130,000 jobs added. As such, the employment report was quite strong and suggests that second quarter GDP will be at least 4%. It would be a significant mistake in error for the Fed to pause any time soon. Rates need to go higher to cool the economy and the inflation flames. In addition, it is imperative that the dollar be provided some underpinnings, and they are lacking now. We need funds to feed our daily deficits, and that need will soon approach $3 billion a day. A stronger dollar is required to attract foreign capital. Due to our deficits, there is a risk premium the investors want. I believe the sooner we get to 6% Fed funds the greater the opportunity to put our economy on a more stable basis. People cried we could not handle $3 gas. That has pinched the wallets of those on Main Street. It should be noted that 6% Fed rates are still relatively modest by all historical standards. It is time to clamp down on the excessive liquidity within our economic pipeline.
Americans are driving less, trimming vacations and cutting back on heating and air conditioning, according to an AP-Ipsos poll taken as gasoline prices in many areas have topped $3 a gallon.
Seven in 10 say gas prices are causing a financial pinch. And that pressure is being felt increasingly by middle-income and higher-income families.
Al Gore visited Kazakhstan in 1993. Until yesterday, no other high ranking member of the Administration had been there. Cheney was there to meet with Kazakhstan's President Nazarbayev, who stated
" theUnited States is the largest foreign investor in Kazakhstan that invested 12 billion U.S. dollars to our economy so far, and our tradevolume has reached 2 billion U.S. dollars, and 374 ventures and enterprises of the United States work in Kazakhstan currently." The attraction for the U.S. is oil.
The shop chairman at a Delphi Corp. brake plant in Dayton, Ohio, was fired Friday evening and the union local's president was escorted from the plant in a police cruiser, leaving 1,500 hourly workers to talk about a wildcat strike.
Doug Noland: "But I would venture a prediction this evening that the more significant dynamic will be the degradation of at least some of the inflated asset-market-based ("Wall Street Finance") dollar-denominated "money" into much less precious non-money. That's the nature of bursting monetary Bubbles. And the longer the Wall Street "printing press" is left to its own devices To Inflate Scores of Bubbles at Home and Abroad, the more emasculated Dr. Bernanke's printing efforts will play down the road."
Thursday, May 04, 2006
The Dollar
5/5/06 The Dollar
There was much excitement when crude declined below $70 and gasoline dropped 5%. I saw the same type of excitement at the $60 level. Nothing goes up in a straight line, and nothing goes down in a straight line. Although oil and gasoline are terribly important for each American, I think it would be wise to focus more on the dollar. The dollar index is flirting with the 85 level, and that is down from 91 at the beginning of the year. In other words, in dollar terms, the value of equities has declined 6.6% for foreign investors since the beginning of the year. Thus, rises in the Dow and the S&P 500 in 2006 have produced no gains for a foreigner. In addition, there is absolutely no reason for the dollar to have a sustained rally. That occurred in 2005 while the Fed was busy raising rates, and now they are looking to pause. Meanwhile, the 10-year and the 30-year treasury bonds have their highest rates in four years, and, in my view, they are low in relation to our trade deficit, current account deficit, and budget deficit. They are low when viewing rising costs for Medicare and Medicaid and Social Security. Our country is in trouble. The Fed cannot reflate its way out of deficits and the government will not cut expenditures. The cost for Iraq and Afghanistan accumulate daily. The talking heads on TV discuss earnings above expectations. How much is due to inflation and price increases. How much is due to cutting long time employees from the payroll and replacing them with inexperienced workers? If earnings are so great, then why do so many companies underperform on the revenue side?
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. announced today that the companies have completed enrollment in two Phase IIb clinical trials of bremelanotide in patients with erectile dysfunction (ED). Bremelanotide is a melanocortin agonist that Palatin and King are jointly developing for the treatment of both male and female sexual dysfunction. The primary objective of these two dose-ranging clinical trials is to identify safe and efficacious doses for evaluation in Phase III pivotal trials slated to begin in the first quarter of 2007.
Dr. Trevor Hallam, Executive Vice President, Research and Development of Palatin, stated, "Together with our colleagues at King, we are very pleased to achieve this significant milestone for these two critically important clinical trials. The data from these two studies should allow the companies to develop a robust Phase III pivotal trial program for consideration by the U.S. Food and Drug Administration."
Michael Dell: "During the last 22 years, we have had a pretty remarkable track record of growth in our business. There's no kind of perfect, linear path to success. I do believe that what you'll see is that we have a great business model. We're focused on building a great company over a long period of time."
Dell has been one of the greatest success stories in American business. Their best years are, in my view, yet to come. Management has too much pride to let success slip.
The Treasury stated that productivity rose 3.2% in the first quarter; however, unit labor costs rose 2.5%. Both numbers were higher than predicted. Ian Shepherdson, chief U.S. economist at High Frequency Economics, stated the unit labor cost increas "is much faster than hourly earnings, so it presumably reflects increases in items like stock options, which have boosted costs in the past."
Our gasoline supplies are 5% below year ago levels. Our daily usage has risen slightly.
Medtronic traded at $48.20, a new 52-week low. As you all know, I have owned shares in this company for many decades. During this time it has risen several ten-fold in price. Adding to positions on weakness has been a successful long-term strategy.
Initial jobless claims in the latest week increased by 5,000 to 322,000, the highest level since November. Most analysts predict the economy will have added approximately 200,000 net new jobs in the month of April. The usual suspects will be in construction, healthcare, retail, the financial sector and other service related positions. Will the earnings per hour be less than the inflation rate? Will the hours worked per week increase? How about the overtime hours? I figure all these questions will have results that disappoint.
Cascade Natural Gas has not traded above $21 since the first week of November 2005. It closed at $20.95, and traded at twice its normal daily volume yesterday. I feel confident that a buyout of this company will prove rewarding to shareholders. Meanwhile, on an operational basis the company is making excellent progress.
Yong Li, China’s vice-minister of finance: "I heard rumours that the US dollar might depreciate by 25 per cent.This would have a big impact on countries like China because it would not only affect the value of assets invested in the US."
Copper hit another all-time high. General Motors uses less than 1% of the total global production of new copper per year, and the global OEM automotive industry uses less than 10%. The housing industry is by far the largest end user of copper, around 40%, with electrical and electronic together adding another 35% of the total. If there is a housing slowdown, and there is every indication there is one on the way, I firmly believe the price of copper will decline sharply and I would suggest you consider eliminating all copper stocks from your portfolio.
There was much excitement when crude declined below $70 and gasoline dropped 5%. I saw the same type of excitement at the $60 level. Nothing goes up in a straight line, and nothing goes down in a straight line. Although oil and gasoline are terribly important for each American, I think it would be wise to focus more on the dollar. The dollar index is flirting with the 85 level, and that is down from 91 at the beginning of the year. In other words, in dollar terms, the value of equities has declined 6.6% for foreign investors since the beginning of the year. Thus, rises in the Dow and the S&P 500 in 2006 have produced no gains for a foreigner. In addition, there is absolutely no reason for the dollar to have a sustained rally. That occurred in 2005 while the Fed was busy raising rates, and now they are looking to pause. Meanwhile, the 10-year and the 30-year treasury bonds have their highest rates in four years, and, in my view, they are low in relation to our trade deficit, current account deficit, and budget deficit. They are low when viewing rising costs for Medicare and Medicaid and Social Security. Our country is in trouble. The Fed cannot reflate its way out of deficits and the government will not cut expenditures. The cost for Iraq and Afghanistan accumulate daily. The talking heads on TV discuss earnings above expectations. How much is due to inflation and price increases. How much is due to cutting long time employees from the payroll and replacing them with inexperienced workers? If earnings are so great, then why do so many companies underperform on the revenue side?
Palatin Technologies, Inc. and King Pharmaceuticals, Inc. announced today that the companies have completed enrollment in two Phase IIb clinical trials of bremelanotide in patients with erectile dysfunction (ED). Bremelanotide is a melanocortin agonist that Palatin and King are jointly developing for the treatment of both male and female sexual dysfunction. The primary objective of these two dose-ranging clinical trials is to identify safe and efficacious doses for evaluation in Phase III pivotal trials slated to begin in the first quarter of 2007.
Dr. Trevor Hallam, Executive Vice President, Research and Development of Palatin, stated, "Together with our colleagues at King, we are very pleased to achieve this significant milestone for these two critically important clinical trials. The data from these two studies should allow the companies to develop a robust Phase III pivotal trial program for consideration by the U.S. Food and Drug Administration."
Michael Dell: "During the last 22 years, we have had a pretty remarkable track record of growth in our business. There's no kind of perfect, linear path to success. I do believe that what you'll see is that we have a great business model. We're focused on building a great company over a long period of time."
Dell has been one of the greatest success stories in American business. Their best years are, in my view, yet to come. Management has too much pride to let success slip.
The Treasury stated that productivity rose 3.2% in the first quarter; however, unit labor costs rose 2.5%. Both numbers were higher than predicted. Ian Shepherdson, chief U.S. economist at High Frequency Economics, stated the unit labor cost increas "is much faster than hourly earnings, so it presumably reflects increases in items like stock options, which have boosted costs in the past."
Our gasoline supplies are 5% below year ago levels. Our daily usage has risen slightly.
Medtronic traded at $48.20, a new 52-week low. As you all know, I have owned shares in this company for many decades. During this time it has risen several ten-fold in price. Adding to positions on weakness has been a successful long-term strategy.
Initial jobless claims in the latest week increased by 5,000 to 322,000, the highest level since November. Most analysts predict the economy will have added approximately 200,000 net new jobs in the month of April. The usual suspects will be in construction, healthcare, retail, the financial sector and other service related positions. Will the earnings per hour be less than the inflation rate? Will the hours worked per week increase? How about the overtime hours? I figure all these questions will have results that disappoint.
Cascade Natural Gas has not traded above $21 since the first week of November 2005. It closed at $20.95, and traded at twice its normal daily volume yesterday. I feel confident that a buyout of this company will prove rewarding to shareholders. Meanwhile, on an operational basis the company is making excellent progress.
Yong Li, China’s vice-minister of finance: "I heard rumours that the US dollar might depreciate by 25 per cent.This would have a big impact on countries like China because it would not only affect the value of assets invested in the US."
Copper hit another all-time high. General Motors uses less than 1% of the total global production of new copper per year, and the global OEM automotive industry uses less than 10%. The housing industry is by far the largest end user of copper, around 40%, with electrical and electronic together adding another 35% of the total. If there is a housing slowdown, and there is every indication there is one on the way, I firmly believe the price of copper will decline sharply and I would suggest you consider eliminating all copper stocks from your portfolio.
Wednesday, May 03, 2006
Minor Relief
5/4/06 Minor Relief
The Energy Department said motor gasoline inventories rose 2.1 million barrels for the week ended April 28 to total 202.7 million. It was the first climb in the fuel's supply in nine weeks after losing a total of 25.3 million barrels in eight weeks. They are still 4.8% below the year-ago level, the government data showed. Crude stocks rose 1.7 million barrels to total 346.7 million barrels -- 5.3% above the year-ago level. Distillate supplies fell 1.1 million barrels to 114.5 million. They're 9.6% above the year-ago level.
Brad DeLong: "The current-account deficit is equal to the trade deficit plus the cost of servicing the net international asset position: the net rent, interest, and dividends owed to foreigners who have invested their capital in the US. As time passes, deficits accumulate. As deficits accumulate, the cost of servicing the net international asset position grows. Thus, in order to keep the current-account deficit stable, the trade deficit must shrink. And the only way for the trade deficit to shrink substantially is for net imports to fall, which requires either a relatively sharp decline in the value of the dollar, thereby raising import prices, or a depression in the US." Brad states that the chance of a soft landing for the dollar lessens every day.
The ISM nonmanufacturing index rose to 63.0% from 60.5% in March.index to slip to 59.6%. New orders rose to 64.6. The employment index rose to 56.5% from 54.6%. Inflation pressures increased. The price index soared to 70.5% from 60.5% in the previous month. These unexpected strong numbers caused the treasury bond yields to rise with the 10-year jumping to 5.16%.
During the trading day, Dow Transports rose to an all-time high.
John Hussman: "At present, it makes sense to walk away from exposure to broad stock market fluctuations, for reasons including valuation, persistent distribution, internal dispersion, hostile interest rate pressures, inflation and other trends."
The Postal Service has indicated the price of a stamp will rise from 39 cents to 42 cents. In addition, they are discussing introducing a forever stamp where the rate will not change.
New orders for U.S.-made factory goods increased 4.2% in March, led by strong demand for airplanes, machinery, electronics and petroleum, the Commerce Department reported Wednesday. It was the largest gain in factory orders in 10 months and follows a revised 0.4% gain in February.
Barry Ritholtz: "The advance decline line has not confirmed recent Dow highs; the NYSE A/D line topped out in March. Meanwhile, mutual fund cash levels are down to low levels. And, we are about to enter the seasonally weakest period of the year. We have been positioned as “uncomfortably” bullish these past few months -- our view remains first half rally, second half trouble -- and we note that these elements mean risk is rising. We strongly urge increased caution."
After rising quickly in the early hours to almost $580, gold retreated close to the $570 level. In addiiton, the energy data generated a pullback in crude to the $72+ level.
Ed Easterling: "The current state of volatility is an indicator of a potentially sharp stock market decline based upon (i) the currently low level of volatility, (ii) the tendency for upward spikes to follow extreme low volatility, (iii) the relationship of market direction to volatility trends, and (iv) the propensity for downside volatility during secular bear markets. Volatility could decline further and could remain low for some time longer; however, based upon history, it has not stayed low without subsequently spiking and, as it goes lower, the likelihood of a spike increases significantly."
12,000 GM workers have reportedly signed up for the buyout since the automaker began offering them in April. The new deadline for taking the buyout is June 23, with workers having an additional seven days to change their minds and rescind the buyout.The buyout packages range from a lump-sum payment of $35,000 to coax hourly workers with 30 years' seniority to retire to a lump sum of $140,000 for workers with more than 10 years' seniority but less than 27 years who are willing to give up rights to post-retirement health care and other benefits.
Andersons said it expects 2006 earnings of $3.40 to $3.80 a share.
I would like to close by discussing Microsoft once again. The shares sold down on 200+ million shares to a new low of $23.19, a level last seen in 2003. One can analyze this company from many standpoints. Its return on equity is absolutely outstanding and its free cash flow is outstanding. At the same time the shares are selling at 5+ times sales with a 1.5% yield and minimal earnings growth over the horizon. Yet the stock has a p/e ratio of about 18. There are some contrarians who will be sold on this story; however, one needs to focus on management ability with the company facing increasing competition. I think this is the rub.
Charles Tremper: "The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning."
The Energy Department said motor gasoline inventories rose 2.1 million barrels for the week ended April 28 to total 202.7 million. It was the first climb in the fuel's supply in nine weeks after losing a total of 25.3 million barrels in eight weeks. They are still 4.8% below the year-ago level, the government data showed. Crude stocks rose 1.7 million barrels to total 346.7 million barrels -- 5.3% above the year-ago level. Distillate supplies fell 1.1 million barrels to 114.5 million. They're 9.6% above the year-ago level.
Brad DeLong: "The current-account deficit is equal to the trade deficit plus the cost of servicing the net international asset position: the net rent, interest, and dividends owed to foreigners who have invested their capital in the US. As time passes, deficits accumulate. As deficits accumulate, the cost of servicing the net international asset position grows. Thus, in order to keep the current-account deficit stable, the trade deficit must shrink. And the only way for the trade deficit to shrink substantially is for net imports to fall, which requires either a relatively sharp decline in the value of the dollar, thereby raising import prices, or a depression in the US." Brad states that the chance of a soft landing for the dollar lessens every day.
The ISM nonmanufacturing index rose to 63.0% from 60.5% in March.index to slip to 59.6%. New orders rose to 64.6. The employment index rose to 56.5% from 54.6%. Inflation pressures increased. The price index soared to 70.5% from 60.5% in the previous month. These unexpected strong numbers caused the treasury bond yields to rise with the 10-year jumping to 5.16%.
During the trading day, Dow Transports rose to an all-time high.
John Hussman: "At present, it makes sense to walk away from exposure to broad stock market fluctuations, for reasons including valuation, persistent distribution, internal dispersion, hostile interest rate pressures, inflation and other trends."
The Postal Service has indicated the price of a stamp will rise from 39 cents to 42 cents. In addition, they are discussing introducing a forever stamp where the rate will not change.
New orders for U.S.-made factory goods increased 4.2% in March, led by strong demand for airplanes, machinery, electronics and petroleum, the Commerce Department reported Wednesday. It was the largest gain in factory orders in 10 months and follows a revised 0.4% gain in February.
Barry Ritholtz: "The advance decline line has not confirmed recent Dow highs; the NYSE A/D line topped out in March. Meanwhile, mutual fund cash levels are down to low levels. And, we are about to enter the seasonally weakest period of the year. We have been positioned as “uncomfortably” bullish these past few months -- our view remains first half rally, second half trouble -- and we note that these elements mean risk is rising. We strongly urge increased caution."
After rising quickly in the early hours to almost $580, gold retreated close to the $570 level. In addiiton, the energy data generated a pullback in crude to the $72+ level.
Ed Easterling: "The current state of volatility is an indicator of a potentially sharp stock market decline based upon (i) the currently low level of volatility, (ii) the tendency for upward spikes to follow extreme low volatility, (iii) the relationship of market direction to volatility trends, and (iv) the propensity for downside volatility during secular bear markets. Volatility could decline further and could remain low for some time longer; however, based upon history, it has not stayed low without subsequently spiking and, as it goes lower, the likelihood of a spike increases significantly."
12,000 GM workers have reportedly signed up for the buyout since the automaker began offering them in April. The new deadline for taking the buyout is June 23, with workers having an additional seven days to change their minds and rescind the buyout.The buyout packages range from a lump-sum payment of $35,000 to coax hourly workers with 30 years' seniority to retire to a lump sum of $140,000 for workers with more than 10 years' seniority but less than 27 years who are willing to give up rights to post-retirement health care and other benefits.
Andersons said it expects 2006 earnings of $3.40 to $3.80 a share.
I would like to close by discussing Microsoft once again. The shares sold down on 200+ million shares to a new low of $23.19, a level last seen in 2003. One can analyze this company from many standpoints. Its return on equity is absolutely outstanding and its free cash flow is outstanding. At the same time the shares are selling at 5+ times sales with a 1.5% yield and minimal earnings growth over the horizon. Yet the stock has a p/e ratio of about 18. There are some contrarians who will be sold on this story; however, one needs to focus on management ability with the company facing increasing competition. I think this is the rub.
Charles Tremper: "The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning."
Tuesday, May 02, 2006
Good To Know
5/3/06 Good To Know
Another terrific article on Palatin's PT 141. This one in the UK Observer. This is the link: http://www.guardian.co.uk/medicine/story/0,,1759113,00.html The dollar hit a 7-month low against the yen and an 11-month low versus the euro. Don't try to bottom fish. The dollar is not a flounder. It is floundering and will continue, in my view, to do so. I believe the bottom could be 20,000 leagues under the sea.
Planned corporate layoffs declined by 8.1% in April to 59,688, the lowest level in a year, according to a monthly survey of job-reduction announcements released Tuesday by Challenger Gray & Christmas,.
Total job reductions so far in 2006 have amounted to 315,566, down 8.5% in the year to date, the outplacement firm said.
March pending home sales declined 1.2%.
Bolivia moved to nationalize the nation's hydrocarbon resources. Bolivian Minister of Mines and Metallurgy emphasized that "the mining policy does not contemplate nationalization and even less incorporation of private companies such as San Cristobal." Apex Silver is developing its 100%-owned San Cristobal silver-zinc-leadproject in southwestern Bolivia. The project is expected to commence production in the third quarter 2007. Apex Silver stock got hit hard due to nationalization worries.
Chrysler's sales declined 8% and Ford's dropped 6.6%. GM's April sales were 7% lower but the company sees production of 502,000 vehicles in Europe in the second quarter, up 12,000 units from last month's outlook. For the Asia Pacific region, GM now sees production of 504,000 vehicles, up 30,000 units from the previous outlook.
Gold is climbing closer to $670. Crude has topped $74 again. The price of gas in San Francisco took another spike and is approaching $3.50 a gallon.
Steve Spurrier: "If people like you too much, it's probably because they're beating you."
This month Swaptree.com will unveil the beta version of its service, which barters direct trades between two or more entities for no fee. Revenues will come from ads.
More research is being focused on myelin, a fatty coating that protects nerve cells. People will MS lack myelin.
Microsoft broke below $24 to a new 52-week low. The complex testing that still needs to be carried out on the next version of Windows means the Vista operating system is likely to be hit by further delays before it finally goes on sale next year, Gartner, the technology research firm, said on Tuesday.
Adobe Systems Inc. said late Tuesday its results for the quarter ending June 2 will be "toward the low end" of its prior forecasts.
Reserve Bank of Australia Governor Ian Macfarlane and his board today raised the overnight cash rate target for the first time in 14 months to 5.75 percent, the highest in more than five years.
The parent company of Ameriquest Mortgage Co. and Town & Country Credit said Tuesday it will close 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.
Dow Jones Industrial Average rose to a six-year high and the S&P 500 Index to its best level in more than five years.
Buddha: "Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything simply because it is found written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it."
Another terrific article on Palatin's PT 141. This one in the UK Observer. This is the link: http://www.guardian.co.uk/medicine/story/0,,1759113,00.html The dollar hit a 7-month low against the yen and an 11-month low versus the euro. Don't try to bottom fish. The dollar is not a flounder. It is floundering and will continue, in my view, to do so. I believe the bottom could be 20,000 leagues under the sea.
Planned corporate layoffs declined by 8.1% in April to 59,688, the lowest level in a year, according to a monthly survey of job-reduction announcements released Tuesday by Challenger Gray & Christmas,.
Total job reductions so far in 2006 have amounted to 315,566, down 8.5% in the year to date, the outplacement firm said.
March pending home sales declined 1.2%.
Bolivia moved to nationalize the nation's hydrocarbon resources. Bolivian Minister of Mines and Metallurgy emphasized that "the mining policy does not contemplate nationalization and even less incorporation of private companies such as San Cristobal." Apex Silver is developing its 100%-owned San Cristobal silver-zinc-leadproject in southwestern Bolivia. The project is expected to commence production in the third quarter 2007. Apex Silver stock got hit hard due to nationalization worries.
Chrysler's sales declined 8% and Ford's dropped 6.6%. GM's April sales were 7% lower but the company sees production of 502,000 vehicles in Europe in the second quarter, up 12,000 units from last month's outlook. For the Asia Pacific region, GM now sees production of 504,000 vehicles, up 30,000 units from the previous outlook.
Gold is climbing closer to $670. Crude has topped $74 again. The price of gas in San Francisco took another spike and is approaching $3.50 a gallon.
Steve Spurrier: "If people like you too much, it's probably because they're beating you."
This month Swaptree.com will unveil the beta version of its service, which barters direct trades between two or more entities for no fee. Revenues will come from ads.
More research is being focused on myelin, a fatty coating that protects nerve cells. People will MS lack myelin.
Microsoft broke below $24 to a new 52-week low. The complex testing that still needs to be carried out on the next version of Windows means the Vista operating system is likely to be hit by further delays before it finally goes on sale next year, Gartner, the technology research firm, said on Tuesday.
Adobe Systems Inc. said late Tuesday its results for the quarter ending June 2 will be "toward the low end" of its prior forecasts.
Reserve Bank of Australia Governor Ian Macfarlane and his board today raised the overnight cash rate target for the first time in 14 months to 5.75 percent, the highest in more than five years.
The parent company of Ameriquest Mortgage Co. and Town & Country Credit said Tuesday it will close 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.
Dow Jones Industrial Average rose to a six-year high and the S&P 500 Index to its best level in more than five years.
Buddha: "Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything simply because it is found written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it."
Monday, May 01, 2006
A Close Look
5/2/06 A Close LookIf you take a step back and look unemotionally at the bond, equity, commodity, and currency markets, it will become clear that equities may very well have the greatest potential for a freefall since 2000. Let's examine where we are positioned. The dollar index is at its lowest point since May 2005. The yield on 10-year Treasury bonds at 5.14% and the 30-year at 5.23% are at their highest level in 4 years. In sum, yields are rising but the dollar is falling. In the background, gold has hit a 25-year high at $660, while silver and platinum have also reached multi-year highs. Copper and zinc recently traded at all-time highs. Crude holds above $73 a barrel and gasoline has topped $3 a gallon at the pump. It is not surprising that Phelps Dodge, Goldcorp, Schlumberger, and Arch Coal are standout performers. However, the VIX remains not far from its recent low point and that reflects complacency on the past of investors. It's easy to see why. The major averages are showing above average gains for the year-to-date. That is further reflected in low premiums for out-of-the-money put options on even highly volatile stocks like Apple and Rambus. What will change this complacency? Sharp losses like theone suffered by the Microsoft surprise and some unexpected bad news. Will it be the two tier dollar I recently described as a possibility? I believe geo-political wars will be fought on economic turf rather than with guns and bombs. (That is not to minimize the seriousness of the Iraqi situation.) I have written about Robert McHugh's frequent Hindenburg Omens in the month of April. It would be foolish to ignore them. We have a consumer-based economy. The lates figures reflect, once again, that spending is rising faster than wages. Government spending is rising faster than receipts. Our exports are rising but much slower than our imports. The disparity between those on Main Street and the top 2% of income earners is widening. Real inflation (not the BS government numbers) continues to exceed wages and benefits. The cost of haealthcare, education, and energy make it all but impossible for those on Main Street to meet their current expenses without incurring additional debt. The argument is that, with high home prices, home equity comfortably covers debt obligations. However, I am referring to day-to-day cash flow and not home equity loans. Today it is not so easy to sell a dwelling. There is plenty of inventory on the market. Since Nov 1, 2005, I-Bonds, tied to inflation, have been paying 6.73%. The rate for the next 6 months is 2.41%. That is legalized theft. Since when is the inflation rate 2.41%? Teddy Roosevelt: "We can have no "50-50" allegiance in this country. Either a man is an American and nothing else, or he is not an American at all." Freddie Mac said rates on 30-year, fixed-rate mortgages averaged 6.58% this week, up from 6.53% last week. The new rate was the highest since 30-mortgages stood at 6.63% the week of June 20, 2002. Schlumberger made a new 52-week high and Ford made a new 52-week low. Hovnanian, a homebuilder, statedlvj fiscal 2006 earnings will be in the range of $7.20 a share to $7.40 a share, down from a previous target of $8.05 a share to $8.40 a share. Ara Hovnanian, chief executive Hovnanian, said the company cut estimates because of "continuing production delays in several markets that have postponed deliveries, a slower recent sales pace, higher cancellation rates, more pronounced use of concessions and incentives, and material price increases.While we experienced a 22% increase in the dollar value of net contracts in our first quarter compared to the prior year, when we release results for our 2006 second quarter on May 31st, we expect to report approximately a 20% decline in net contracts. As discussed above, one factor that has negatively influenced our recent pace of net contracts isthe sequential increase in our cancellation rates over the past two quarters," commented Mr. Hovnanian. "Typically our second quarter cancellation rates are lower than those of our first quarter, which was not the case this year. While the number of net contracts recorded in our second quarter increased compared to our first quarter net contract results, market conditions have slowed in certain markets and we did not experience as strong a second quarter sales season as we have traditionally seen. We believe the higher cancellation rates, in addition to an increase in resale listings and increased use of sales incentives in certain markets are temporary aberrations as certain markets work through the increased level of resale homes for sale. However, we remain encouraged that supported by job creation and household formation the long-term fundamentals of housing remain solid. As the housing market has continued to cool off from white-hot levels of previous years, we have renegotiated and even walked away from deposits on several parcels of land that we control through options. Approximately$5 million of write-offs of deposits and related costs is built into our revised second quarter guidance. Although we have not needed to use this tactic as much in recent years, we have employed it successfully in prior slowdowns. We are confident that our strategy to control land predominantly with options will allow us to better manage our inventories in a slowing housing market," Mr. Hovnanian continued. "Fortunately, contract backlog asof March 31, 2006, including unconsolidated joint ventures, was 13,898 homes with a sales value of $4.9 billion. Based on this, approximately 82% of our projected deliveries for fiscal 2006 have either been delivered or are in backlog," concluded Mr. Hovnanian. Teddy Roosevelt: "Every immigrant who comes here should be required within five years to learn English or leave the country." Goldman Sachs Group Inc. dropped Google from its list of favored technology stocks, replacing it with Cisco Systems Inc.
A Close Look
5/2/06 A Close Look
If you take a step back and look unemotionally at the bond, equity, commodity, and currency markets, it will become clear that equities may very well have the greatest potential for a freefall since1999- 2000. Let's examine where we are positioned. The dollar index is at its lowest point since May 2005. The yield on 10-year Treasury bonds at 5.14% and the 30-year at 5.23% are at their highest level in 4 years. In sum, yields are rising but the dollar is falling. In the background, gold has hit a 25-year high at $660, while silver and platinum have also reached multi-year highs. Copper and zinc recently traded at all-time highs. Crude holds above $73 a barrel and gasoline has topped $3 a gallon at the pump. It is not surprising that Phelps Dodge, Goldcorp, Schlumberger, and Arch Coal are standout performers. However, the VIX remains not far from its recent low point and that reflects complacency on the past of investors. It's easy to see why. The major averages are showing above average gains for the year-to-date. That is further reflected in low premiums for out-of-the-money put options on even highly volatile stocks like Apple and Rambus.
What will change this complacency? Sharp losses like theone suffered by the Microsoft surprise and some unexpected bad news. Will it be the two tier dollar I recently described as a possibility? I believe geo-political wars will be fought on economic turf rather than with guns and bombs. (That is not to minimize the seriousness of the Iraqi situation.)
I have written about Robert McHugh's frequent Hindenburg Omens in the month of April. It would be foolish to ignore them.
We have a consumer-based economy. The lates figures reflect, once again, that spending is rising faster than wages. Government spending is rising faster than receipts. Our exports are rising but much slower than our imports. The disparity between those on Main Street and the top 2% of income earners is widening. Real inflation (not the BS government numbers) continues to exceed wages and benefits. The cost of haealthcare, education, and energy make it all but impossible for those on Main Street to meet their current expenses without incurring additional debt. The argument is that, with high home prices, home equity comfortably covers debt obligations. However, I am referring to day-to-day cash flow and not home equity loans. Today it is not so easy to sell a dwelling. There is plenty of inventory on the market.
Since Nov 1, 2005, I-Bonds, tied to inflation, have been paying 6.73%. The rate for the next 6 months is 2.41%. That is legalized theft. Since when is the inflation rate 2.41%?
Teddy Roosevelt: "We can have no "50-50" allegiance in this country. Either a man is an American and nothing else, or he is not an American at all."
Freddie Mac said rates on 30-year, fixed-rate mortgages averaged 6.58% this week, up from 6.53% last week. The new rate was the highest since 30-mortgages stood at 6.63% the week of June 20, 2002.
Schlumberger made a new 52-week high and Ford made a new 52-week low.
Hovnanian, a homebuilder, statedlvj fiscal 2006 earnings will be in the range of $7.20 a share to $7.40 a share, down from a previous target of $8.05 a share to $8.40 a share. Ara Hovnanian, chief executive Hovnanian, said the company cut estimates because of "continuing production delays in several markets that have postponed deliveries, a slower recent sales pace, higher cancellation rates, more pronounced use of concessions and incentives, and material price increases.While we experienced a 22% increase in the dollar value of net contracts in our first quarter compared to the prior year, when we release results for our 2006 second quarter on May 31st, we expect to report approximately a 20% decline in net contracts. As discussed above, one factor that has negatively influenced our recent pace of net contracts isthe sequential increase in our cancellation rates over the past two quarters," commented Mr. Hovnanian. "Typically our second quarter cancellation rates are lower than those of our first quarter, which was not the case this year."
Teddy Roosevelt: "Every immigrant who comes here should be required within five years to learn English or leave the country."
Goldman Sachs Group Inc. dropped Google from its list of favored technology stocks, replacing it with Cisco Systems Inc.
If you take a step back and look unemotionally at the bond, equity, commodity, and currency markets, it will become clear that equities may very well have the greatest potential for a freefall since1999- 2000. Let's examine where we are positioned. The dollar index is at its lowest point since May 2005. The yield on 10-year Treasury bonds at 5.14% and the 30-year at 5.23% are at their highest level in 4 years. In sum, yields are rising but the dollar is falling. In the background, gold has hit a 25-year high at $660, while silver and platinum have also reached multi-year highs. Copper and zinc recently traded at all-time highs. Crude holds above $73 a barrel and gasoline has topped $3 a gallon at the pump. It is not surprising that Phelps Dodge, Goldcorp, Schlumberger, and Arch Coal are standout performers. However, the VIX remains not far from its recent low point and that reflects complacency on the past of investors. It's easy to see why. The major averages are showing above average gains for the year-to-date. That is further reflected in low premiums for out-of-the-money put options on even highly volatile stocks like Apple and Rambus.
What will change this complacency? Sharp losses like theone suffered by the Microsoft surprise and some unexpected bad news. Will it be the two tier dollar I recently described as a possibility? I believe geo-political wars will be fought on economic turf rather than with guns and bombs. (That is not to minimize the seriousness of the Iraqi situation.)
I have written about Robert McHugh's frequent Hindenburg Omens in the month of April. It would be foolish to ignore them.
We have a consumer-based economy. The lates figures reflect, once again, that spending is rising faster than wages. Government spending is rising faster than receipts. Our exports are rising but much slower than our imports. The disparity between those on Main Street and the top 2% of income earners is widening. Real inflation (not the BS government numbers) continues to exceed wages and benefits. The cost of haealthcare, education, and energy make it all but impossible for those on Main Street to meet their current expenses without incurring additional debt. The argument is that, with high home prices, home equity comfortably covers debt obligations. However, I am referring to day-to-day cash flow and not home equity loans. Today it is not so easy to sell a dwelling. There is plenty of inventory on the market.
Since Nov 1, 2005, I-Bonds, tied to inflation, have been paying 6.73%. The rate for the next 6 months is 2.41%. That is legalized theft. Since when is the inflation rate 2.41%?
Teddy Roosevelt: "We can have no "50-50" allegiance in this country. Either a man is an American and nothing else, or he is not an American at all."
Freddie Mac said rates on 30-year, fixed-rate mortgages averaged 6.58% this week, up from 6.53% last week. The new rate was the highest since 30-mortgages stood at 6.63% the week of June 20, 2002.
Schlumberger made a new 52-week high and Ford made a new 52-week low.
Hovnanian, a homebuilder, statedlvj fiscal 2006 earnings will be in the range of $7.20 a share to $7.40 a share, down from a previous target of $8.05 a share to $8.40 a share. Ara Hovnanian, chief executive Hovnanian, said the company cut estimates because of "continuing production delays in several markets that have postponed deliveries, a slower recent sales pace, higher cancellation rates, more pronounced use of concessions and incentives, and material price increases.While we experienced a 22% increase in the dollar value of net contracts in our first quarter compared to the prior year, when we release results for our 2006 second quarter on May 31st, we expect to report approximately a 20% decline in net contracts. As discussed above, one factor that has negatively influenced our recent pace of net contracts isthe sequential increase in our cancellation rates over the past two quarters," commented Mr. Hovnanian. "Typically our second quarter cancellation rates are lower than those of our first quarter, which was not the case this year."
Teddy Roosevelt: "Every immigrant who comes here should be required within five years to learn English or leave the country."
Goldman Sachs Group Inc. dropped Google from its list of favored technology stocks, replacing it with Cisco Systems Inc.
Sunday, April 30, 2006
Almost Secret
5/1/06 Almost Secret
According to an article in today's Financial Times, the federal government keeps two sets of books, but the Bush administration only wants you to see one of them. There is the highly publicised "President's Budget" issued by the Office of Management and Budget, and the almost-secret "Financial Report of the United States" issued by the Department of Treasury. The budget says that the 2005 US fiscal deficit was $319bn, but the Financial Report claims it is $760bn.
Gas is 65 cents a gallon in Saudi Arabia. Saudi King Abdullah issued a decree Sunday lowering domestic gasoline prices by about 25 percent.
The decrease will reach 30 percent by year's end, according to a government statement.In the U.S. gas now exceeds $3 a gallon.
On Friday, natural gas slid to $6.55. With the warm weather about to take hold, one might consider getting one's feet wet here again. The large inventory supply can vanish quickly in a heat wave. Everyone is focused on the price of crude. The sleeper may be natural gas. It has no friends in the trading pits.
According to an article in today's Financial Times, the federal government keeps two sets of books, but the Bush administration only wants you to see one of them. There is the highly publicised "President's Budget" issued by the Office of Management and Budget, and the almost-secret "Financial Report of the United States" issued by the Department of Treasury. The budget says that the 2005 US fiscal deficit was $319bn, but the Financial Report claims it is $760bn.
Gas is 65 cents a gallon in Saudi Arabia. Saudi King Abdullah issued a decree Sunday lowering domestic gasoline prices by about 25 percent.
The decrease will reach 30 percent by year's end, according to a government statement.In the U.S. gas now exceeds $3 a gallon.
On Friday, natural gas slid to $6.55. With the warm weather about to take hold, one might consider getting one's feet wet here again. The large inventory supply can vanish quickly in a heat wave. Everyone is focused on the price of crude. The sleeper may be natural gas. It has no friends in the trading pits.
A Two Tier Dollar
4/30/06 A Two Tier DollarWal-Mart's April same -store sales rose 6.8% withEaster in April this year.
Robert McHugh: "We are approaching an historical tophere."
Mike Burk: "Risk is high. The condition of theindicators is consistent with a market top."
With a record current account deficit and a spiraling budget deficit, could a two tier dollar be around the corner? A dollar could be worth $1 in purchasing power within our borders but possibly only 75 cents or less outside our country.
Robert McHugh: "We are approaching an historical tophere."
Mike Burk: "Risk is high. The condition of theindicators is consistent with a market top."
With a record current account deficit and a spiraling budget deficit, could a two tier dollar be around the corner? A dollar could be worth $1 in purchasing power within our borders but possibly only 75 cents or less outside our country.
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