1/25/03 The Stock Market Headlines
Do you really believe the stock market is falling because investors fear a protracted war with Iraq or a possible nuclear confrontation with N. Korea? I mentioned weeks ago that I do not believe we will go to war with Iraq and that the problems with N. Korea would be settled thru discussions. If I am wrong about Iraq and there is a war, it will be short-lived. Helping to rebuild the Iraq infrastructure will take some time. From the market's standpoint Iraq and N. Korea are non-events. They are being used as headline diversions. The real story is the economy has entered a downward spiral and is picking up speed, and the consumer, business, and the government can't stop it. Time has run out.
How did we reach this point? It's pretty simple. We squandered our cash flow surpluses, overspent, didn't save, created excess capacity in just about every area, and then failed to see foreign competition wiping out pricing power. We are left with excess capacity, almost no pricing power, on-going surpluses of goods and services, too little demand, too much debt, and too little cash flow. The crack in the armor can clearly be witnessed in the falling dollar, which has dropped for 9 consecutive days to a 3 year low vs the Euro and a 4 year low vs the Swiss franc. The dollar's drop is picking up speed and reflects the weakening economic status of the U.S.
Over the lifespan of this 3 year bear market about $7 trillion has been lost. For a $10 trillion economy that's a major hit. Before this bear market ends, trillions more will be lost. It's a painful process, and only the strong-willed shall bounce back. The tough times have only just begun in earnest. You can listen to all the state of the union messages you want. You can salute the flag. All that talk and all that devotion to country will not solve our problems and will not return us to positive cash flow. A perfect example is the Pension Benefit Guaranty Corp, which was founded in 1974. It insures pensions of 44 million Americans, and in recent years had an $8 billion surplus. Because of numerous bankruptcies, that surplus has turned into a $1-2 billion deficit. Companies only pay $19 per person covered each year, or more if a pension fund is underfunded. I have pointed out how many companies have underfunded pension funds. Given the aforementioned information, do you believe guaranteed retirement benefits are at risk? I do.
The FTSE is at a 7 year low.
The IMF oks a $3 billion loan for Argentina.
Home Depot hit a 5 year low.
Congratulations to Serena and Venus Williams for putting on the best women's tennis match ever. They both are remarkable winners. We could use more like them.
Just a final word. Let me be very clear. I am an incredible optimist and not a doomsdayer. On the other hand, it would be stupid for me to put my head in the sand. Some of you were annoyed that I called for a long bear market in June, 2000. Maybe some of today's blog rubs you the wrong way. That's not my problem. I call it the way I see it- without emotion. It's just business for me.
Friday, January 24, 2003
1/24/03 Litigation Will Not Halt The Competition
A few months ago I wrote about China eating Cisco's lunch in the low-cost networking router business. I mentioned that life would never be the same for Cisco. Yesterday Cisco sued Huawei Technologies claiming the latter had copied intellectual property in their manufacturing of the low-cost routers. The lawsuit will not stop the competition. The marketplace wants lower prices, and Cisco hasn't provided them. We have seen Dell come to dominate in the PC and laptop area. We witness the growth of Linux in the low-cost server market. China is not a looming force. They are a force now and growing every day. Cisco has reason to be concerned. Their days of leadership are waning. Their pricing power is dead in the water.
Gold reached a 6 year high of $367.
AT&T's stock plunged over 20% after a disappointing 2003 forecast.
The FTSE closed down for the 9th consecutive day, and had the lowest close since 1995. UK's economy only grew 1.7% last year, the slowest since 1992.
The U.S. will give the inspectors more time to inspect.
The unemployment rate in N.Y.C. is 8.4%, the highest since 1998.
Bush's proposal on Medicare will link drug benefits to joining HMOs.
Bell South's quarterly profits fell 25%.
Caterpillar said their 2003 earnings would drop 5%.
McDonald's reported their first ever loss, and announced the closing of 719 restaurants worldwide.
As we move towards next week, we can look forward to the report from the UN inspectors on Iraq and then the President's state of the union message. Both reports will probably hold few surprises. The market, on the other hand, is full of surprises. Often I have said that the market accomodates the fewest number of people at any one time. To be one of the few means being prepared and willing to be extraordinarily nimble. Just like life throws us curves, so does the market. The curves can be wicked- more lethal than Barry Zito's breaking pitch. You will often miss a pitch, but when the count gets full, that's the time to get on base. We don't need homers. We just need to score to ring the register. Be consistent and come to play hard each day.
A few months ago I wrote about China eating Cisco's lunch in the low-cost networking router business. I mentioned that life would never be the same for Cisco. Yesterday Cisco sued Huawei Technologies claiming the latter had copied intellectual property in their manufacturing of the low-cost routers. The lawsuit will not stop the competition. The marketplace wants lower prices, and Cisco hasn't provided them. We have seen Dell come to dominate in the PC and laptop area. We witness the growth of Linux in the low-cost server market. China is not a looming force. They are a force now and growing every day. Cisco has reason to be concerned. Their days of leadership are waning. Their pricing power is dead in the water.
Gold reached a 6 year high of $367.
AT&T's stock plunged over 20% after a disappointing 2003 forecast.
The FTSE closed down for the 9th consecutive day, and had the lowest close since 1995. UK's economy only grew 1.7% last year, the slowest since 1992.
The U.S. will give the inspectors more time to inspect.
The unemployment rate in N.Y.C. is 8.4%, the highest since 1998.
Bush's proposal on Medicare will link drug benefits to joining HMOs.
Bell South's quarterly profits fell 25%.
Caterpillar said their 2003 earnings would drop 5%.
McDonald's reported their first ever loss, and announced the closing of 719 restaurants worldwide.
As we move towards next week, we can look forward to the report from the UN inspectors on Iraq and then the President's state of the union message. Both reports will probably hold few surprises. The market, on the other hand, is full of surprises. Often I have said that the market accomodates the fewest number of people at any one time. To be one of the few means being prepared and willing to be extraordinarily nimble. Just like life throws us curves, so does the market. The curves can be wicked- more lethal than Barry Zito's breaking pitch. You will often miss a pitch, but when the count gets full, that's the time to get on base. We don't need homers. We just need to score to ring the register. Be consistent and come to play hard each day.
Thursday, January 23, 2003
1/23/03 The Dow And The S&P 500 Close Below The Dec. 31, 2002 Levels
With the exception of a small gain for the Nasdaq, all the January market advancements have evaporated. As discussed often in this blog, the handwriting has been on the wall. The lonely road often has greater visibility while it can get pretty murky in a crowd. The consumer has been telling a story. About half of the consumers feel Bush's stimulus package will not prove of much benefit; the majority are negative on the current economic conditions; and overall consumer sentiment is at a 9 year low. With the consumer accounting for at least two thirds of our GDP, it is obvious that profit growth will not be forthcoming. Since the stock market follows profit growth or the lack of it, we remain in a bear market. Rallies take place frequently in bear markets, and they are opportunities to sell. These facts are for everyone to see, and not just for me. I may have more direct investing experience, but the rules are the same for me as they are for you. We need to concentrate intensely on the facts, and to think rationally on a consistent basis. Independent and dedicated thinking can prove intellectually and monetarily rewarding. It's available to all of us. It's a matter of how badly you want to succeed.
Once again, Kodak has announced layoffs. This time it is 3% of the workforce.
While the FTSE continues to decline, the Nikkei is starting to surprise on the upside. Will it be sustainable? It hasn't been up to this point.
Nokia is forecasting lower first quarter sales. They are the industry leader, and that should tell you something. Remember WalMart slowing in August and the collapse in overall holiday sales for the retail industry.
Non- performing bank loans continue to rise, and they are at a record level.
With the exception of a small gain for the Nasdaq, all the January market advancements have evaporated. As discussed often in this blog, the handwriting has been on the wall. The lonely road often has greater visibility while it can get pretty murky in a crowd. The consumer has been telling a story. About half of the consumers feel Bush's stimulus package will not prove of much benefit; the majority are negative on the current economic conditions; and overall consumer sentiment is at a 9 year low. With the consumer accounting for at least two thirds of our GDP, it is obvious that profit growth will not be forthcoming. Since the stock market follows profit growth or the lack of it, we remain in a bear market. Rallies take place frequently in bear markets, and they are opportunities to sell. These facts are for everyone to see, and not just for me. I may have more direct investing experience, but the rules are the same for me as they are for you. We need to concentrate intensely on the facts, and to think rationally on a consistent basis. Independent and dedicated thinking can prove intellectually and monetarily rewarding. It's available to all of us. It's a matter of how badly you want to succeed.
Once again, Kodak has announced layoffs. This time it is 3% of the workforce.
While the FTSE continues to decline, the Nikkei is starting to surprise on the upside. Will it be sustainable? It hasn't been up to this point.
Nokia is forecasting lower first quarter sales. They are the industry leader, and that should tell you something. Remember WalMart slowing in August and the collapse in overall holiday sales for the retail industry.
Non- performing bank loans continue to rise, and they are at a record level.
Wednesday, January 22, 2003
1/22/03 Humility And The Stock Market
Several times I have written that one cannot expect to buy at the low and sell at the top. In fact, should that occur in a particular stock, it should be considered luck and not brains. To be a successful investor one should expect to be humbled on a regular basis. My readers have commented that often I come across as brash, opinionated, and full of myself. I think I probably am all of those descriptions at one time or another; however, beneath the surface, I have a tremendous respect for the marketplace. I know I may be right 99 consecutive times, but on the 100th I will look really stupid. The market might attempt to take my big head off. That should be looked as a positive. We must learn from our mistakes, not make the same mistake twice, and cut our losses short. It is very costly to be stubborn in the face of a losing trade. Don't take it personally. No one is out to get you. Only you can do yourself in. You make the ultimate decision to buy, sell, or hold. No one else. Depend on your own rational thinking, and do not fall in love with a stock. It's only a piece of corporate ownership and not a heart and soul.
$130 billion went into bond funds in 2002. $10 billion came out of stock funds last year, and it was the first year of withdrawals since 1988. $5.5 billion were withdrawn in December.
Kodak has lowered its outlook.
Lucent recorded its 11th straight quarterly loss. That takes a concerted effort to pull off.
Hispanics are now the number one minority in the U.S., and will become the majority in Phoenix in 2007.
Insurance premiums from Blue Cross Blue Shield of Michigan will rise 23% in March.
Bush's budget will be released in the next few weeks, and it will not give the states added assistance to pay for Medicaid health insurance for the poor. Most states have cut Medicaid coverage because increased enrollment and rising healthcare costs have made the program unaffordable.
Microsoft to buy web-conferencing firm, PlaceWare of Mountain View.
Among companies in Georgia with revenues of $10 million or more, 25% are likely to move some manufacturing operations out of the U.S.
Due to the drought, water shortages can be expected in coming months in Montana, Colorado, and Utah, and possibly in Arizona and Nevada. In addition, lack of moisture in the midwest has created low supplies of grain.
Several times I have written that one cannot expect to buy at the low and sell at the top. In fact, should that occur in a particular stock, it should be considered luck and not brains. To be a successful investor one should expect to be humbled on a regular basis. My readers have commented that often I come across as brash, opinionated, and full of myself. I think I probably am all of those descriptions at one time or another; however, beneath the surface, I have a tremendous respect for the marketplace. I know I may be right 99 consecutive times, but on the 100th I will look really stupid. The market might attempt to take my big head off. That should be looked as a positive. We must learn from our mistakes, not make the same mistake twice, and cut our losses short. It is very costly to be stubborn in the face of a losing trade. Don't take it personally. No one is out to get you. Only you can do yourself in. You make the ultimate decision to buy, sell, or hold. No one else. Depend on your own rational thinking, and do not fall in love with a stock. It's only a piece of corporate ownership and not a heart and soul.
$130 billion went into bond funds in 2002. $10 billion came out of stock funds last year, and it was the first year of withdrawals since 1988. $5.5 billion were withdrawn in December.
Kodak has lowered its outlook.
Lucent recorded its 11th straight quarterly loss. That takes a concerted effort to pull off.
Hispanics are now the number one minority in the U.S., and will become the majority in Phoenix in 2007.
Insurance premiums from Blue Cross Blue Shield of Michigan will rise 23% in March.
Bush's budget will be released in the next few weeks, and it will not give the states added assistance to pay for Medicaid health insurance for the poor. Most states have cut Medicaid coverage because increased enrollment and rising healthcare costs have made the program unaffordable.
Microsoft to buy web-conferencing firm, PlaceWare of Mountain View.
Among companies in Georgia with revenues of $10 million or more, 25% are likely to move some manufacturing operations out of the U.S.
Due to the drought, water shortages can be expected in coming months in Montana, Colorado, and Utah, and possibly in Arizona and Nevada. In addition, lack of moisture in the midwest has created low supplies of grain.
Tuesday, January 21, 2003
1/21/03 Business Overcapacity And Unemployment
Kurt Barnard, president of Barnard's Retail Consulting Group: "there is really no government policy that will do much good in dealing with business overcapacity."
A year ago there were 1 million people who had been unemployed 26 weeks or longer. Now there are 1 3/4 million. Replacement jobs are increasingly difficult to find. We have Ph.Ds walking into career centers.
Ed Peters, chief investment officer of PanAgora Investment Fund in Boston: "we overinvested not only in technology but also in people and created more jobs than we actually needed."
Most states require a balanced budget. Governors are reluctantly turning to tax increases to offset deficits. An example is Idaho Governor Kempthorne. In his first term he cut taxes 48 times. Now faced with a 10% budget gap he is calling for an increase in state cigarette and sales taxes. He said "I have done something that is absolutely not part of my fiber but I'm not going to dismantle this state."
More IT jobs headed overseas. In 2000 only 27,000 jobs were outsourced. Now we're on the way to 100,000.
Unemployment taxes are going up. Why? More people are drawing unemployment benefits and they're on those benefits for a long period of time. As one manager put it, it's like auto insurance- the more car accidents you have, the higher the rates are going to be.
With the euro rising against the dollar, there is more pressure on European earnings. Philip Chitty, a senior European economist at ABN Amro Bank, figures "that a 10% depreciation of the dollar against the euro will lower projected 2003 euro-area growth by 0.6 percentage point to 0.8%."
Here is a statement which reflects the Fed's clear thinking. It comes from Federal Reserve Bank of Richmond President Alfred Broaddus: "For the first time in a while I think the chances that actual growth will exceed the consensus forecast somewhat are about equal to the chances that it will come in below it." Doesn't it give you a warm fuzzy feeling knowing that Broaddus is employed and that you have a hand in paying his salary?
Kurt Barnard, president of Barnard's Retail Consulting Group: "there is really no government policy that will do much good in dealing with business overcapacity."
A year ago there were 1 million people who had been unemployed 26 weeks or longer. Now there are 1 3/4 million. Replacement jobs are increasingly difficult to find. We have Ph.Ds walking into career centers.
Ed Peters, chief investment officer of PanAgora Investment Fund in Boston: "we overinvested not only in technology but also in people and created more jobs than we actually needed."
Most states require a balanced budget. Governors are reluctantly turning to tax increases to offset deficits. An example is Idaho Governor Kempthorne. In his first term he cut taxes 48 times. Now faced with a 10% budget gap he is calling for an increase in state cigarette and sales taxes. He said "I have done something that is absolutely not part of my fiber but I'm not going to dismantle this state."
More IT jobs headed overseas. In 2000 only 27,000 jobs were outsourced. Now we're on the way to 100,000.
Unemployment taxes are going up. Why? More people are drawing unemployment benefits and they're on those benefits for a long period of time. As one manager put it, it's like auto insurance- the more car accidents you have, the higher the rates are going to be.
With the euro rising against the dollar, there is more pressure on European earnings. Philip Chitty, a senior European economist at ABN Amro Bank, figures "that a 10% depreciation of the dollar against the euro will lower projected 2003 euro-area growth by 0.6 percentage point to 0.8%."
Here is a statement which reflects the Fed's clear thinking. It comes from Federal Reserve Bank of Richmond President Alfred Broaddus: "For the first time in a while I think the chances that actual growth will exceed the consensus forecast somewhat are about equal to the chances that it will come in below it." Doesn't it give you a warm fuzzy feeling knowing that Broaddus is employed and that you have a hand in paying his salary?
Monday, January 20, 2003
1/20/03 We Shall Overcome, Someday
Why doesn't someone write a book entitled race relations for dummies. The author could give a signed copy to the staff at Bob Jones University. Didn't Bush campaign in South Carolina at that university? So much for discrimination at the college entrance level.
The consumer expectations index, which gauges attitudes about the 12-month outlook, fell to 75.2 from 80.8. That should tell you where retail sales are headed- in the toilet.
The Venezuelan oil strike is in its 50th day. Income from oil exports accounts for 50% of the Venezuelan government's income.
New Mexico is choking on Medicaid costs. They're not alone.
Sellers outpaced buyers in 2002 insider trading. Wouldn't you be a seller too if your company's results were disappointing and getting worse? You don't have to run a company to be a seller.
The euro hit a 3 1/2 year high vs sterling.
You want to get depressed on your vacation day? Independent research company Datamonitor reports, that its study revealed, more than one in five depressed patients attempt suicide and a further 47% think about killing themselves before their condition is diagnosed. The stigma of depression has stopped patients from seeking therapy. This is truly a tragic trend.
Why doesn't someone write a book entitled race relations for dummies. The author could give a signed copy to the staff at Bob Jones University. Didn't Bush campaign in South Carolina at that university? So much for discrimination at the college entrance level.
The consumer expectations index, which gauges attitudes about the 12-month outlook, fell to 75.2 from 80.8. That should tell you where retail sales are headed- in the toilet.
The Venezuelan oil strike is in its 50th day. Income from oil exports accounts for 50% of the Venezuelan government's income.
New Mexico is choking on Medicaid costs. They're not alone.
Sellers outpaced buyers in 2002 insider trading. Wouldn't you be a seller too if your company's results were disappointing and getting worse? You don't have to run a company to be a seller.
The euro hit a 3 1/2 year high vs sterling.
You want to get depressed on your vacation day? Independent research company Datamonitor reports, that its study revealed, more than one in five depressed patients attempt suicide and a further 47% think about killing themselves before their condition is diagnosed. The stigma of depression has stopped patients from seeking therapy. This is truly a tragic trend.
Sunday, January 19, 2003
1/19/03 Is The Big D On The Doorstep?
Barron's reports that the government, corporations, and households are saddled with $31 trillion of debt. That's an overwhelming amount for a $10 trillion economy. Now you know why I increasingly worry about the big D arriving on our doorstep. It seems to be slowly creeping up on us.
The California state jobless rate is at a 5 year high of 6.6%.
The Mexican peso is at a 4 year low vs the dollar at 10.61 per dollar. Mexico sends 85% of its exports to the U.S.
Federal securities regulators have told Martha Stewart they've decided to file civil insider-trading charges against her.
Barron's reports that the government, corporations, and households are saddled with $31 trillion of debt. That's an overwhelming amount for a $10 trillion economy. Now you know why I increasingly worry about the big D arriving on our doorstep. It seems to be slowly creeping up on us.
The California state jobless rate is at a 5 year high of 6.6%.
The Mexican peso is at a 4 year low vs the dollar at 10.61 per dollar. Mexico sends 85% of its exports to the U.S.
Federal securities regulators have told Martha Stewart they've decided to file civil insider-trading charges against her.
Saturday, January 18, 2003
1/18/03 WalMart and Microsoft
Back in August, WalMart first warned that their same-store sales were slowing down to the 4% level. They stayed there thru November and declined again in December. I wrote about the significance of WalMart's warning, and basically pointed out that, if the best retail company in the world was warning about slowing sales, then how about every other company and particularly their competitors. It wasn't long before we saw the retail carnage, but meanwhile, Wall Street had for the most part ignored WalMart's words. Then, after the close on Thursday, Microsoft's CFO warned of the difficult economic environment and lowered the sales and earnings projections for the company's 2003 fiscal year. Like WalMart, Microsoft is the leader in the industry. If they are slowing down, watch out. This time Wall Street did listen and Microsoft dropped close to $3 per share and the Nasdaq over 3%. The problem is still two-fold. With a slowing environment for Microsoft, the P/E ratios need to come down for the tech stocks, and the earnings projections for the Nasdaq 100 need to be reduced further for 2003. In other words, the result will be lower stock prices. Rallies should be viewed as selling opportunities. Hopefully, you have been listening and lightening up your least favorable positions.
Factory production fell 0.2% in December with usable capacity resting at 75.4%. The U.S. trade gap in November jumped to $40 billion. Most importantly, consumer sentiment in January fell to 83.7 from 86.7 in December. Industrial production in 2002 declined for the second consecutive year, and was the first back to back decline since 1974-1975.
Home Depot to miss earnings targets for 2003.
The American Legislative Council says state deficits for 2003 could reach $90 billion. That sounds low to me.
As people have lost their jobs in the private sector, local governments have hired 429,000, states 115,000, and the Federal government 42,000. Where are they getting the money to pay these people? From taxes you are paying. There is something very wrong with this picture. Only the voters can change it.
Back in August, WalMart first warned that their same-store sales were slowing down to the 4% level. They stayed there thru November and declined again in December. I wrote about the significance of WalMart's warning, and basically pointed out that, if the best retail company in the world was warning about slowing sales, then how about every other company and particularly their competitors. It wasn't long before we saw the retail carnage, but meanwhile, Wall Street had for the most part ignored WalMart's words. Then, after the close on Thursday, Microsoft's CFO warned of the difficult economic environment and lowered the sales and earnings projections for the company's 2003 fiscal year. Like WalMart, Microsoft is the leader in the industry. If they are slowing down, watch out. This time Wall Street did listen and Microsoft dropped close to $3 per share and the Nasdaq over 3%. The problem is still two-fold. With a slowing environment for Microsoft, the P/E ratios need to come down for the tech stocks, and the earnings projections for the Nasdaq 100 need to be reduced further for 2003. In other words, the result will be lower stock prices. Rallies should be viewed as selling opportunities. Hopefully, you have been listening and lightening up your least favorable positions.
Factory production fell 0.2% in December with usable capacity resting at 75.4%. The U.S. trade gap in November jumped to $40 billion. Most importantly, consumer sentiment in January fell to 83.7 from 86.7 in December. Industrial production in 2002 declined for the second consecutive year, and was the first back to back decline since 1974-1975.
Home Depot to miss earnings targets for 2003.
The American Legislative Council says state deficits for 2003 could reach $90 billion. That sounds low to me.
As people have lost their jobs in the private sector, local governments have hired 429,000, states 115,000, and the Federal government 42,000. Where are they getting the money to pay these people? From taxes you are paying. There is something very wrong with this picture. Only the voters can change it.
Thursday, January 16, 2003
1/17/03 Big Deficits Seen For "Foreseeable Future"
The President's budget director said that federal deficits are expected to balloon to the $200-300 billion range in the next two years, and spoke of shortfalls "for the foreseeable future" and declined to predict when surpluses might surface. In July it was estimated a surplus would appear in 2005.
Last summer the administration projected deficits of $109 billion in 2003 and $48 billion in 2004. As one can see, they really have no clue whatsoever and are just picking numbers out of an embarrassing place. When you include the trade deficit and the off-balance sheet items for social security and the like, the deficit becomes an unruly percentage of our $10 trillion economy. You will hear the administration say the deficit is only 2-3% of GDP. That's pure BS.
The chief economist for Morgan Stanley said the U.S. needs a sizeable short-term stimulus to prevent deflation.
Goldman Sachs said it believes this year's deficit will hit $300 billion and increase to $375 billion in 2004.
As long as we continue to run large deficits, the dollar will stay weak.
Federated Dep't Stores cut its 2003 forecast, shut 11 stores, and fired 1500 workers.
Microsoft guided consensus for their 2003 year to $1.90-1.93 from the prior $1.98.
Pfizer lost its Neurontin patent case.
The recent spate of layoffs is taking its toll. At 8am the wait to speak to ADP about a payroll matter was 1 1/4 hours. There were only 7 calls in front of me. Obviously there are only a couple of people manning the phones. Then a call to Costco's business center brought a 15 minute wait, and the central warehouse was out of Coca Cola, towels, and toilet paper. The order was given to a competitor. This is the new business look- poor service and low inventory. You can expect lower earnings to spring forth and disenchanted customers.
The President's budget director said that federal deficits are expected to balloon to the $200-300 billion range in the next two years, and spoke of shortfalls "for the foreseeable future" and declined to predict when surpluses might surface. In July it was estimated a surplus would appear in 2005.
Last summer the administration projected deficits of $109 billion in 2003 and $48 billion in 2004. As one can see, they really have no clue whatsoever and are just picking numbers out of an embarrassing place. When you include the trade deficit and the off-balance sheet items for social security and the like, the deficit becomes an unruly percentage of our $10 trillion economy. You will hear the administration say the deficit is only 2-3% of GDP. That's pure BS.
The chief economist for Morgan Stanley said the U.S. needs a sizeable short-term stimulus to prevent deflation.
Goldman Sachs said it believes this year's deficit will hit $300 billion and increase to $375 billion in 2004.
As long as we continue to run large deficits, the dollar will stay weak.
Federated Dep't Stores cut its 2003 forecast, shut 11 stores, and fired 1500 workers.
Microsoft guided consensus for their 2003 year to $1.90-1.93 from the prior $1.98.
Pfizer lost its Neurontin patent case.
The recent spate of layoffs is taking its toll. At 8am the wait to speak to ADP about a payroll matter was 1 1/4 hours. There were only 7 calls in front of me. Obviously there are only a couple of people manning the phones. Then a call to Costco's business center brought a 15 minute wait, and the central warehouse was out of Coca Cola, towels, and toilet paper. The order was given to a competitor. This is the new business look- poor service and low inventory. You can expect lower earnings to spring forth and disenchanted customers.
1/16/03 The Fed Sees a "Subdued and Sluggish" Economy
The latest Fed beige book states that there is no evidence that either consumer or corporate spending is picking up and that business expansion remains minimal. Companies remain cautious about hiring. Consumer confidence is at a yearlong low. These statements are quite different from the comment about the economy hitting a soft patch. The Fed is beginning to see one half of the story. They fail to touch on the possibility of a contracting economy or one marked with deflation. That will come in time. The Fed can be counted on for late arrivals to reality.
There are $2 trillion in taxable money fund assets with an average yield of 0.84%. This tells you how distrusting the public is of the stock market.
Germany's $2 trillion economy only expanded 0.2% in 2002, the slowest in 9 years. Unemployment is at a 4 1/2 year high. For the first time since a unified Germany, consumer spending declined.
The ECB will cut interest rates at their next meeting on Feb. 6th.
According to CIO Insight magazine, a survey of 300 CIOs revealed that tech spending will decline in 2003.
U.S. producer prices were flat in Dec. Prices excluding food and energy costs actually fell 0.3%.
Prime Minister Koizumi visited the Yasukuni Shrine which honors Japan's war dead. There he said "I will visit the shrine to remind me about the priceless significance of peace. The visit will make me more determined to never go to war." Maybe some of our leaders should have joined Koizumi on his Shrine visit.
There are increasing attacks in the Southern no fly zone. On Monday allied planes struck 5 sites in S. Iraq.
Airbus lowered their estimate on airplane deliveries. As I have mentioned so often. Why buy new? Pick one up at firesale prices in the Mojave airplane parking lot.
DuPont warned that 4th quarter earnings would fall short of expectations. Apple reported a loss. ADP disappointed. Best Buy cut 700 jobs. The good news- Rand McNally will come out of bankruptcy with a new owner.
The latest Fed beige book states that there is no evidence that either consumer or corporate spending is picking up and that business expansion remains minimal. Companies remain cautious about hiring. Consumer confidence is at a yearlong low. These statements are quite different from the comment about the economy hitting a soft patch. The Fed is beginning to see one half of the story. They fail to touch on the possibility of a contracting economy or one marked with deflation. That will come in time. The Fed can be counted on for late arrivals to reality.
There are $2 trillion in taxable money fund assets with an average yield of 0.84%. This tells you how distrusting the public is of the stock market.
Germany's $2 trillion economy only expanded 0.2% in 2002, the slowest in 9 years. Unemployment is at a 4 1/2 year high. For the first time since a unified Germany, consumer spending declined.
The ECB will cut interest rates at their next meeting on Feb. 6th.
According to CIO Insight magazine, a survey of 300 CIOs revealed that tech spending will decline in 2003.
U.S. producer prices were flat in Dec. Prices excluding food and energy costs actually fell 0.3%.
Prime Minister Koizumi visited the Yasukuni Shrine which honors Japan's war dead. There he said "I will visit the shrine to remind me about the priceless significance of peace. The visit will make me more determined to never go to war." Maybe some of our leaders should have joined Koizumi on his Shrine visit.
There are increasing attacks in the Southern no fly zone. On Monday allied planes struck 5 sites in S. Iraq.
Airbus lowered their estimate on airplane deliveries. As I have mentioned so often. Why buy new? Pick one up at firesale prices in the Mojave airplane parking lot.
DuPont warned that 4th quarter earnings would fall short of expectations. Apple reported a loss. ADP disappointed. Best Buy cut 700 jobs. The good news- Rand McNally will come out of bankruptcy with a new owner.
Wednesday, January 15, 2003
1/15/03 Management Is The Difference
KMart and WalMart started their businesses at the same time. Yesterday Kmart, fighting to survive, announced the closing of 336 stores and laying off 37,000 workers. WalMart recently announced an aggressive store opening schedule and plans to hire another 800,000 workers over the next 5 years. The companies are in the same business. The main difference is management. It's a winning lesson. When investing, go with the proven talent. Ignore the media hype. Stick with the results.
Georgia Pacific warns its 4th quarter earnings will be disappointing. They have been hurt by "competitive market conditions and higher manufacturing costs." They failed to mention their overladen debt structure.
The analysts raved last night about Intel's 4th quarter. Get real. The stock sells at $18 with a 2003 EPS possibility of 60 cents or 30 times earnings. This is an excellent company, no longer run by Andy Grove, in a cyclical industry and there is no way their historical or present performance comes close to a 30% growth rate. Capital spending will drop about $1 billion this year to $3.7 billion, and this reflects uncertain market conditions going forward.
In December the Pew Global Attitudes opinion survey found increasingly negative views of the U.S. in over two-thirds of the 27 countries it surveyed. Given our recent troop movements, I believe that survey would be even more negative if taken today. We need to proceed cautiously and not just with a few friends. The world is a small place. It's vital to be right. It's more important to be right at the opportune time. We should take note that Germany wants a UN vote before there is a war in Iraq.
John S. Herold Inc. reports 2002 worldwide upstream M&A deal value plunged 44% to $46 billion.
Grocery distributor Fleming Cos. cut its 4th quarter profit estimate and blamed the growing dominance of WalMart. The latter does its own distributing.
The EU paints a bleak economic picture and stated that "the reaction to the slowdown in economic growth is characterized by policy inertia and backtracking."
AllFirst Financial eliminates 1132 jobs.
The dollar falls to 118.00 yen, the Euro up to 1.06 vs the dollar, and the dollar at 1.38 Swiss francs. The dollar is in a bear market.
Talking about bear markets, on occasion opportunities arise for trading rallies. I discussed that possibility 10 days after 9/11 and then again in mid-October of last year. Trading rallies do not change the basic trend. That is a given. In my view the high point for January will turn out to be the high point for 2003. I have no idea when the bear market will end. I just make the trend my friend and act accordingly. Those that fight the trend lose their capital.
December retail sales rose an expected meager 1.2% but were flat when excluding auto sales. I expect a continuation into January and beyond.
There was a new anthrax scare at the Fed's incoming mail center.
Mel Karmazin is in talks to become AOL Time Warner CEO. That would be a plus.
KMart and WalMart started their businesses at the same time. Yesterday Kmart, fighting to survive, announced the closing of 336 stores and laying off 37,000 workers. WalMart recently announced an aggressive store opening schedule and plans to hire another 800,000 workers over the next 5 years. The companies are in the same business. The main difference is management. It's a winning lesson. When investing, go with the proven talent. Ignore the media hype. Stick with the results.
Georgia Pacific warns its 4th quarter earnings will be disappointing. They have been hurt by "competitive market conditions and higher manufacturing costs." They failed to mention their overladen debt structure.
The analysts raved last night about Intel's 4th quarter. Get real. The stock sells at $18 with a 2003 EPS possibility of 60 cents or 30 times earnings. This is an excellent company, no longer run by Andy Grove, in a cyclical industry and there is no way their historical or present performance comes close to a 30% growth rate. Capital spending will drop about $1 billion this year to $3.7 billion, and this reflects uncertain market conditions going forward.
In December the Pew Global Attitudes opinion survey found increasingly negative views of the U.S. in over two-thirds of the 27 countries it surveyed. Given our recent troop movements, I believe that survey would be even more negative if taken today. We need to proceed cautiously and not just with a few friends. The world is a small place. It's vital to be right. It's more important to be right at the opportune time. We should take note that Germany wants a UN vote before there is a war in Iraq.
John S. Herold Inc. reports 2002 worldwide upstream M&A deal value plunged 44% to $46 billion.
Grocery distributor Fleming Cos. cut its 4th quarter profit estimate and blamed the growing dominance of WalMart. The latter does its own distributing.
The EU paints a bleak economic picture and stated that "the reaction to the slowdown in economic growth is characterized by policy inertia and backtracking."
AllFirst Financial eliminates 1132 jobs.
The dollar falls to 118.00 yen, the Euro up to 1.06 vs the dollar, and the dollar at 1.38 Swiss francs. The dollar is in a bear market.
Talking about bear markets, on occasion opportunities arise for trading rallies. I discussed that possibility 10 days after 9/11 and then again in mid-October of last year. Trading rallies do not change the basic trend. That is a given. In my view the high point for January will turn out to be the high point for 2003. I have no idea when the bear market will end. I just make the trend my friend and act accordingly. Those that fight the trend lose their capital.
December retail sales rose an expected meager 1.2% but were flat when excluding auto sales. I expect a continuation into January and beyond.
There was a new anthrax scare at the Fed's incoming mail center.
Mel Karmazin is in talks to become AOL Time Warner CEO. That would be a plus.
Tuesday, January 14, 2003
1/14/03 Payroll Taxes vs Income Taxes
The stimulus package has a cornerstone of weakness- it fails to address that most Americans pay more in payroll taxes than they do in income taxes. This is simply a basic fact. FICA taxes are cut off at $87,000, and therefore, one making more than $87,000 does not have to pay on the rest. When you combine this with a sales tax, you find that rich and poor pay alike. The problem in both examples is simple- whether its FICA or a sales tax, the payments represent a much larger percentage of income for the poor and middle class. This disparity needs to be addressed and corrected. If economists are concerned about slowing consumer spending, then further analysis is required. Keep in mind that I am a capitalist, a libertarian, and against forced taxation. At the same time my head is not in the sand with respect to reality..
In the Silicon Valley it is estimated that more than 45 million feet of commercial real estate sits empty or roughly one-sixth the size of the Valley. Another 20 million feet sit empty in Manhattan.
According to Merrill Lynch, other post-employment benefits(OPEBs)- moslly retiree medical care- for the S&P 500 are underfunded by $317 billion. That does not include the pension shortfalls. For examply, GM has an OPEB liability of $52 billion. In many cases, the liabilities in these two areas dwarf the market capitalizations for an individual company. This is just one more reason that stocks, in general, are significantly overvalued in my view.
Duke Energy cut its 2002 earnings forecast citing a sluggish U.S. economy. More importantly, the company now anticipates a range of earnings for 2003 of $1.35-$1.60 down from $1.84. In October the company had predicted 2003 earnings would be little changed from 2002.
The parent of FAO Schwartz filed for Chapter 11 bankruptcy protection.
Since October 2001, the U.S. has spent $850 million on humanitarian relief operations in Afghanistan.
Spending on prescription drugs for children thru age 19 increased 28% last year. Children account for only 5% of total drug spending in the U.S. but it's growing.
WalMart is considering a cash bid for Safeway,Plc, the British supermarket chain.
Abbott Labs is delaying raises for 6 months for 34,000 U.S. employees.
Pessimism continues to grow concerning joblessness and a potential war. The backdrop for business is fragile, and the stock market's recent strength is nothing but chasing fool's gold. There isn't one person I know or know of that can honestly tell me the names of three stocks that are dirt cheap. When I view the floor of the NYSE and the Nasdaq, I see a lot of dirt.
The stimulus package has a cornerstone of weakness- it fails to address that most Americans pay more in payroll taxes than they do in income taxes. This is simply a basic fact. FICA taxes are cut off at $87,000, and therefore, one making more than $87,000 does not have to pay on the rest. When you combine this with a sales tax, you find that rich and poor pay alike. The problem in both examples is simple- whether its FICA or a sales tax, the payments represent a much larger percentage of income for the poor and middle class. This disparity needs to be addressed and corrected. If economists are concerned about slowing consumer spending, then further analysis is required. Keep in mind that I am a capitalist, a libertarian, and against forced taxation. At the same time my head is not in the sand with respect to reality..
In the Silicon Valley it is estimated that more than 45 million feet of commercial real estate sits empty or roughly one-sixth the size of the Valley. Another 20 million feet sit empty in Manhattan.
According to Merrill Lynch, other post-employment benefits(OPEBs)- moslly retiree medical care- for the S&P 500 are underfunded by $317 billion. That does not include the pension shortfalls. For examply, GM has an OPEB liability of $52 billion. In many cases, the liabilities in these two areas dwarf the market capitalizations for an individual company. This is just one more reason that stocks, in general, are significantly overvalued in my view.
Duke Energy cut its 2002 earnings forecast citing a sluggish U.S. economy. More importantly, the company now anticipates a range of earnings for 2003 of $1.35-$1.60 down from $1.84. In October the company had predicted 2003 earnings would be little changed from 2002.
The parent of FAO Schwartz filed for Chapter 11 bankruptcy protection.
Since October 2001, the U.S. has spent $850 million on humanitarian relief operations in Afghanistan.
Spending on prescription drugs for children thru age 19 increased 28% last year. Children account for only 5% of total drug spending in the U.S. but it's growing.
WalMart is considering a cash bid for Safeway,Plc, the British supermarket chain.
Abbott Labs is delaying raises for 6 months for 34,000 U.S. employees.
Pessimism continues to grow concerning joblessness and a potential war. The backdrop for business is fragile, and the stock market's recent strength is nothing but chasing fool's gold. There isn't one person I know or know of that can honestly tell me the names of three stocks that are dirt cheap. When I view the floor of the NYSE and the Nasdaq, I see a lot of dirt.
Monday, January 13, 2003
1/13/03 Case Finally Closed
Steve Case resigned from AOL Time Warner. Since the merger, the market value for the stockholders has dropped $100 billion. That's more than the GDP for most countries.
Leonard Pitts Jr, The Miami Herald:" Extraordinary times require extraordinary measures, yes. We are all desperate to feel safe again, yes. But that's precisely why we the people need to be more vigilant and more skeptical of our government. We must pay close attention as corners are cut and rights abridged in our names.
Not from lack of patriotism or need to be blindly adversarial. Rather, because the citizenry of a democratic nation is the most important check on the potential excesses of government. And because it's in a time of emergency that excess is most likely.
Do we care? From all appearances, we do not.
Sadly enough, we seem to have made our choice. We choose expedience."
Glaxo said it would stop shipping drugs to Canadian pharmacies and wholesalers that are shipping the drugs to the U.S.
Should you want a fun ride, you might try out the Nissan minivan with the optional zebra-striped leather seats designed by Joan Rivers for the People's Choice Awards.
OPEC to increase oil production quotas by 6.5%.
The 49er offense was shut down by Tampa's machine. The last time SF looked so peaked was during the Enron electricity fiasco.
The real estate bubble has found its way to Kuwait along the Iraqi border. Everyone wants a birdseye view of the troop movements. It's the most activity since Peter O'Toole crossed the sands.
Bill Richardson says Pyongyang is preparing to negotiate. The problem is he speaks a rare dialect.
Four warships left this weekend from Virginia Beach for the Gulf. I just hope they don't have a break-out of the virus hitting the cruise ships.
Californians should consider moving to New Mexico. Psychologists in that state are now allowed to prescribe drugs.
It is anticipated that employee health plan costs will increase by at least 15% in 2003, the biggest jump in a decade. You can expect to pay an ever-increasing share of the premiums, and higher fees for drugs, doctor visits, and hospitalizations. Consider it a tax hike like higher gasoline and heating oil prices. So go figure. What does it take to really stimulate the economy?
During the Super Bowl there will be 61 30-second ad spots, and each will sell for $2 million. That sounds like a good business venture.
Steve Case resigned from AOL Time Warner. Since the merger, the market value for the stockholders has dropped $100 billion. That's more than the GDP for most countries.
Leonard Pitts Jr, The Miami Herald:" Extraordinary times require extraordinary measures, yes. We are all desperate to feel safe again, yes. But that's precisely why we the people need to be more vigilant and more skeptical of our government. We must pay close attention as corners are cut and rights abridged in our names.
Not from lack of patriotism or need to be blindly adversarial. Rather, because the citizenry of a democratic nation is the most important check on the potential excesses of government. And because it's in a time of emergency that excess is most likely.
Do we care? From all appearances, we do not.
Sadly enough, we seem to have made our choice. We choose expedience."
Glaxo said it would stop shipping drugs to Canadian pharmacies and wholesalers that are shipping the drugs to the U.S.
Should you want a fun ride, you might try out the Nissan minivan with the optional zebra-striped leather seats designed by Joan Rivers for the People's Choice Awards.
OPEC to increase oil production quotas by 6.5%.
The 49er offense was shut down by Tampa's machine. The last time SF looked so peaked was during the Enron electricity fiasco.
The real estate bubble has found its way to Kuwait along the Iraqi border. Everyone wants a birdseye view of the troop movements. It's the most activity since Peter O'Toole crossed the sands.
Bill Richardson says Pyongyang is preparing to negotiate. The problem is he speaks a rare dialect.
Four warships left this weekend from Virginia Beach for the Gulf. I just hope they don't have a break-out of the virus hitting the cruise ships.
Californians should consider moving to New Mexico. Psychologists in that state are now allowed to prescribe drugs.
It is anticipated that employee health plan costs will increase by at least 15% in 2003, the biggest jump in a decade. You can expect to pay an ever-increasing share of the premiums, and higher fees for drugs, doctor visits, and hospitalizations. Consider it a tax hike like higher gasoline and heating oil prices. So go figure. What does it take to really stimulate the economy?
During the Super Bowl there will be 61 30-second ad spots, and each will sell for $2 million. That sounds like a good business venture.
Sunday, January 12, 2003
1/12/03 Pension Fund Managers Are Panicked
The corporate pension fund shortfalls are rising. For example, Ford's has risen to $14.5 billion. Rather than decrease their risk exposure, the managers feel pressured to make a 9% return, and believe they must increase their equity positions at the expense of bonds. The problem is not the markets. It's the managers themselves and those entrusted to oversee the pension fund assets. Most are inept and not qualified to manage a portfolio through a bear market- especially when it's OPM.
The U.S. now has 150,000 troops in the Gulf. Another 225,000 and we'll have as many folks as are in Wyoming.
According to a national Knight Ridder poll, Americans are overwhelmingly against a unilateral war in Iraq.
In 2002 a total of 10 million people received unemployment benefits. Unemployment among women has increased as much as it has for men. In recessions this is usually not the case.
Merrill Lynch says the budget deficit may increase to $300 million. I mentioned this a week ago.
Foreigners are shifting from dollar deposit accounts to Euro deposits.
IC equipment vendors are offering discounts up to 40%.
To reiterate, eliminating taxes on dividends will not stimulate the economy in 2003. The assistance comes with the filing of tax returns in April, 2004.
Economists are concerned that continuing job losses will stall the recovery. I'm concerned for economists. We don't have a recovery.
Economists are concerned that the poor holiday season reflects a spending hiatus for the consumer. I'm concerned for economists. They have missed the change in trend. Spending is out and savings is in.
The corporate pension fund shortfalls are rising. For example, Ford's has risen to $14.5 billion. Rather than decrease their risk exposure, the managers feel pressured to make a 9% return, and believe they must increase their equity positions at the expense of bonds. The problem is not the markets. It's the managers themselves and those entrusted to oversee the pension fund assets. Most are inept and not qualified to manage a portfolio through a bear market- especially when it's OPM.
The U.S. now has 150,000 troops in the Gulf. Another 225,000 and we'll have as many folks as are in Wyoming.
According to a national Knight Ridder poll, Americans are overwhelmingly against a unilateral war in Iraq.
In 2002 a total of 10 million people received unemployment benefits. Unemployment among women has increased as much as it has for men. In recessions this is usually not the case.
Merrill Lynch says the budget deficit may increase to $300 million. I mentioned this a week ago.
Foreigners are shifting from dollar deposit accounts to Euro deposits.
IC equipment vendors are offering discounts up to 40%.
To reiterate, eliminating taxes on dividends will not stimulate the economy in 2003. The assistance comes with the filing of tax returns in April, 2004.
Economists are concerned that continuing job losses will stall the recovery. I'm concerned for economists. We don't have a recovery.
Economists are concerned that the poor holiday season reflects a spending hiatus for the consumer. I'm concerned for economists. They have missed the change in trend. Spending is out and savings is in.
Saturday, January 11, 2003
1/11/03 The Bogus Unemployment Rate Part 2
Here we go again. Six months ago I took out all the statistics and proved that the reported unemployment rate was bogus and much higher than reported. I received a good deal of how dare you emails, and in return sent a picture of Pavlov's dog. The following month my number was issued as the correct unemployment rate. Let's make this short and to the point. It's Saturday and the follower pathetics are probably asleep from too much booze. In the past sixty days the jobless number has risen by approximately 200,000. If the unemployment rate was 6% before the increased numbers, it can't remain the same now. It's so simple. The correct unemployment rate is 6.3%. If you think business conditions are improving, then there is little hope for your intelligence level.
The Cheesecake Factory had disappointing results. Maybe they should consider improving their food and lowering their prices. Maybe they should merge with Hooter's and serve cheesecake with cheesecake.
At least 5 GOP senators have voiced concerns over Bush's stimulus package. Bush said the plan would deliver an average tax cut of $1083 to 92 million Americans. The liberal Tax Policy Center said the average cut for middle income tax payers would be $265. Maybe we should ask H&R Block.
In 2002 companies with assets of $375 billion sought bankruptcy protection.
The Mexican Foreign Minister quit and is replaced by a critic of Nafta.
Bloomberg Personal Finance magazine shuts down after the February issue.
JC Penney to lay off 2000 and Delta 4000.
Germany lowers its economic forecast for 2003- again.
VC spending recedes to pre-bubble levels- around the mid-90's trendline.
Ashland Oil to miss 1st quarter 2003 earnings expectations. Ashland will be followed by many others.
Voltaire said "it is dangerous to be right in matters on which the established authorities are wrong." A good deal depends on your acceptance of anyone as an authority.
Here we go again. Six months ago I took out all the statistics and proved that the reported unemployment rate was bogus and much higher than reported. I received a good deal of how dare you emails, and in return sent a picture of Pavlov's dog. The following month my number was issued as the correct unemployment rate. Let's make this short and to the point. It's Saturday and the follower pathetics are probably asleep from too much booze. In the past sixty days the jobless number has risen by approximately 200,000. If the unemployment rate was 6% before the increased numbers, it can't remain the same now. It's so simple. The correct unemployment rate is 6.3%. If you think business conditions are improving, then there is little hope for your intelligence level.
The Cheesecake Factory had disappointing results. Maybe they should consider improving their food and lowering their prices. Maybe they should merge with Hooter's and serve cheesecake with cheesecake.
At least 5 GOP senators have voiced concerns over Bush's stimulus package. Bush said the plan would deliver an average tax cut of $1083 to 92 million Americans. The liberal Tax Policy Center said the average cut for middle income tax payers would be $265. Maybe we should ask H&R Block.
In 2002 companies with assets of $375 billion sought bankruptcy protection.
The Mexican Foreign Minister quit and is replaced by a critic of Nafta.
Bloomberg Personal Finance magazine shuts down after the February issue.
JC Penney to lay off 2000 and Delta 4000.
Germany lowers its economic forecast for 2003- again.
VC spending recedes to pre-bubble levels- around the mid-90's trendline.
Ashland Oil to miss 1st quarter 2003 earnings expectations. Ashland will be followed by many others.
Voltaire said "it is dangerous to be right in matters on which the established authorities are wrong." A good deal depends on your acceptance of anyone as an authority.
Friday, January 10, 2003
1/10/03 December Payrolls Plummet 101,000. Worker Hours Decline Too
The payroll number was the largest drop in 10 months. I promise the real number is worse than that. The gov't will revise the number downward just like November was revised from down 40,000 to down 88,000. The latter is a revision of over 100%. Those are not just mistakes. I have been writing for over one year about this reporting problem. No one in the press appears to be troubled nor does the public. Inaction welcomes incompetence and possible manipulative behavior.
For two months I have written that there would not be a war in Iraq or N. Korea. It's a bit like the stock market. Just think for yourselves and not be forced fed by what Washington wants you to believe. Independent thought based in rationality will get you a long way towards your goals. Follow the leader will get you to your nearest proctologist.
A missing pilot is being held by Iraq. Let's get that pilot back.
GM expects their profit in 2003 to drop by 25%. I think it will be larger than that. Too many vehicles and not enough buyers. The GM pension fund ended 2002 underfunded by $19.3. It's not easy to accomplish this feat.
California's Davis wants to increase taxes by 8.3 billion. He's such a poor excuse for a governor. Then again, gov't employment is the employment of last resort.
There are at least 3 1/2 million Americans drawing a week's unemployment benefits.
Fleet Boston took an $800 million charge for bad loans. I wonder if the loans were to Washington agencies.
Schering Plough issued a profit warning. It should have been expected with Claritin no longer just available via prescription.
The famed Interpreter of the Hopi prophecies crossed the Big Mountain on Black Mesa and explained "the Purifiers are coming! We don't want these weapons made up of the uranium you take from our land. If you take the uranium, the lightning won't come and bring the rains. The uranium attracts the lightning. You have no right to take the lightning from us! Our Prophecies tell of white people. They were once our brothers who went away to the East. They were supposed to come back here with inventions and help us to a better life. They would complete our spiritual circle. Instead they brought the symbol of a cross. The cross is a divider. They want to hang us- on a cross of uranium!"
The payroll number was the largest drop in 10 months. I promise the real number is worse than that. The gov't will revise the number downward just like November was revised from down 40,000 to down 88,000. The latter is a revision of over 100%. Those are not just mistakes. I have been writing for over one year about this reporting problem. No one in the press appears to be troubled nor does the public. Inaction welcomes incompetence and possible manipulative behavior.
For two months I have written that there would not be a war in Iraq or N. Korea. It's a bit like the stock market. Just think for yourselves and not be forced fed by what Washington wants you to believe. Independent thought based in rationality will get you a long way towards your goals. Follow the leader will get you to your nearest proctologist.
A missing pilot is being held by Iraq. Let's get that pilot back.
GM expects their profit in 2003 to drop by 25%. I think it will be larger than that. Too many vehicles and not enough buyers. The GM pension fund ended 2002 underfunded by $19.3. It's not easy to accomplish this feat.
California's Davis wants to increase taxes by 8.3 billion. He's such a poor excuse for a governor. Then again, gov't employment is the employment of last resort.
There are at least 3 1/2 million Americans drawing a week's unemployment benefits.
Fleet Boston took an $800 million charge for bad loans. I wonder if the loans were to Washington agencies.
Schering Plough issued a profit warning. It should have been expected with Claritin no longer just available via prescription.
The famed Interpreter of the Hopi prophecies crossed the Big Mountain on Black Mesa and explained "the Purifiers are coming! We don't want these weapons made up of the uranium you take from our land. If you take the uranium, the lightning won't come and bring the rains. The uranium attracts the lightning. You have no right to take the lightning from us! Our Prophecies tell of white people. They were once our brothers who went away to the East. They were supposed to come back here with inventions and help us to a better life. They would complete our spiritual circle. Instead they brought the symbol of a cross. The cross is a divider. They want to hang us- on a cross of uranium!"
Thursday, January 09, 2003
1/9/03 The Peace Pipe
Noble Red Man, the Lakota chief, said " I've got Red Cloud's peace pipe. I also have Black Bear's pipe. The Peace Pipe is our only weapon. It's our holy power. It's God's power. The Pipe mediates between man and God. To receive the Pipe, to receive God's gift, you've got to be pure in your heart, mind, body, and soul. And never forget, that after the prayers, you've got to live that life, a life with God. That's the hardest part."
Wegman's Food Markets was founded in 1916. They now employ 27,700 workers, and no one has ever been laid off.
In a poll the top two resolutions for the new year were paying off debt and losing weight.
Alcoa really missed the estimates for the 4th quarter, and will lay off 8000 workers.
The dollar sank to its lowest level vs the euro since November 1999. Gold rallied to a new six year high.
Pimco's Bill Gross said that a weaker dollar was key to preventing global deflationary pressures. In my view, he has nothing to worry about. The dollar will stay weak and get weaker.
WalMart's December same store sales rose 2.3%.
AOL to take several billion dollar write-off. Maybe it should be more than that.
Last year, for the first time since 1988, there was an equity outflow from mutual funds- about $25 billion. If the dollar stays weak, that outflow could increase as foreign investors leave our market.
There were only 19 venture-backed IPOs in 2002.
Unemployment in Uruguay hits 20%.
Taiwan's exports exceed its imports by a record $18 billion.
Our healthcare spending is up to $1.5 trillion. We must be either very sick or very health conscious or hypochondriacs or a combination of all three.
In 2002 the world airline industry lost $13 billion and in 2001 $18 billion. Those combined losses exceed the total profits made over the previous 45 years.
Tom Arnold says he's been married in 3 weight categories.
Noble Red Man, the Lakota chief, said " I've got Red Cloud's peace pipe. I also have Black Bear's pipe. The Peace Pipe is our only weapon. It's our holy power. It's God's power. The Pipe mediates between man and God. To receive the Pipe, to receive God's gift, you've got to be pure in your heart, mind, body, and soul. And never forget, that after the prayers, you've got to live that life, a life with God. That's the hardest part."
Wegman's Food Markets was founded in 1916. They now employ 27,700 workers, and no one has ever been laid off.
In a poll the top two resolutions for the new year were paying off debt and losing weight.
Alcoa really missed the estimates for the 4th quarter, and will lay off 8000 workers.
The dollar sank to its lowest level vs the euro since November 1999. Gold rallied to a new six year high.
Pimco's Bill Gross said that a weaker dollar was key to preventing global deflationary pressures. In my view, he has nothing to worry about. The dollar will stay weak and get weaker.
WalMart's December same store sales rose 2.3%.
AOL to take several billion dollar write-off. Maybe it should be more than that.
Last year, for the first time since 1988, there was an equity outflow from mutual funds- about $25 billion. If the dollar stays weak, that outflow could increase as foreign investors leave our market.
There were only 19 venture-backed IPOs in 2002.
Unemployment in Uruguay hits 20%.
Taiwan's exports exceed its imports by a record $18 billion.
Our healthcare spending is up to $1.5 trillion. We must be either very sick or very health conscious or hypochondriacs or a combination of all three.
In 2002 the world airline industry lost $13 billion and in 2001 $18 billion. Those combined losses exceed the total profits made over the previous 45 years.
Tom Arnold says he's been married in 3 weight categories.
Wednesday, January 08, 2003
1/8/03 Poverty And Stimulus Plans
As my readers know, my mantra is something Chief Justice Marshall said 167 years ago- "the power to tax is the power to destroy." I have been writing for years urging the elimination of all taxes on dividends- not because it will be a great stimulus but because it's not right to tax anything twice. The fact is only 1/5 of U.S. households hold stocks outside of individual retirement plans. Under this Bush plan a typical family of four with both parents working to earn $39,000 in yearly income get $1100 in tax relief. The top individual tax rate drops to 35% from the current 38.6%. This is a joke. Families will still be working the first four months of every year just to pay taxes. This is criminal. This is bondage. Where do these taxes go? If we investigated Enron and the like with great scrutiny, let's look behind the budget numbers and look at receipts at every agency. If we want to talk real, a household income of $18,100 or less for a family of four is considered the poverty level and translates into 1 out of every 8 people, 1 out of every 10 families, and 1 out of every 6 children. Somewhere along the line the American people need to get control of their own money. We do not need to have the government control our money. Control will be the death of democracy.
John Challenger, CEO Challenger, Gray, and Christmas: "we see no evidence of a significant increase in job creation in 2003."
There are 2 million farmers and ranchers in the U.S. and 50% are severely impacted by this country's drought which has created tremendous financial loss and the small surrounding towns are also impacted.
Cigna laying off 3000+ workers.
I wrote on Jan 1 about GE and the potential union trouble. Their largest union announced going out on strike on Jan 14. Good for them. It's about time workers took a stand on healthcare costs. No one else comes to their assistance.
WalMart to offer basic discount financial services for U.S. customers. Eventually, this will change the financial services industry.
Intel sees little improvement in tech spending in the next 6 months.
The largest short position exists in the dollar since 1999.
Here is the problem with the market-valuation. EMC came out with better numbers than expected and the eps for 2003 was raised to 12 cents. With the stock at 7 1/2 it's already at 60 times earnings. I'd rather go to a 99 cents only store for a bargain.
Treasury bond prices had their worst early January since 1982- thanks to the stimulus package and all the debt supply which will result.
Factory orders continue to drop.
U.S. home loans in foreclosure at a record level.
Romance takes another hit. Tiffany's holiday sales were worst than expected.
Before I sign off, let me say that the Bush stimulus plan is presented in good faith. Unfortunately, it will not stimulate the results now. If you want to stimulate the economy, send out a check for $1000 to every American 18 and over. That should amount to about $200 billion. To offset that expenditure eliminate a like amount in fat from the budget. Start with the bloated congressional staffs.
As my readers know, my mantra is something Chief Justice Marshall said 167 years ago- "the power to tax is the power to destroy." I have been writing for years urging the elimination of all taxes on dividends- not because it will be a great stimulus but because it's not right to tax anything twice. The fact is only 1/5 of U.S. households hold stocks outside of individual retirement plans. Under this Bush plan a typical family of four with both parents working to earn $39,000 in yearly income get $1100 in tax relief. The top individual tax rate drops to 35% from the current 38.6%. This is a joke. Families will still be working the first four months of every year just to pay taxes. This is criminal. This is bondage. Where do these taxes go? If we investigated Enron and the like with great scrutiny, let's look behind the budget numbers and look at receipts at every agency. If we want to talk real, a household income of $18,100 or less for a family of four is considered the poverty level and translates into 1 out of every 8 people, 1 out of every 10 families, and 1 out of every 6 children. Somewhere along the line the American people need to get control of their own money. We do not need to have the government control our money. Control will be the death of democracy.
John Challenger, CEO Challenger, Gray, and Christmas: "we see no evidence of a significant increase in job creation in 2003."
There are 2 million farmers and ranchers in the U.S. and 50% are severely impacted by this country's drought which has created tremendous financial loss and the small surrounding towns are also impacted.
Cigna laying off 3000+ workers.
I wrote on Jan 1 about GE and the potential union trouble. Their largest union announced going out on strike on Jan 14. Good for them. It's about time workers took a stand on healthcare costs. No one else comes to their assistance.
WalMart to offer basic discount financial services for U.S. customers. Eventually, this will change the financial services industry.
Intel sees little improvement in tech spending in the next 6 months.
The largest short position exists in the dollar since 1999.
Here is the problem with the market-valuation. EMC came out with better numbers than expected and the eps for 2003 was raised to 12 cents. With the stock at 7 1/2 it's already at 60 times earnings. I'd rather go to a 99 cents only store for a bargain.
Treasury bond prices had their worst early January since 1982- thanks to the stimulus package and all the debt supply which will result.
Factory orders continue to drop.
U.S. home loans in foreclosure at a record level.
Romance takes another hit. Tiffany's holiday sales were worst than expected.
Before I sign off, let me say that the Bush stimulus plan is presented in good faith. Unfortunately, it will not stimulate the results now. If you want to stimulate the economy, send out a check for $1000 to every American 18 and over. That should amount to about $200 billion. To offset that expenditure eliminate a like amount in fat from the budget. Start with the bloated congressional staffs.
Tuesday, January 07, 2003
[1/7/2003 3:49:57 AM | michael buchsbaum]
1/7/03 Got Water?
As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's second biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.
Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.
AT&T and GM to cut jobs.
Romance takes a hit. 1-800-Flowers delivers a profit warning.
Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.
As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.
This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.
1/7/03 Got Water?
As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's second biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.
Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.
AT&T and GM to cut jobs.
Romance takes a hit. 1-800-Flowers delivers a profit warning.
Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.
As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.
This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.
1/7/03 Got Water?
As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.
Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.
AT&T and GM to cut jobs.
Romance takes a hit. 1-800-Flowers delivers a profit warning.
Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.
As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.
This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.
As some of my readers might recall, about 15 years ago I was the largest stockholder in the East's biggest water company. I have been interested in water for quite some time. The Colorado River is the main water source for much of Arizona, Southern California, and southern Nevada. Millions of people eat vegetables grown with this water. Timothy Brick, a member of the Metropolitan Water District of Southern California, said "it's really one of the most massive pollution problems the water industry has ever seen." He is referring to the hazardous chemical perchlorate. The cleanup is estimated to take decades. The 20 million people who drink this water don't have decades.
Soaring property taxes and skyrocketing building insurance rates slam co-op and condo owners in N.Y.C. with monthly maintenance increaes of up to 20%.
AT&T and GM to cut jobs.
Romance takes a hit. 1-800-Flowers delivers a profit warning.
Forrester Research forecasts that the N.Y.C. metroplitan area is in danger of losing at least 300,000 service jobs over time- IT, back-office, customer service, and sales operations- to India, Russia, China, Vietnam, Uruguay, and the Philippines. In total, Forrester estimates that 3.3 million U.S. service-industry jobs and $136 billion in wages will move offshore. It would take 300,000 jobs to fill 6 World Trade Centers.
As the population continues to age, a major fear is outliving one's money. That alone is a reason for the savings rate to increase and for consumer spending to be on the decline for years to come. This trend cannot be bucked.
This is the fourth time that the different market sectors have rallied to current levels. Each time I have advised lightening up on holdings which don't meet your needs and expectations. There may not be another opportunity like this for some time to come.
Monday, January 06, 2003
1/6/03 Got Dirt
Sigmund Freud: "Money is brought into the most intimate relationship with dirt."
Dr. Elisabeth Engelberg from the Stockholm Center for Economic Psychology: "For women, money makes possible a state of equality. Conversely, men value money as an expression of power."
Mohandas Gandhi: "Happines is when you think, what you say, and what you do are in harmony."
Mel Gibson from Payback: "If I had been a little dumber, I would have joined the force myself."
California accounts for one-seventh of our country's GDP. High Tech rents in the Silicon Valley dropped 30% in 2002.
Gold at a 6 year high, oil at a 2 year high, and the dollar at a 3 year low against the pound.
The new dep't of homeland security brings together 22 different agencies in an effort to prevent terrorism. There is at least one major flaw- none of the merging agencies owns a computer system that can speak to the others, and there is no funding to make this happen. So much for "connecting the dots". The homeland security law is about 500 pages! Who's on first?
The majority of Americans are stockholders- thru pension plans, IRAs, and 410Ks, and therefore, do not receive dividends directly and don't benefit from the proposed dividend tax cut.
Pres. Bush to push for the extension of unemployment benefits, an increase in the child care tax credit, and a quicker phase out of the marriage penalty for two-income couples. Will the proposed package be too late to overcome unemployment, anemic wage growth, and dreary consumer confidence?
Sigmund Freud: "Money is brought into the most intimate relationship with dirt."
Dr. Elisabeth Engelberg from the Stockholm Center for Economic Psychology: "For women, money makes possible a state of equality. Conversely, men value money as an expression of power."
Mohandas Gandhi: "Happines is when you think, what you say, and what you do are in harmony."
Mel Gibson from Payback: "If I had been a little dumber, I would have joined the force myself."
California accounts for one-seventh of our country's GDP. High Tech rents in the Silicon Valley dropped 30% in 2002.
Gold at a 6 year high, oil at a 2 year high, and the dollar at a 3 year low against the pound.
The new dep't of homeland security brings together 22 different agencies in an effort to prevent terrorism. There is at least one major flaw- none of the merging agencies owns a computer system that can speak to the others, and there is no funding to make this happen. So much for "connecting the dots". The homeland security law is about 500 pages! Who's on first?
The majority of Americans are stockholders- thru pension plans, IRAs, and 410Ks, and therefore, do not receive dividends directly and don't benefit from the proposed dividend tax cut.
Pres. Bush to push for the extension of unemployment benefits, an increase in the child care tax credit, and a quicker phase out of the marriage penalty for two-income couples. Will the proposed package be too late to overcome unemployment, anemic wage growth, and dreary consumer confidence?
Sunday, January 05, 2003
1/5/03 Got Milk
Having run a Fortune 500 agricultural processing company for many years, I think I have enough knowledge and experience to comment on the milk industry. It's pretty basic. Milk prices are so low that dairy farmers aren't making money. They are trying to hang on and stay in business. The problem begins with the federal government setting the price for milk. Farmers are unable to pass along increased costs for gasoline or other items to the consumer.
For every 100 pounds there are about 12 gallons of milk. A year ago the price was $17 per 100 pounds and now approximates $10.85. The federal floor price is $10.10, and that is the price at which the government buybacks begin. The supply of milk in this country exceeds demand. The U.S. government has more than a year's supply of dried milk in storage.
In November in Maine, dairy farmers dumped 10,000 gallons of milk in protest of low prices. They want a minimum contract level of $15 per 100 pounds or about $1.10 per gallon. This weekend Safeway had milk ads running at $1.69 per gallon.
I would be very interested to see what part of the new stimulus package helps our farmers. No group works longer hours, takes more risks, and receives less for their efforts.
Craig Columbus, president of Thomas Wealth Management, and probably the leading expert on insider buying and selling, said "insider buying is just anemic-there's been a buyer's strike." If insiders are unwilling to buy stock in their own companies, doesn't it tell you that current trading levels are too high?
Having run a Fortune 500 agricultural processing company for many years, I think I have enough knowledge and experience to comment on the milk industry. It's pretty basic. Milk prices are so low that dairy farmers aren't making money. They are trying to hang on and stay in business. The problem begins with the federal government setting the price for milk. Farmers are unable to pass along increased costs for gasoline or other items to the consumer.
For every 100 pounds there are about 12 gallons of milk. A year ago the price was $17 per 100 pounds and now approximates $10.85. The federal floor price is $10.10, and that is the price at which the government buybacks begin. The supply of milk in this country exceeds demand. The U.S. government has more than a year's supply of dried milk in storage.
In November in Maine, dairy farmers dumped 10,000 gallons of milk in protest of low prices. They want a minimum contract level of $15 per 100 pounds or about $1.10 per gallon. This weekend Safeway had milk ads running at $1.69 per gallon.
I would be very interested to see what part of the new stimulus package helps our farmers. No group works longer hours, takes more risks, and receives less for their efforts.
Craig Columbus, president of Thomas Wealth Management, and probably the leading expert on insider buying and selling, said "insider buying is just anemic-there's been a buyer's strike." If insiders are unwilling to buy stock in their own companies, doesn't it tell you that current trading levels are too high?
Saturday, January 04, 2003
1/04/03 Jose Jesus Jimenez
He's not a comedian. His full name is Capt Jose Jesus Jimenez. On December 4 he dropped anchor on his Venezuelan oil tanker and has not budged since. He is running short of food and water, and continues to defie President Chavez. If he stays on board, he will die. The strike is in its 34th day. He remains committed: "in six months there won't be a Venezuela. We'll all be broken, in civil war and bathed in blood." He maybe very right.
According to the Bond Buyer, states and municipalities sold $356 billion of bonds in 2002 and that's a record. States and local governments are bathed in deficits.
The Labor Department(I use that description loosely) will cease issuing reports which track the number of U.S. companies laying off 50 or more workers at a time. The reason given: the report does not generate jobs. I guess the spinmeisters have been bathed in too much daily bad news.
The hamburger war is upon us. The Whopper is on sale until Jan. 20 for 99 cents. Maybe we should use our national defense resources and liberate the hamburger rather than Iraq.
96% of all individual funds ended 2002 with losses. Gold funds did the best. As I said in June 2000, we'll see how good the so-called professionals really are at making money.
Congress reconvenes Tuesday. The President presents his "stimulus package" (I just love to be stimulated) the same day. The Democrats will push for an extension of unemployment benefits. That's comforting and caring since Congress managed to give themselves a pay raise before recessing. I always thought performance counted. No wonder the world over wants to live here. You can do nothing and get a raise.
Airbus recorded contracts for 309 planes in 2002 and Boeing only 231. As I've said before, Boeing's management is a figment of their own imagination.
Hollywood box office receipts were up 11% in 2002. Were the movies more entertaining and/or was it an escape from depressing times bathed in low consumer confidence?
He's not a comedian. His full name is Capt Jose Jesus Jimenez. On December 4 he dropped anchor on his Venezuelan oil tanker and has not budged since. He is running short of food and water, and continues to defie President Chavez. If he stays on board, he will die. The strike is in its 34th day. He remains committed: "in six months there won't be a Venezuela. We'll all be broken, in civil war and bathed in blood." He maybe very right.
According to the Bond Buyer, states and municipalities sold $356 billion of bonds in 2002 and that's a record. States and local governments are bathed in deficits.
The Labor Department(I use that description loosely) will cease issuing reports which track the number of U.S. companies laying off 50 or more workers at a time. The reason given: the report does not generate jobs. I guess the spinmeisters have been bathed in too much daily bad news.
The hamburger war is upon us. The Whopper is on sale until Jan. 20 for 99 cents. Maybe we should use our national defense resources and liberate the hamburger rather than Iraq.
96% of all individual funds ended 2002 with losses. Gold funds did the best. As I said in June 2000, we'll see how good the so-called professionals really are at making money.
Congress reconvenes Tuesday. The President presents his "stimulus package" (I just love to be stimulated) the same day. The Democrats will push for an extension of unemployment benefits. That's comforting and caring since Congress managed to give themselves a pay raise before recessing. I always thought performance counted. No wonder the world over wants to live here. You can do nothing and get a raise.
Airbus recorded contracts for 309 planes in 2002 and Boeing only 231. As I've said before, Boeing's management is a figment of their own imagination.
Hollywood box office receipts were up 11% in 2002. Were the movies more entertaining and/or was it an escape from depressing times bathed in low consumer confidence?
Friday, January 03, 2003
1/3/03 A Mirage Or A Miracle?
What a great first trading day! There was joy in mudville. The good times were back. Or was it wishful thinking devoid of intelligence? Downbeat purchasing management surveys were released on Tuesday for N.Y and Cincinnati. The day before there was a similar poor report for Chicago. Yesterday the ISM reported that order backlogs declined for the 6th consecutive month. That supplier deliveries slowed for the 12th consecutive month. That manufacturing employment continued to decline and with it that index remained below 50% for the 27th consecutive month. Out of Crawford, TX came the genius statement that "the economy is pretty darn strong." Home Depot doesn't think so but they only have 1500 stores and they will experience same-store sales down 10% for the November thru January period. Goldman Sachs now predicts a decline in tech spending for 2003. Two-thirds of CIOs expect continued budget tightening in 2003. Auto executives don't see a recovery in their industry until 2005.
In light of the above, how did the ISM report for December a surge in the new order index from 50 to 63%? Of the 20 manufacturing sectors only 11 gained. The man who compiled the survey should know. His name is Norbert Ore and he heads up the ISM. He made it all clear and stated "the magnitude of the improvement is somewhat difficult to explain at this point." That's right. The market rallied on unexplained news. I'll splain it for you. It's simple. Anyone who ran a business could explain it. Christmas and New Year's day both fell on a Wednesday. Most manufacturing businesses either closed early the day before or didn't open at all. In fact, many businesses were closed after December 23 and didn't open until January 2nd, yesterday. Consequently, with supplier deliveries already slow, new orders needed to be placed no later than December 20th for delivery some time in January. The good news was not a miracle- just a mirage. That's what happens when you read just the headlines. How often have I said don't trade with the news coming from the media?
There is an old saying on Wall Street: so goes the first trading day of the year, so goes the first week, so goes the year. The saying fails to mention stupidity.
What a great first trading day! There was joy in mudville. The good times were back. Or was it wishful thinking devoid of intelligence? Downbeat purchasing management surveys were released on Tuesday for N.Y and Cincinnati. The day before there was a similar poor report for Chicago. Yesterday the ISM reported that order backlogs declined for the 6th consecutive month. That supplier deliveries slowed for the 12th consecutive month. That manufacturing employment continued to decline and with it that index remained below 50% for the 27th consecutive month. Out of Crawford, TX came the genius statement that "the economy is pretty darn strong." Home Depot doesn't think so but they only have 1500 stores and they will experience same-store sales down 10% for the November thru January period. Goldman Sachs now predicts a decline in tech spending for 2003. Two-thirds of CIOs expect continued budget tightening in 2003. Auto executives don't see a recovery in their industry until 2005.
In light of the above, how did the ISM report for December a surge in the new order index from 50 to 63%? Of the 20 manufacturing sectors only 11 gained. The man who compiled the survey should know. His name is Norbert Ore and he heads up the ISM. He made it all clear and stated "the magnitude of the improvement is somewhat difficult to explain at this point." That's right. The market rallied on unexplained news. I'll splain it for you. It's simple. Anyone who ran a business could explain it. Christmas and New Year's day both fell on a Wednesday. Most manufacturing businesses either closed early the day before or didn't open at all. In fact, many businesses were closed after December 23 and didn't open until January 2nd, yesterday. Consequently, with supplier deliveries already slow, new orders needed to be placed no later than December 20th for delivery some time in January. The good news was not a miracle- just a mirage. That's what happens when you read just the headlines. How often have I said don't trade with the news coming from the media?
There is an old saying on Wall Street: so goes the first trading day of the year, so goes the first week, so goes the year. The saying fails to mention stupidity.
Thursday, January 02, 2003
1/2/03 Fireworks In January
GE is asking for employees to shoulder higher healthcare co-payments. Such a request may result in GE's first strike in 30 years. The company is touching on a subject which can only cause fireworks. They are making a huge mistake in judgment. Even if employees swallow and accept the conditions due to the poor job market, underlying hatred for management will stay with the employees thru every increased co-payment.
The last time the market dropped 4 years in a row was during the depression.
Due to falling stock prices, IBM just contributed about $4 billion to its U.S. pension plan.
U.S. crude oil inventories are at a 26 year low.
How many of UAL's 80,000 employees will be fired? What a way to begin the new year.
I predict the next real hot spot will be Taiwan- not Iraq and not N.Korea. The Chinese are making growing military threats to recapture Taiwan. China is mighty with plenty of money and plenty of weaponry and plenty of technology. They are the force for this decade and beyond. Iraq and N.Korea are but a small nightmare compared with the China-Taiwan struggle.
Daniel Kahneman is the first psychologist to win the Nobel prize in economics. He said "the main mistake people make is they churn their accounts too much. They just do too much. And so, the advice to be diversified and not do too much is standard advice that people do not spontaneously follow. But not taking that advice is costly...it's just not going to happen that investors will beat the market." I'm an optimist compared to Kahneman.
GE is asking for employees to shoulder higher healthcare co-payments. Such a request may result in GE's first strike in 30 years. The company is touching on a subject which can only cause fireworks. They are making a huge mistake in judgment. Even if employees swallow and accept the conditions due to the poor job market, underlying hatred for management will stay with the employees thru every increased co-payment.
The last time the market dropped 4 years in a row was during the depression.
Due to falling stock prices, IBM just contributed about $4 billion to its U.S. pension plan.
U.S. crude oil inventories are at a 26 year low.
How many of UAL's 80,000 employees will be fired? What a way to begin the new year.
I predict the next real hot spot will be Taiwan- not Iraq and not N.Korea. The Chinese are making growing military threats to recapture Taiwan. China is mighty with plenty of money and plenty of weaponry and plenty of technology. They are the force for this decade and beyond. Iraq and N.Korea are but a small nightmare compared with the China-Taiwan struggle.
Daniel Kahneman is the first psychologist to win the Nobel prize in economics. He said "the main mistake people make is they churn their accounts too much. They just do too much. And so, the advice to be diversified and not do too much is standard advice that people do not spontaneously follow. But not taking that advice is costly...it's just not going to happen that investors will beat the market." I'm an optimist compared to Kahneman.
Wednesday, January 01, 2003
1/1/03 Happy New Year
We start 2003 with a clean slate- no hits, no runs, no errors. Yesterday is history. Thursday is our first trading day of the new year. A few things have changed. The New York Stock Exchange announced new circuit breakers. As of Thursday, there will be revised circuit-breaker trigger levels for the first quarter of 2003, the NYSE announced.
Circuit-breaker points are the thresholds at which trading halts marketwide for single-day declines in the Dow Jones industrial average. During the first quarter, the 10-, 20- and 30-percent decline levels, respectively, in the Dow will be:
-- An 850-point drop in the Dow before 2 p.m. (all times Eastern) will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later.
-- A 1,700-point drop in the Dow before 1 p.m. will halt trading for two hours; for one hour if between 1 p.m. and 2 p.m.; and for the remainder of the day if at 2 p.m. or later.
-- A 2,550-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
The second change is that consumers have even less confidence going forward than originally anticipated. The reasons are quite clear: a grim job market, little expectation for incomes to rise, and increasing fuel and healthcare costs. In sum, consumers view conditions in the New Year in a poor light. Unfortunately, terrorism continues to occupy the vast majority of focus in Washington. Obviously, protecting our safety and freedoms is vital. Nevertheless, our CEO needs to walk and chew gum at the same time and so does the Congress. We are on a very dangerous path. Confidence in the U.S. is waning, and that is reflected in the falling dollar. We need to import at least $1.5 billion per day to fund our budget deficit and our current account shortfall. That is becoming a daunting task. Those deficits undermine our safety and freedoms. Americans must remember that. All the more reason to spend less and save more. Only you can keep your family in food, shelter, and clothing. Not the government.
We start 2003 with a clean slate- no hits, no runs, no errors. Yesterday is history. Thursday is our first trading day of the new year. A few things have changed. The New York Stock Exchange announced new circuit breakers. As of Thursday, there will be revised circuit-breaker trigger levels for the first quarter of 2003, the NYSE announced.
Circuit-breaker points are the thresholds at which trading halts marketwide for single-day declines in the Dow Jones industrial average. During the first quarter, the 10-, 20- and 30-percent decline levels, respectively, in the Dow will be:
-- An 850-point drop in the Dow before 2 p.m. (all times Eastern) will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later.
-- A 1,700-point drop in the Dow before 1 p.m. will halt trading for two hours; for one hour if between 1 p.m. and 2 p.m.; and for the remainder of the day if at 2 p.m. or later.
-- A 2,550-point drop will halt trading for the remainder of the day regardless of when the decline occurs.
The second change is that consumers have even less confidence going forward than originally anticipated. The reasons are quite clear: a grim job market, little expectation for incomes to rise, and increasing fuel and healthcare costs. In sum, consumers view conditions in the New Year in a poor light. Unfortunately, terrorism continues to occupy the vast majority of focus in Washington. Obviously, protecting our safety and freedoms is vital. Nevertheless, our CEO needs to walk and chew gum at the same time and so does the Congress. We are on a very dangerous path. Confidence in the U.S. is waning, and that is reflected in the falling dollar. We need to import at least $1.5 billion per day to fund our budget deficit and our current account shortfall. That is becoming a daunting task. Those deficits undermine our safety and freedoms. Americans must remember that. All the more reason to spend less and save more. Only you can keep your family in food, shelter, and clothing. Not the government.
Tuesday, December 31, 2002
12/31/02 Sell The Rallies, Buy The Dips, Stay On The Sidelines?
As 2002 comes to a close, it appears that the market will have the worst December since 1931. At the present time, the S&P 500 is down over 20% this year and the Nasdaq has declined 30%. Where do we go from here?
1. Keep the trend your friend. For the past three years the trend has been down. It is still down. Do not buck the trend.
2. Fourth quarter results have not been released; however, the quarter is over today. I'm not interested in warnings for the 4th quarter. That's history. I am concerned about expectations for the March quarter and beyond. With minimal topline growth and little pricing power, what should a P/E ratio be for cost-cutting? Not very high in my view. You can't grow a company thru cost cutting.
3. The dollar is, in my opinion, still overvalued against the Yen and the Swiss franc.
4. The budget deficits at the local and state levels are a drag on the economy and will continue to be in 2003.
5. The federal government's budget deficit continues to exceed expectations by wide margins. The debt level will need to be raised in February. This indebtedness hampers economic flexibility.
6. It's not just that 41 million Americans don't have healthcare insurance. The rest of the story is the rapidly rising cost of healthcare for the rest of Americans who do have insurance. This problem is raging out of control.
7. The cold winter is creating higher heating bills, and the latter are exacerbated by the rising cost of heating oil, natural gas, and propane.
8. Despite what the Fed proclaims, this institution plays second fiddle to amrket forces. Do you really believe the Fed can print money and inflate the country out of its economic malaise? The dollar is weak and getting weaker. China will continue to export deflation into the U.S. India will continue to be an outsourcing IT force. Our country will not win an economic battle with a guns and butter arsenal. That's a losing proposition.
9. Despite what the media might indicate, the U.S. has weak economic leadership and focus. Ross Perot knew what it took to run a business. We need a chief executive who can make tough business decisions. On both sides of the aisle I don't see such a person.
10. Before you buy or sell, place yourself where the risk/reward is clearly in your favor. If you make a mistake, cut your losses short. There is no room for indecision. When not comfortable, do nothing. When unable to sleep, sell to the sleeping point. Look for potential value and concentrate on companies with repeat business. Such a stock could be Coca Cola. It's on the new low list. I don't make recommendations. I suggest investigating individual situations. Other examples might be Starbucks, McDonald's, Home Depot, and Micron Technology. Maybe one of these companies will merit your attention. At this writing, I don't own any of these stocks.
11. When it comes to a war or a potential war, I worry about Americans being injured and the possible loss of life. I don't concern myself with the impact of war on the stock market. Wars, thank goodness, end. The need for positive cash flow is on-going.
12. Investing is a long-term proposition. To be successful one must think like an owner. As a shareowner, you are a owner of the business. Ask yourself. Do you want to own a stake in that business?
13. The New Year begins tomorrow. It's a fresh slate. The fact that I have been right on the market for the last three years means nothing. That's history. We're in the present and looking out on the horizon. Maybe the economy will grow at 1 or 2% in 2003. Maybe there will be no growth. Maybe there will be a recession. Maybe, bite my tongue, a depression. Maybe deflation. Maybe inflation. Maybe stagflation. Take your pick. It matters but not entirely. In every economy and in every market opportunities are there for the picking. Remain alert. Please remember. You cannot buy at the low and sell at the high. Unlike your spouse, you are not married to an individual stock. It's only business.
I wish all of my readers a happy and healthy New Year.
As 2002 comes to a close, it appears that the market will have the worst December since 1931. At the present time, the S&P 500 is down over 20% this year and the Nasdaq has declined 30%. Where do we go from here?
1. Keep the trend your friend. For the past three years the trend has been down. It is still down. Do not buck the trend.
2. Fourth quarter results have not been released; however, the quarter is over today. I'm not interested in warnings for the 4th quarter. That's history. I am concerned about expectations for the March quarter and beyond. With minimal topline growth and little pricing power, what should a P/E ratio be for cost-cutting? Not very high in my view. You can't grow a company thru cost cutting.
3. The dollar is, in my opinion, still overvalued against the Yen and the Swiss franc.
4. The budget deficits at the local and state levels are a drag on the economy and will continue to be in 2003.
5. The federal government's budget deficit continues to exceed expectations by wide margins. The debt level will need to be raised in February. This indebtedness hampers economic flexibility.
6. It's not just that 41 million Americans don't have healthcare insurance. The rest of the story is the rapidly rising cost of healthcare for the rest of Americans who do have insurance. This problem is raging out of control.
7. The cold winter is creating higher heating bills, and the latter are exacerbated by the rising cost of heating oil, natural gas, and propane.
8. Despite what the Fed proclaims, this institution plays second fiddle to amrket forces. Do you really believe the Fed can print money and inflate the country out of its economic malaise? The dollar is weak and getting weaker. China will continue to export deflation into the U.S. India will continue to be an outsourcing IT force. Our country will not win an economic battle with a guns and butter arsenal. That's a losing proposition.
9. Despite what the media might indicate, the U.S. has weak economic leadership and focus. Ross Perot knew what it took to run a business. We need a chief executive who can make tough business decisions. On both sides of the aisle I don't see such a person.
10. Before you buy or sell, place yourself where the risk/reward is clearly in your favor. If you make a mistake, cut your losses short. There is no room for indecision. When not comfortable, do nothing. When unable to sleep, sell to the sleeping point. Look for potential value and concentrate on companies with repeat business. Such a stock could be Coca Cola. It's on the new low list. I don't make recommendations. I suggest investigating individual situations. Other examples might be Starbucks, McDonald's, Home Depot, and Micron Technology. Maybe one of these companies will merit your attention. At this writing, I don't own any of these stocks.
11. When it comes to a war or a potential war, I worry about Americans being injured and the possible loss of life. I don't concern myself with the impact of war on the stock market. Wars, thank goodness, end. The need for positive cash flow is on-going.
12. Investing is a long-term proposition. To be successful one must think like an owner. As a shareowner, you are a owner of the business. Ask yourself. Do you want to own a stake in that business?
13. The New Year begins tomorrow. It's a fresh slate. The fact that I have been right on the market for the last three years means nothing. That's history. We're in the present and looking out on the horizon. Maybe the economy will grow at 1 or 2% in 2003. Maybe there will be no growth. Maybe there will be a recession. Maybe, bite my tongue, a depression. Maybe deflation. Maybe inflation. Maybe stagflation. Take your pick. It matters but not entirely. In every economy and in every market opportunities are there for the picking. Remain alert. Please remember. You cannot buy at the low and sell at the high. Unlike your spouse, you are not married to an individual stock. It's only business.
I wish all of my readers a happy and healthy New Year.
Monday, December 30, 2002
12/30/02 Michael's
As a youngster, I always got my haircuts at Michael's Barbershop on N.Y.C.'s upper eastside. It was a few blocks walk from where I lived. After 92 years, Michael's has closed its doors.
The yield on stocks is higher than that of short-term treasury bills. Both are slim pickens.
Israel is battling its worst recession in 50 years.
The Nikkei is down 19% in 2002, and at its lowest level in 20 years.
Crude oil is trading at a 2 year high of $33 per barrel.
The dollar is at 6 week lows vs the yen.
Since 9/11, loayoffs in the financial services sector have exceeded 6%. Expect more in 2003.
In the past year TV political ads amounted to $1 billion. In my view, there isn't much to show for it.
The Energy Information Agency( we have agencies for agencies) recently forecast that U.S. households will spend 31% more for natural gas compared with last year, 41% more for heating oil, 17% more for propane, and 13% more for electricity. That amouints to a tax increase. When added to the rising cost of healthcare, it's no wonder you are seeing grimmer faces.
Now for the good news. For the first time since 1986, the Giants and the Jets are in the NFL playoffs at the same time.
A question for 2003- do you buy the dips, sell the rallies, or stand on the sidelines? Let's visit that subject tomorrow and possibly the day after.
Happy birthday wishes to Brittany and Maggie's mother.
As a youngster, I always got my haircuts at Michael's Barbershop on N.Y.C.'s upper eastside. It was a few blocks walk from where I lived. After 92 years, Michael's has closed its doors.
The yield on stocks is higher than that of short-term treasury bills. Both are slim pickens.
Israel is battling its worst recession in 50 years.
The Nikkei is down 19% in 2002, and at its lowest level in 20 years.
Crude oil is trading at a 2 year high of $33 per barrel.
The dollar is at 6 week lows vs the yen.
Since 9/11, loayoffs in the financial services sector have exceeded 6%. Expect more in 2003.
In the past year TV political ads amounted to $1 billion. In my view, there isn't much to show for it.
The Energy Information Agency( we have agencies for agencies) recently forecast that U.S. households will spend 31% more for natural gas compared with last year, 41% more for heating oil, 17% more for propane, and 13% more for electricity. That amouints to a tax increase. When added to the rising cost of healthcare, it's no wonder you are seeing grimmer faces.
Now for the good news. For the first time since 1986, the Giants and the Jets are in the NFL playoffs at the same time.
A question for 2003- do you buy the dips, sell the rallies, or stand on the sidelines? Let's visit that subject tomorrow and possibly the day after.
Happy birthday wishes to Brittany and Maggie's mother.
Sunday, December 29, 2002
12/29/02 The Commodity Research Bureau Index
The 17-commodity CRB last week reached a 5 year high. Natural gas, wheat, cocoa, and coffee are all on the rise and higher consumer prices could be the result.
Venezuela is now importing gasoline.
The dollar is at its lowest level against the Swiss franc in nearly 4 years.
For the month of December, the Dow is down 6.7%, the S&P 500 6.5%, and the Nasdaq 8.8%. As I stated at the end of November, the year-end rally had already taken place.
According to a N.Y. Daily News poll, 50% of the respondents gave Mayor Bllomberg an F.
Robert Menendez is now the number 3 Democrat in the House. As a possible VP running mate, he could help ensure the Hispanic vote in 2004.
In a letter to JP Morgan Chase employees the CEO wrote "give yourself an attitude check." At the same time, the rank and file employees had their stock bonuses slashed by more than 50%. Maybe the CEO should be cut.
Japan's economic minister said Japan's top priority in 2003 will be to end deflation.
The 17-commodity CRB last week reached a 5 year high. Natural gas, wheat, cocoa, and coffee are all on the rise and higher consumer prices could be the result.
Venezuela is now importing gasoline.
The dollar is at its lowest level against the Swiss franc in nearly 4 years.
For the month of December, the Dow is down 6.7%, the S&P 500 6.5%, and the Nasdaq 8.8%. As I stated at the end of November, the year-end rally had already taken place.
According to a N.Y. Daily News poll, 50% of the respondents gave Mayor Bllomberg an F.
Robert Menendez is now the number 3 Democrat in the House. As a possible VP running mate, he could help ensure the Hispanic vote in 2004.
In a letter to JP Morgan Chase employees the CEO wrote "give yourself an attitude check." At the same time, the rank and file employees had their stock bonuses slashed by more than 50%. Maybe the CEO should be cut.
Japan's economic minister said Japan's top priority in 2003 will be to end deflation.
Saturday, December 28, 2002
12/28/02 No Santa Claus Rally
For the second day in a row the Dow and the Nasdaq closed near their session lows. The S&P 500 index closed at its lowest level in more than 2 months.
800,000 jobless lose their unemployment benefits today.
According to a recent poll, the vast majority of Americans believe the U.S. is very likely or somewhat likely to go to war with Iraq. There is a new moon around Feb 1, and that could be a possible date for the war to begin.
McDonald's is planning to introduce a new beef patty this Spring. Maybe I should ask for the recipe.
Ethan Allen opened its first store in China. Does that mean China will now be making their furnitiure?
Applied Biosystems to cut 9% of their workforce.
For the second day in a row the Dow and the Nasdaq closed near their session lows. The S&P 500 index closed at its lowest level in more than 2 months.
800,000 jobless lose their unemployment benefits today.
According to a recent poll, the vast majority of Americans believe the U.S. is very likely or somewhat likely to go to war with Iraq. There is a new moon around Feb 1, and that could be a possible date for the war to begin.
McDonald's is planning to introduce a new beef patty this Spring. Maybe I should ask for the recipe.
Ethan Allen opened its first store in China. Does that mean China will now be making their furnitiure?
Applied Biosystems to cut 9% of their workforce.
Friday, December 27, 2002
Thursday, December 26, 2002
12/26/02 Too Little Too Late
That's how WalMart described their holiday season business. Despite a couple of strong days just before Christmas, the company lowered its December same-store sales outlook to be up 2 to 3% rather than the previous 3 to 5% guidance. At this point, it is realistic to expect reduced expectations from other retailers.
There are still 3 1/2 million Americans receiving jobless benefits. A significant portion of those will have those benefits end in the next few days. This fact had to impact holiday sales.
That's how WalMart described their holiday season business. Despite a couple of strong days just before Christmas, the company lowered its December same-store sales outlook to be up 2 to 3% rather than the previous 3 to 5% guidance. At this point, it is realistic to expect reduced expectations from other retailers.
There are still 3 1/2 million Americans receiving jobless benefits. A significant portion of those will have those benefits end in the next few days. This fact had to impact holiday sales.
Wednesday, December 25, 2002
12/25/02 Merry Christmas
According to the Stock Trader's Almanac, going back most of this century, about 45% of all stock market gains come in the year preceding an election year. In fact, the third year of a term produces about 3 times as many up years as down years.
The stock market seems headed for its third down December in six years. 2002 will be the first time since 1942 that the market has been down in 3 consecutive years. At the same time, so far this quarter the Dow is up 11%, the Nasdaq 17%, and the S&P 9%.
Crude oil prices have gained 17% since the start of the strike in Venezuela.
Gold is at a 5 1/2 year high at $347 per ounce.
We know that companies are looking for ways to cut costs. The daily layoffs are a daily reminder. What would Jack Welch say about this? In 2001 only 434 civilian federal government workers, out of a 3 million plus workforce, were fired. I guess the rest were great job performers and are a significant reason that this country's productivity is on the rise. Hello! Anyone home?
The treasury department asked Congress to increase the government's borrowing authority, and warned the current $6.4 trillion debt limit may be reached within 60 days. How is that possible? Only a month or so ago the budget deficit for the year ending next September was estimated at $146 billion. To exceed the debt limit the deficit would need to be $100 billion more than just estimated. When will Americans elect officials who actually will reduce the net outflow of government funds? The government produces absolutely nothing, and should be viewed as the employer and spender of last resort. Unlike the vast majority of Americans, do you think civilian federal government workers are worried this holiday season about losing a job or having their hours cut? Do they plan for the worst case scenario? I think not.
According to the Stock Trader's Almanac, going back most of this century, about 45% of all stock market gains come in the year preceding an election year. In fact, the third year of a term produces about 3 times as many up years as down years.
The stock market seems headed for its third down December in six years. 2002 will be the first time since 1942 that the market has been down in 3 consecutive years. At the same time, so far this quarter the Dow is up 11%, the Nasdaq 17%, and the S&P 9%.
Crude oil prices have gained 17% since the start of the strike in Venezuela.
Gold is at a 5 1/2 year high at $347 per ounce.
We know that companies are looking for ways to cut costs. The daily layoffs are a daily reminder. What would Jack Welch say about this? In 2001 only 434 civilian federal government workers, out of a 3 million plus workforce, were fired. I guess the rest were great job performers and are a significant reason that this country's productivity is on the rise. Hello! Anyone home?
The treasury department asked Congress to increase the government's borrowing authority, and warned the current $6.4 trillion debt limit may be reached within 60 days. How is that possible? Only a month or so ago the budget deficit for the year ending next September was estimated at $146 billion. To exceed the debt limit the deficit would need to be $100 billion more than just estimated. When will Americans elect officials who actually will reduce the net outflow of government funds? The government produces absolutely nothing, and should be viewed as the employer and spender of last resort. Unlike the vast majority of Americans, do you think civilian federal government workers are worried this holiday season about losing a job or having their hours cut? Do they plan for the worst case scenario? I think not.
Tuesday, December 24, 2002
12/24/02 Posting #2 Haram
Haram is the Arabic word for forbidden. In Saudi Arabia churches are not permitted. Islam is the only accepted religion. As such, to celebrate Christmas one must have a very private gathering in one's home.
During these difficult and stressful times we sometimes overlook the wonders of freedom, and religious freedom is an important part of every day American life. We are indeed very lucky to be U.S. citizens.
Haram is the Arabic word for forbidden. In Saudi Arabia churches are not permitted. Islam is the only accepted religion. As such, to celebrate Christmas one must have a very private gathering in one's home.
During these difficult and stressful times we sometimes overlook the wonders of freedom, and religious freedom is an important part of every day American life. We are indeed very lucky to be U.S. citizens.
12/24/02 Sectors In The S&P 500
For the first time since the bear market started in 2000, every one of the 10 broad sectors in the S&P 500 index dropped in 2002.
Oil hits a 22 month high at $31.43 per barrel. Gasoline prices rose at the pump this week.
November durable goods orders fell 1.4%. Without military orders, the fall would have been 2.3%. It should be noted that economists had predicted a small gain.
According to a poll taken by the Atlanta Journal-Constitution, 30% of those living in the state of Georgia said the economy is declining, and 50% said it is neither mending nor decaying. If people feel this way, it's no wonder that retail holiday sales are disappointing.
For the first time since the bear market started in 2000, every one of the 10 broad sectors in the S&P 500 index dropped in 2002.
Oil hits a 22 month high at $31.43 per barrel. Gasoline prices rose at the pump this week.
November durable goods orders fell 1.4%. Without military orders, the fall would have been 2.3%. It should be noted that economists had predicted a small gain.
According to a poll taken by the Atlanta Journal-Constitution, 30% of those living in the state of Georgia said the economy is declining, and 50% said it is neither mending nor decaying. If people feel this way, it's no wonder that retail holiday sales are disappointing.
Monday, December 23, 2002
12/23/02 Inktomi
Several months ago I mentioned that, in my view, those who purchased internet stocks at highly inflated 2000 prices would not get their capital returned to them. They might rally, I said, from pennies to single digits and to expect nothing more.
Today Yahoo announced the purchase of Inktomi. The latter's shareholders will get less than $2 a share. This is better than pennies and more could not have been anticipated. Inktomi continues to lose money and layoff employees. As a stand-alone company, they didn't have a future. This is not the exception to the rule, but rather the legacy of the dotcoms. What a waste of capital and human effort.
Several months ago I mentioned that, in my view, those who purchased internet stocks at highly inflated 2000 prices would not get their capital returned to them. They might rally, I said, from pennies to single digits and to expect nothing more.
Today Yahoo announced the purchase of Inktomi. The latter's shareholders will get less than $2 a share. This is better than pennies and more could not have been anticipated. Inktomi continues to lose money and layoff employees. As a stand-alone company, they didn't have a future. This is not the exception to the rule, but rather the legacy of the dotcoms. What a waste of capital and human effort.
Saturday, December 21, 2002
12/22/02 An Early Posting For Sunday
In Europe shoppers are spending less on holiday presents, and visits to shopping centers are down from a year ago. The reasons given for consumers curbing their spending- a lack of confidence in economic growth and job security. Sound familiar?
The British pound has risen in value for 3 consecutive weeks. This year it is up 10% vs the dollar but is down 4 1/2% vs the Euro.
WalMart employs 1.4 million people. The second largest private employer is McDonald's, and they employ only 400,000.
In Europe shoppers are spending less on holiday presents, and visits to shopping centers are down from a year ago. The reasons given for consumers curbing their spending- a lack of confidence in economic growth and job security. Sound familiar?
The British pound has risen in value for 3 consecutive weeks. This year it is up 10% vs the dollar but is down 4 1/2% vs the Euro.
WalMart employs 1.4 million people. The second largest private employer is McDonald's, and they employ only 400,000.
12/21/02 "Every Investor Deserves Honest Investment Advice"
During my career on Wall Street I ran two successful brokerage firms. The settlement announced yesterday is both unjust and predictable. Jack Grubman agreed to a lifetime ban and a $15 million fine. His salary in one year- 2001- was $20 million. Grubman's employer, Citibank, paid a fine of only $400 million. Citibank made untold hundreds of millions of dollars in investment banking fees. Citibank agreed to no wrongdoing. They, along with 9 other firms who paid a total of $4.4 billion in fines, neither admitted nor denied charges that they had misled investors. With a settlement like this how could Spitzer then say "every investor deserves honest investment advice"? Spitzer then said "this has been only about one thing- ensuring retail investors get a fair shake." I think a good stocking stuffer for Spitzer would be a "Dow 10,000" cap.
November was the first month since May that investors were net buyers of stock funds. Since the major indexes rallied about 20%, that should come as no surprise.
Fourth quarter GDP growth is estimated at 1.4%.
Accounting irregularities must be viral. $9.1 million in accounting errors were discovered in the Des Moines, Iowa school district.
Retailers should have seen slow holiday sales coming. Consumer credit grew at a slim annual rate of 1% in October. In the 3rd quarter ended September the pace was 3 1/2%.
There are 37,000 U.S. troops in S. Korea.
Gucci's profits were down 14 1/2% for the latest quarter, and the company partially blamed poor sales in Hawaii.
The median price of existing homes in California in November increased 21 1/2% compared to the same period a year ago.
In the Silicon Valley 61% say their company is not hosting a holiday party; 75% are not giving any paid time off; and 60% plan less holiday spending in their households.
As noted in a previous blog, it was now officially announced that Medicare will cut payments to doctors by 4.4%.
Scientists at the National Climatic Data Center found that 2002 is likely to be the second warmest year on record for the globe.
The Philadelphia Inquirer posted a story saying that Al Hakam, 60 miles south of Baghdad, produced anthrax and other biological poisons between 1992 and 1996 when the plant was destroyed. This is according to someone who worked at that facility.
During my career on Wall Street I ran two successful brokerage firms. The settlement announced yesterday is both unjust and predictable. Jack Grubman agreed to a lifetime ban and a $15 million fine. His salary in one year- 2001- was $20 million. Grubman's employer, Citibank, paid a fine of only $400 million. Citibank made untold hundreds of millions of dollars in investment banking fees. Citibank agreed to no wrongdoing. They, along with 9 other firms who paid a total of $4.4 billion in fines, neither admitted nor denied charges that they had misled investors. With a settlement like this how could Spitzer then say "every investor deserves honest investment advice"? Spitzer then said "this has been only about one thing- ensuring retail investors get a fair shake." I think a good stocking stuffer for Spitzer would be a "Dow 10,000" cap.
November was the first month since May that investors were net buyers of stock funds. Since the major indexes rallied about 20%, that should come as no surprise.
Fourth quarter GDP growth is estimated at 1.4%.
Accounting irregularities must be viral. $9.1 million in accounting errors were discovered in the Des Moines, Iowa school district.
Retailers should have seen slow holiday sales coming. Consumer credit grew at a slim annual rate of 1% in October. In the 3rd quarter ended September the pace was 3 1/2%.
There are 37,000 U.S. troops in S. Korea.
Gucci's profits were down 14 1/2% for the latest quarter, and the company partially blamed poor sales in Hawaii.
The median price of existing homes in California in November increased 21 1/2% compared to the same period a year ago.
In the Silicon Valley 61% say their company is not hosting a holiday party; 75% are not giving any paid time off; and 60% plan less holiday spending in their households.
As noted in a previous blog, it was now officially announced that Medicare will cut payments to doctors by 4.4%.
Scientists at the National Climatic Data Center found that 2002 is likely to be the second warmest year on record for the globe.
The Philadelphia Inquirer posted a story saying that Al Hakam, 60 miles south of Baghdad, produced anthrax and other biological poisons between 1992 and 1996 when the plant was destroyed. This is according to someone who worked at that facility.
Friday, December 20, 2002
12/20/02 LIBERTY
"Experience teaches us to be most on our guard to
protect liberty when the government's purpose is
beneficent. Men born to freedom are naturally alert to
repel invasion of their liberty by evil-minded rulers.
The greatest dangers to liberty lurk in insidious
encroachment by men of zeal, well-meaning but without
understanding."
- Louis Dembitz Brandeis
Please get familiar with Bush's Total Information Unit. Hw wants the ISPs to facilitate the monitoring and surveillance of internet users thru this unit.
Approximately 10 securities firms will announce a $1 billion settlement with the SEC. This shall acknowledge misleading investors thru research recommendations aimed at winning investment banking business. Since the beginning of the bear market, $7 trillion has been lost. Does a $1 billion settlement sound just? How about ousting the firms from doing business with the public? It may not be the same, but Pete Rose has been banished from baseball for betting. Please think about it.
Greenspan sees no risk of deflation. He must not be familiar with over-supply overwhelming too little demand mixed with decreasing prices being exported by China. Just like he questions the ability to detect bubbles in real-time(which in fact he did), I question his willingness to acknowledge deflation in real-time(although Fed minutes clearly talk of deflation dangers). He does accept the fact that companies have trouble raising prices. That is some consolation.
In its 18th day the Venezuelan oil strike has resulted in daily production plunging from 3 million barrels to 400,000.
Home Depot has just opened its 1500th location.
Property taxes are rising by as much as 25% for N.Y.C. homeowners.
Gold hits a 6 year high, and is up 25% in 2002.
Weekly jobless claims at 433,000 and the 4 week moving average at 400,000.
Barnes & Noble announce weak holiday sales, and warn for their 4th quarter.
The economic downturn has erased 62,000 jobs in Georgia. Bankruptcies in that state are up 16%, and their GDP has grown only 1% in 2002.
Rupert Murdoch makes new approach to GM to buy DirecTV.
"Experience teaches us to be most on our guard to
protect liberty when the government's purpose is
beneficent. Men born to freedom are naturally alert to
repel invasion of their liberty by evil-minded rulers.
The greatest dangers to liberty lurk in insidious
encroachment by men of zeal, well-meaning but without
understanding."
- Louis Dembitz Brandeis
Please get familiar with Bush's Total Information Unit. Hw wants the ISPs to facilitate the monitoring and surveillance of internet users thru this unit.
Approximately 10 securities firms will announce a $1 billion settlement with the SEC. This shall acknowledge misleading investors thru research recommendations aimed at winning investment banking business. Since the beginning of the bear market, $7 trillion has been lost. Does a $1 billion settlement sound just? How about ousting the firms from doing business with the public? It may not be the same, but Pete Rose has been banished from baseball for betting. Please think about it.
Greenspan sees no risk of deflation. He must not be familiar with over-supply overwhelming too little demand mixed with decreasing prices being exported by China. Just like he questions the ability to detect bubbles in real-time(which in fact he did), I question his willingness to acknowledge deflation in real-time(although Fed minutes clearly talk of deflation dangers). He does accept the fact that companies have trouble raising prices. That is some consolation.
In its 18th day the Venezuelan oil strike has resulted in daily production plunging from 3 million barrels to 400,000.
Home Depot has just opened its 1500th location.
Property taxes are rising by as much as 25% for N.Y.C. homeowners.
Gold hits a 6 year high, and is up 25% in 2002.
Weekly jobless claims at 433,000 and the 4 week moving average at 400,000.
Barnes & Noble announce weak holiday sales, and warn for their 4th quarter.
The economic downturn has erased 62,000 jobs in Georgia. Bankruptcies in that state are up 16%, and their GDP has grown only 1% in 2002.
Rupert Murdoch makes new approach to GM to buy DirecTV.
Thursday, December 19, 2002
12/19/02 Nikkei Hits 20 Year Low
As can be seen in Japan, bear markets can have a long life- just like bull markets.
Crude oil trades over $31 per barrel and is up 55% in 2002.
Conseco files for bankruptcy. It is the third largest company to do so.
GM's Doraville, Ga. plant to cut production and have layoffs. This is GM's sole producer of minivans.
United cutting leisure class airfares by up to 40%. Will it be enough?
Sales fall short at Micron.
Activision cites poor holiday sales.
Blockbuster slashed it's 2002 profit outlook. The shortfall is a big one. So much for nesting.
Winnebago is not optimistic about 2003. Maybe high gas prices will keep folks off the roads.
It is hard to swallow that Iraq speculates it might destroy its own oil fields, food supplies, and power plants. Scorched earth has never been a successful policy.
Business owners are permitted to depreciate SUVs and pickups more quickly than cars. Why? SUVs are classified as light trucks. The SUV must weigh over 6000 pounds. That doesn't sound light to me. I find this matter upsetting, and isn't fair for couples without children or singles. In addition, suppose a mother doesn't want to be a soccer mom? Maybe Trent Lott should take this up as a new popular cause and make people forget the current furor.
As can be seen in Japan, bear markets can have a long life- just like bull markets.
Crude oil trades over $31 per barrel and is up 55% in 2002.
Conseco files for bankruptcy. It is the third largest company to do so.
GM's Doraville, Ga. plant to cut production and have layoffs. This is GM's sole producer of minivans.
United cutting leisure class airfares by up to 40%. Will it be enough?
Sales fall short at Micron.
Activision cites poor holiday sales.
Blockbuster slashed it's 2002 profit outlook. The shortfall is a big one. So much for nesting.
Winnebago is not optimistic about 2003. Maybe high gas prices will keep folks off the roads.
It is hard to swallow that Iraq speculates it might destroy its own oil fields, food supplies, and power plants. Scorched earth has never been a successful policy.
Business owners are permitted to depreciate SUVs and pickups more quickly than cars. Why? SUVs are classified as light trucks. The SUV must weigh over 6000 pounds. That doesn't sound light to me. I find this matter upsetting, and isn't fair for couples without children or singles. In addition, suppose a mother doesn't want to be a soccer mom? Maybe Trent Lott should take this up as a new popular cause and make people forget the current furor.
Wednesday, December 18, 2002
12/18/02 Gold Trading Over $342 Per Ounce
The dollar continues weak and gold exhibits on-going strength, and is now up $80 per ounce since I turned positive on the metal for an investment.
Delta plans 3000 more layoffs in 2003.
For every $1 rise in the cost of a barrel of crude oil the impact is about 1/10 of 1% in the U.S. GDP.
Best Buy cut their 4th quarter earnings estimates.
Venezuela exports 2.8 million barrels of oil per day and accounts for 14% of U.S. oil imports.
December month to date retail sales are projected to be down 5%. WalMart same store sales up about 3% but Target's are well below plan. Further discounting can be expected for this Saturday, the largest shopping day of the year.
In 2002 the dollar has fallen 8% against all major currencies and is at a 3 year low vs the Euro.
California is looking at a $35 billion deficit over the next 18 months.
The dollar continues weak and gold exhibits on-going strength, and is now up $80 per ounce since I turned positive on the metal for an investment.
Delta plans 3000 more layoffs in 2003.
For every $1 rise in the cost of a barrel of crude oil the impact is about 1/10 of 1% in the U.S. GDP.
Best Buy cut their 4th quarter earnings estimates.
Venezuela exports 2.8 million barrels of oil per day and accounts for 14% of U.S. oil imports.
December month to date retail sales are projected to be down 5%. WalMart same store sales up about 3% but Target's are well below plan. Further discounting can be expected for this Saturday, the largest shopping day of the year.
In 2002 the dollar has fallen 8% against all major currencies and is at a 3 year low vs the Euro.
California is looking at a $35 billion deficit over the next 18 months.
12/18/02 Gold Trading Over $342 Per Ounce
The dollar continues weak and gold exhibits on-going strength, and is now up $80 per ounce since I turned positive on the metal for an investment.
Delta plans 3000 more layoffs in 2003.
For every $1 rise in the cost of a barrel of crude oil the impact is about 1/10 of 1% in the U.S. GDP.
Best Buy cut their 4th quarter earnings estimates.
Venezuela exports 2.8 million barrels of oil per day and accounts for 14% of U.S. oil imports.
December month to date retail sales are projected to be down 5%. WalMart same store sales up about 3% but Target's are well below plan. Further discounting can be expected for this Saturday, the largest shopping day of the year.
In 2002 the dollar has fallen 8% against all major currencies and is at a 3 year low vs the Euro.
California is looking at a $35 billion deficit over the next 18 months.
The dollar continues weak and gold exhibits on-going strength, and is now up $80 per ounce since I turned positive on the metal for an investment.
Delta plans 3000 more layoffs in 2003.
For every $1 rise in the cost of a barrel of crude oil the impact is about 1/10 of 1% in the U.S. GDP.
Best Buy cut their 4th quarter earnings estimates.
Venezuela exports 2.8 million barrels of oil per day and accounts for 14% of U.S. oil imports.
December month to date retail sales are projected to be down 5%. WalMart same store sales up about 3% but Target's are well below plan. Further discounting can be expected for this Saturday, the largest shopping day of the year.
In 2002 the dollar has fallen 8% against all major currencies and is at a 3 year low vs the Euro.
California is looking at a $35 billion deficit over the next 18 months.
Tuesday, December 17, 2002
12/17/02 KMart
Kmart to be delisted this week from the NYSE.
Factories and other industrial operations are running at 75% of their capacity in the U.S.
Ernst and Young says employers lose an estimated 20% of every dollar to workplace fraud. That is difficult to imagine.
Some Fed members are concerned further tax cuts "would likely take effect too late to foster much added spending in the year ahead."
The Congressional Budget Office forecasts a $145 billion deficit in 2003. I would be very surprised if the figure were that low.
McDonald's warns of a 4th quarter earnings disappointment.
Albert Einstein: "Insanity is doing the same thing over and over again and expecting different results."
Kmart to be delisted this week from the NYSE.
Factories and other industrial operations are running at 75% of their capacity in the U.S.
Ernst and Young says employers lose an estimated 20% of every dollar to workplace fraud. That is difficult to imagine.
Some Fed members are concerned further tax cuts "would likely take effect too late to foster much added spending in the year ahead."
The Congressional Budget Office forecasts a $145 billion deficit in 2003. I would be very surprised if the figure were that low.
McDonald's warns of a 4th quarter earnings disappointment.
Albert Einstein: "Insanity is doing the same thing over and over again and expecting different results."
Monday, December 16, 2002
12/16/02 The S&P
Since 1950 the S&P has only fallen 12 times in December. So far this month the index is down 5%.
An increasing number of households experience home payments of 35% or more of their before-tax income. For most people that would mean their house payments cost half or more of their take-home income. That's including property taxes and insurance, but not maintenance and utilities.
Two-thirds of Americans desire to be vaccinatined against smallpox. According to studies done by the CDC in the 1960s, for every million vaccinations given, there will be one to two deaths; from 14 to 52 life-threatening reactions uncluding gangrene, encephalitis, and severe skin reactions; and from 500 to 900 other side effects such as rashes, fevers, and viral eruptions far from the vaccination site. Anyone harmed by the vaccine will have to sue the gov't.
According to a November survey of 852 companies, nearly 45% of New York area companies laid off employees in 2002 compared to 39% in the rest of the country. Nearly 28% of New York companies plan more layoffs in 2003, and 31% will continue with hiring freezes.
Chrysler says they no longer exp[ect 2003 to be a bit easier but rather that "competition will stay tough also next year."
Since 1950 the S&P has only fallen 12 times in December. So far this month the index is down 5%.
An increasing number of households experience home payments of 35% or more of their before-tax income. For most people that would mean their house payments cost half or more of their take-home income. That's including property taxes and insurance, but not maintenance and utilities.
Two-thirds of Americans desire to be vaccinatined against smallpox. According to studies done by the CDC in the 1960s, for every million vaccinations given, there will be one to two deaths; from 14 to 52 life-threatening reactions uncluding gangrene, encephalitis, and severe skin reactions; and from 500 to 900 other side effects such as rashes, fevers, and viral eruptions far from the vaccination site. Anyone harmed by the vaccine will have to sue the gov't.
According to a November survey of 852 companies, nearly 45% of New York area companies laid off employees in 2002 compared to 39% in the rest of the country. Nearly 28% of New York companies plan more layoffs in 2003, and 31% will continue with hiring freezes.
Chrysler says they no longer exp[ect 2003 to be a bit easier but rather that "competition will stay tough also next year."
Sunday, December 15, 2002
12/15/02 Tom Ridge And A Promise
When Tom Ridge was governor of Pennsylvania he promised that higher taxes would not result from increases in school pensions and easier eligibility standards for future retirees. So much for that promise. The Pennsylvania Public School Employees' Retirement System dropped $12 million per day or $4.4 billion in its latest budget year. Now trustees of the retirement system want to triple subsidies from Pennsylvania districts. In sum, that means homeowners will pay higher property taxes. I hope the money managers for the retirement system did not charge a fee for this fiasco. The stock market can be a costly venue.
In November there was a 2.3% gain in sales in furniture and other home-furnishings stores. The reason was simple- no money down, no interest, no payments for at least one year and, in most cases, 2 years. It's a page out of auto discounts. It's less the consumer buying but rather the retailer dumping inventory on a heavily discounted basis.
Accel Partners, a California-based venture capital firm, has waived its mangement fee until 2004. Typically, such a fee runs 2-2 1/2% of the assets managed.
An increasing number of drug companies have plants which no longer meet current sterility standards. This is part of the reason for persistent shortages of injected medications in hospitals.
When Tom Ridge was governor of Pennsylvania he promised that higher taxes would not result from increases in school pensions and easier eligibility standards for future retirees. So much for that promise. The Pennsylvania Public School Employees' Retirement System dropped $12 million per day or $4.4 billion in its latest budget year. Now trustees of the retirement system want to triple subsidies from Pennsylvania districts. In sum, that means homeowners will pay higher property taxes. I hope the money managers for the retirement system did not charge a fee for this fiasco. The stock market can be a costly venue.
In November there was a 2.3% gain in sales in furniture and other home-furnishings stores. The reason was simple- no money down, no interest, no payments for at least one year and, in most cases, 2 years. It's a page out of auto discounts. It's less the consumer buying but rather the retailer dumping inventory on a heavily discounted basis.
Accel Partners, a California-based venture capital firm, has waived its mangement fee until 2004. Typically, such a fee runs 2-2 1/2% of the assets managed.
An increasing number of drug companies have plants which no longer meet current sterility standards. This is part of the reason for persistent shortages of injected medications in hospitals.
Saturday, December 14, 2002
12/14/02 My Sigma Nu Experience
The Trent Lott furor brought up a memory. In my college sophomore year I joined Sigma Nu. I was foolishly unaware that the national charter prohibited allowing blacks into our chapter. Many weeks later this fact was brought out. I immediately called a meeting of all our brothers. It was late in the evening. I discussed my feelings on this discrimination, and pointed out that, had I known of this policy, I would not have joined in the first place. I said my alternatives were to resign or to implore the others here in the room to vote to have our chapter go local and leave the national Sigma Nu organization. The meeting went on for some time. Each person had the opportunity to voice his views. A vote was taken. We withdrew from the national organization. From that point onward our local fraternity( no longer called Sigma Nu) invited all minorities to join, and they did.
Michigan Governor-elect Jennifer Granholm said the state's financial picture is more bleak than she had thought, and deep budget cuts will be required. A $1.8 budget deficit looms in the coming fiscal year. Only school funding will be frozen. Caifornia's Davis would do well to learn from Granholm.
As N.YC. moves closer to a transit strike, a judge barred the transit workers from striking.
China has 8 million new urban job-seekers each year. It's a good thing China's economy is growing 7-8%. Their unemployment rate is 4%.
U.S. producer prices declined 0.4% in November. This was the largest drop since a similar decline in May. Deflation is not a rumor.
The Trent Lott furor brought up a memory. In my college sophomore year I joined Sigma Nu. I was foolishly unaware that the national charter prohibited allowing blacks into our chapter. Many weeks later this fact was brought out. I immediately called a meeting of all our brothers. It was late in the evening. I discussed my feelings on this discrimination, and pointed out that, had I known of this policy, I would not have joined in the first place. I said my alternatives were to resign or to implore the others here in the room to vote to have our chapter go local and leave the national Sigma Nu organization. The meeting went on for some time. Each person had the opportunity to voice his views. A vote was taken. We withdrew from the national organization. From that point onward our local fraternity( no longer called Sigma Nu) invited all minorities to join, and they did.
Michigan Governor-elect Jennifer Granholm said the state's financial picture is more bleak than she had thought, and deep budget cuts will be required. A $1.8 budget deficit looms in the coming fiscal year. Only school funding will be frozen. Caifornia's Davis would do well to learn from Granholm.
As N.YC. moves closer to a transit strike, a judge barred the transit workers from striking.
China has 8 million new urban job-seekers each year. It's a good thing China's economy is growing 7-8%. Their unemployment rate is 4%.
U.S. producer prices declined 0.4% in November. This was the largest drop since a similar decline in May. Deflation is not a rumor.
Friday, December 13, 2002
12/13/02 A Weak Dollar and New Highs For Gold And Natural Gas
Yesterday the dollar dropped to its lowest level vs the Euro since January 2000. If you have been reading this blog, you know I believe this weakness will persist.
Gold is approaching a 3 year high. It is exactly 2 1/2 years since I turned bearish on the stock market and bullish on gold.
Natural Gas is at a 19 month high with the lowest supplies since June 2001. This too has been forecast by me.
Jobless claims in the latest week rose 83,000 to 441,000, and represents a return to April layoff levels. That's quite a "soft spot".
AOL is laying off 300. You can expect more to come.
At the end of November GM, Ford, and Chrysler had an unsold inventory of 2 1/2 million cars. I feel confident that this figure can reach 3 million. We just have to be believers in their inept management. The Mojave desert awaits autos. The planes parked there need some company.
Western European car sales declined 6.2% in November.
The ECB lowered its forecast for growth in the dozen nations sharing the Euro to about 1% in 2003. That is a downward revision of 50%! Nexans, the world's largest maker of cables, had lower sales and will idle factories and layoff workers. Alcatel to do the same. Gemplus Int'l, the world's largest maker of smart cards. to layoff about 500 workers in France. Speaking of France, their industrial production dropped 0.6%, the most in a year.
Our money supply is growing but assets are falling(due to lower stock market values and rising personal and corporate bankruptcies). The adjusted monetary base has grown rapidly over the past two years. Upon further analysis, almost all of that growth is in cash! What has happened to those dollars- about 100 billion of them? They have for the most part left the U.S. and reside where the dollar is king. Even though the money supply has risen, the money has been exported and therefore inflation was not created. Should the Fed either monetize the U.S. debt and/or change bank reserve requirements, I suggest it would be a last resort move and not a solution.
I keep wondering. How many of those aforementioned dollars have gone to fund terrorist organizations?
Yesterday the dollar dropped to its lowest level vs the Euro since January 2000. If you have been reading this blog, you know I believe this weakness will persist.
Gold is approaching a 3 year high. It is exactly 2 1/2 years since I turned bearish on the stock market and bullish on gold.
Natural Gas is at a 19 month high with the lowest supplies since June 2001. This too has been forecast by me.
Jobless claims in the latest week rose 83,000 to 441,000, and represents a return to April layoff levels. That's quite a "soft spot".
AOL is laying off 300. You can expect more to come.
At the end of November GM, Ford, and Chrysler had an unsold inventory of 2 1/2 million cars. I feel confident that this figure can reach 3 million. We just have to be believers in their inept management. The Mojave desert awaits autos. The planes parked there need some company.
Western European car sales declined 6.2% in November.
The ECB lowered its forecast for growth in the dozen nations sharing the Euro to about 1% in 2003. That is a downward revision of 50%! Nexans, the world's largest maker of cables, had lower sales and will idle factories and layoff workers. Alcatel to do the same. Gemplus Int'l, the world's largest maker of smart cards. to layoff about 500 workers in France. Speaking of France, their industrial production dropped 0.6%, the most in a year.
Our money supply is growing but assets are falling(due to lower stock market values and rising personal and corporate bankruptcies). The adjusted monetary base has grown rapidly over the past two years. Upon further analysis, almost all of that growth is in cash! What has happened to those dollars- about 100 billion of them? They have for the most part left the U.S. and reside where the dollar is king. Even though the money supply has risen, the money has been exported and therefore inflation was not created. Should the Fed either monetize the U.S. debt and/or change bank reserve requirements, I suggest it would be a last resort move and not a solution.
I keep wondering. How many of those aforementioned dollars have gone to fund terrorist organizations?
Thursday, December 12, 2002
12/12/02 The Trojan
I believe the LA Times had a poor choice of words when characterizing USC's history of sometimes alienating Jews. It was entitled "Day of the Jewish Trojan." As a Jew, I find that an insult. I've never been a party to a trojan.
The LA Times also reports that CSX, of which John Snow has been chairman, didn't pay taxes in 2 out of the last 4 years. If I were a CSX stockholder, I'd be complaining about the 2 years where they did pay taxes.
The state of Washington complains that their tax structure wasn't designed for today's economy because the state doesn't tax groceries, medicine, airplane tickets, legal services, and electronic commerce. The state lawmakers are considering taxing legal, accounting, and engineering services. The Washington constitution bars all but a 1% flat income tax.
More layoffs on the way: Sarah Lee, Aetna Health, Charter Communications,Sprint, Netscape, Yahoo, Inhale Therapeutic, and the University of Illinois.
KMart to close 200-300 stores in January.
Intel's Andy Grove said it would be too optimistic to forecast a semiconductor rebound. What does he know? He only has been running the company for about 35 years!
Kimberly-Clark issued a 4th quarter profit warning due to diaper price wars. The company plans to cut costs by $175-200 million in 2003. Layoffs coming?
There are about 100 million individuals in North America who require cholesterol-lowering products. A recently published study in the British Journal of Nutrition stated that individuals who consume foods containing plant phytosterols enriched with chocolate had their LDL cholesterol reduced by 10%. Sounds good to me. Make mine Lindt orange chocolate.
The foreclosure rate in Northern California is rising.
In 1979 Paul Volcker, the new Fed chairman, decided on a different policy- no longer having the Fed target interest rates, but rather target a level of money supply growth consistent with price stability. The markets would determine the interest rates. As I have said so often, I believe the market does determine interest rates and not the Fed. Greenspan would not agree. In my view, with inflation and deflation in current balance, it would serve the economy well to focus on the optimum level of money supply growth and that focus could jumpstart our dismal economy.
The wagons are circling Trent Lott because he backed Bob Jones University despite its racial policy. Our problems are much bigger than that. Asa Hutchinson, the number 2 person behind Governor Ridge in our Homeland Security department, GRADUATED from Bob Jones University. I know about that university's policies thru the experience my son, Edward, had there. He didn't stay but a day or two.
I believe the LA Times had a poor choice of words when characterizing USC's history of sometimes alienating Jews. It was entitled "Day of the Jewish Trojan." As a Jew, I find that an insult. I've never been a party to a trojan.
The LA Times also reports that CSX, of which John Snow has been chairman, didn't pay taxes in 2 out of the last 4 years. If I were a CSX stockholder, I'd be complaining about the 2 years where they did pay taxes.
The state of Washington complains that their tax structure wasn't designed for today's economy because the state doesn't tax groceries, medicine, airplane tickets, legal services, and electronic commerce. The state lawmakers are considering taxing legal, accounting, and engineering services. The Washington constitution bars all but a 1% flat income tax.
More layoffs on the way: Sarah Lee, Aetna Health, Charter Communications,Sprint, Netscape, Yahoo, Inhale Therapeutic, and the University of Illinois.
KMart to close 200-300 stores in January.
Intel's Andy Grove said it would be too optimistic to forecast a semiconductor rebound. What does he know? He only has been running the company for about 35 years!
Kimberly-Clark issued a 4th quarter profit warning due to diaper price wars. The company plans to cut costs by $175-200 million in 2003. Layoffs coming?
There are about 100 million individuals in North America who require cholesterol-lowering products. A recently published study in the British Journal of Nutrition stated that individuals who consume foods containing plant phytosterols enriched with chocolate had their LDL cholesterol reduced by 10%. Sounds good to me. Make mine Lindt orange chocolate.
The foreclosure rate in Northern California is rising.
In 1979 Paul Volcker, the new Fed chairman, decided on a different policy- no longer having the Fed target interest rates, but rather target a level of money supply growth consistent with price stability. The markets would determine the interest rates. As I have said so often, I believe the market does determine interest rates and not the Fed. Greenspan would not agree. In my view, with inflation and deflation in current balance, it would serve the economy well to focus on the optimum level of money supply growth and that focus could jumpstart our dismal economy.
The wagons are circling Trent Lott because he backed Bob Jones University despite its racial policy. Our problems are much bigger than that. Asa Hutchinson, the number 2 person behind Governor Ridge in our Homeland Security department, GRADUATED from Bob Jones University. I know about that university's policies thru the experience my son, Edward, had there. He didn't stay but a day or two.
Wednesday, December 11, 2002
12/11/02 77% Of Americans Expect Unemployment To Rise In 2003
A quarterly survey by Philadelphia -based Right Management Consultants says one in five employees beleives there is a chance he or she will be laid off in 2003. In addition, laid-off workers believe it shall be difficult to find similar paying jobs.
Snow and ice are blamed for the 2.3% decline in retail sales last week. I always thought where there's a will there's a way. Maybe the will to shop is not overwhelming this holiday season.
Britain posted their biggest ever trade deficit. Falling exports created a deficit for October which was 30% larger than had been forecast.
According to a poll taken by the world's largest organization of CEOs, this country's small business CEOs say the economic forecast is unclear.
Kroger warns of a flat 2003. Schlumberger to lay off 3300 workers.
After more than 7 years of charging some of its customers $3 to talk to a human teller, Bank One Corp. is getting rid of this fee. Maybe the tellers are tongue-tied.
On the same day Jimmy Carter received the Nobel Peace Prize, scud missiles were found on a North Korean ship.
A quarterly survey by Philadelphia -based Right Management Consultants says one in five employees beleives there is a chance he or she will be laid off in 2003. In addition, laid-off workers believe it shall be difficult to find similar paying jobs.
Snow and ice are blamed for the 2.3% decline in retail sales last week. I always thought where there's a will there's a way. Maybe the will to shop is not overwhelming this holiday season.
Britain posted their biggest ever trade deficit. Falling exports created a deficit for October which was 30% larger than had been forecast.
According to a poll taken by the world's largest organization of CEOs, this country's small business CEOs say the economic forecast is unclear.
Kroger warns of a flat 2003. Schlumberger to lay off 3300 workers.
After more than 7 years of charging some of its customers $3 to talk to a human teller, Bank One Corp. is getting rid of this fee. Maybe the tellers are tongue-tied.
On the same day Jimmy Carter received the Nobel Peace Prize, scud missiles were found on a North Korean ship.
Tuesday, December 10, 2002
12/10/02 In November Insiders Sold $14 Worth Of Stock For Every $1 Purchased
This season is turning ugly and certainly not green. As expected, the market has topped out and there are few buyers for stocks at these overvalued levels. However, there are plenty of insiders selling. That selling is at a six month high. You can listen to the pundits who tell you to buy buy buy. Should you pay attention to the trend you will see lower highs and lower lows. This tells the story for the past 3 years. Stand in the way and blood will appear amongst your portfolio. Occasionally, opportunities will appear, and I will attempt to point out their potential for your review. Such was the case not so long ago with Merck at 39. It's now at 59. It is necessary to be patient and to pick your spots.
So far this month consumer sentiment has slumped to its lowest level of the year.
Nokia has lowered its sales forecast for the 4th quarter.
There are loudmouths who have stated that Paul O'Neill stayed in the way of economic growth. Those remarks reflect stupidity and irrationality. O'Neill is a capitalist and the vast proportion of his wealth was found in shares of Alcoa, the company he ran.
John Snow in 1995: "The budget deficit puts a hole in the pocket of every American, every day of our lives." Today the budget deficit resembles the size in 1995 but now Snow has elected to focus on tax cuts and job creation- in true salesman fashion. You get what you pay for.
More layoffs: at MCI, KPMG, Ashford.com, and Service Corp. The explanation for Service Corp is that they used to do the work in-house but now outsource it. The company is in the funeral business and operates cemetaries! Terminations take on a whole other meaning at Service Corp.
This season is turning ugly and certainly not green. As expected, the market has topped out and there are few buyers for stocks at these overvalued levels. However, there are plenty of insiders selling. That selling is at a six month high. You can listen to the pundits who tell you to buy buy buy. Should you pay attention to the trend you will see lower highs and lower lows. This tells the story for the past 3 years. Stand in the way and blood will appear amongst your portfolio. Occasionally, opportunities will appear, and I will attempt to point out their potential for your review. Such was the case not so long ago with Merck at 39. It's now at 59. It is necessary to be patient and to pick your spots.
So far this month consumer sentiment has slumped to its lowest level of the year.
Nokia has lowered its sales forecast for the 4th quarter.
There are loudmouths who have stated that Paul O'Neill stayed in the way of economic growth. Those remarks reflect stupidity and irrationality. O'Neill is a capitalist and the vast proportion of his wealth was found in shares of Alcoa, the company he ran.
John Snow in 1995: "The budget deficit puts a hole in the pocket of every American, every day of our lives." Today the budget deficit resembles the size in 1995 but now Snow has elected to focus on tax cuts and job creation- in true salesman fashion. You get what you pay for.
More layoffs: at MCI, KPMG, Ashford.com, and Service Corp. The explanation for Service Corp is that they used to do the work in-house but now outsource it. The company is in the funeral business and operates cemetaries! Terminations take on a whole other meaning at Service Corp.
Monday, December 09, 2002
12/9/02 John Snow
He was named the new Secretary of the Treasury. His background: Ph.D in economics; lawyer; Chairman of CSX; former Chairman of the Business Roundtable; and Ass't Secretary of Transportation in the Ford Administration when VP Cheney was chief of staff. Paul O'Neill may not have gotten along with the press and possibly he shot his mouth off when he shouldn't, but he is a straight shooter and not a politician. In addition, he was a very successful businessman. I hardly see where Mr. Snow is in Mr. O'Neill's league.
He was named the new Secretary of the Treasury. His background: Ph.D in economics; lawyer; Chairman of CSX; former Chairman of the Business Roundtable; and Ass't Secretary of Transportation in the Ford Administration when VP Cheney was chief of staff. Paul O'Neill may not have gotten along with the press and possibly he shot his mouth off when he shouldn't, but he is a straight shooter and not a politician. In addition, he was a very successful businessman. I hardly see where Mr. Snow is in Mr. O'Neill's league.
Sunday, December 08, 2002
12/8/02 Tis The Season To Cut Costs
Starting Monday for 20 business days HP is laying off contractors in its internal computer systems dept.
American Air asks employees for pay freeze and to cancel pay raises amounting to $130 million.
SunTrust Banks will freeze the salaries of, and won't pay annual bonuses to 130 senior executives. Additionally, a bonus program for 11,000 non-management employees will be permanently eliminated.
Microsoft VP Jim Allchin says that sharing information with competitors could damage national security. He should be a stand-up comic.
Used car prices continue to drop due to a glut of previously owned vehicles.
Will all this talk about further tax cuts make the cut or will it fail to materialize?
Landrieu wins Senate runoff in Louisiana.
Starting Monday for 20 business days HP is laying off contractors in its internal computer systems dept.
American Air asks employees for pay freeze and to cancel pay raises amounting to $130 million.
SunTrust Banks will freeze the salaries of, and won't pay annual bonuses to 130 senior executives. Additionally, a bonus program for 11,000 non-management employees will be permanently eliminated.
Microsoft VP Jim Allchin says that sharing information with competitors could damage national security. He should be a stand-up comic.
Used car prices continue to drop due to a glut of previously owned vehicles.
Will all this talk about further tax cuts make the cut or will it fail to materialize?
Landrieu wins Senate runoff in Louisiana.
Saturday, December 07, 2002
12/7/02 There Are Times For Cheer And Times To Cheer From The Sidelines
The jobless rate for November rose to 6% as non-farm payrolls declined by 40,000 workers. I have written often on this subject and shown statistically how the jobless number is understated. Only 62% of the U.S. population hold jobs. Total manufacturing employment is lower than any time since November 1961.
Even though Americans are paying off debt rather than taking on more debt, the ratio of household debt to the GDP is 77%.
November sales for retailers declined for the first time since 1970. Retailers are faced with deflation.
In Chicago's Cook County visits to food pantries over the past 11 months are up 18.6% over the same period a year ago and total 2 1/4 million visits to food-providing agencies.
Mexico has 100 million people, and more than half are considered impoverished. Only 15% can qualify for credit cards, car loans, and home loans.
Cessna to layoff 1500 workers.
McDonald's Japan expects over a 60% drop in pre-tax profits for 2002.
Paul O'Neill and Larry Lindsey resigned. They didn't create the current economic malaise.
Traditionally the holiday season is a cheery one for the market. Since Oct 9 we have had a terrific rally. That's the present for the holidays. Unfortunately, the times for cheer have ended, and now is the time to cheer from the sidelines. I suggest once again to lighten up on stock positions, and thereby reduce your risk exposure. With limited business investment, consumer spending being harnessed, the jobless rate increasing, a murky economic horizon, and declining prices for goods, it is rational to expect an economy with few bright spots. As investors, the risk reward ratio is not in your favor.
The jobless rate for November rose to 6% as non-farm payrolls declined by 40,000 workers. I have written often on this subject and shown statistically how the jobless number is understated. Only 62% of the U.S. population hold jobs. Total manufacturing employment is lower than any time since November 1961.
Even though Americans are paying off debt rather than taking on more debt, the ratio of household debt to the GDP is 77%.
November sales for retailers declined for the first time since 1970. Retailers are faced with deflation.
In Chicago's Cook County visits to food pantries over the past 11 months are up 18.6% over the same period a year ago and total 2 1/4 million visits to food-providing agencies.
Mexico has 100 million people, and more than half are considered impoverished. Only 15% can qualify for credit cards, car loans, and home loans.
Cessna to layoff 1500 workers.
McDonald's Japan expects over a 60% drop in pre-tax profits for 2002.
Paul O'Neill and Larry Lindsey resigned. They didn't create the current economic malaise.
Traditionally the holiday season is a cheery one for the market. Since Oct 9 we have had a terrific rally. That's the present for the holidays. Unfortunately, the times for cheer have ended, and now is the time to cheer from the sidelines. I suggest once again to lighten up on stock positions, and thereby reduce your risk exposure. With limited business investment, consumer spending being harnessed, the jobless rate increasing, a murky economic horizon, and declining prices for goods, it is rational to expect an economy with few bright spots. As investors, the risk reward ratio is not in your favor.
Friday, December 06, 2002
12/6/02 Soft Retail Results And More Holiday Layoffs
Target's November same-store sales down 6.7%; Kohl's drops 3.4%; and Sears plummets 10.9%.
Humana to cut 2300 jobs. Convergys to layoff 950. Investment Technology Group to reduce workforce by 10%. We are still waiting for AOL to say what their layoff number shall be.
Gateway Computer said weaker than expected holiday season results puts the 4th quarter expectations at risk.
GM is increasing discounts on SUVs and trucks in an attempt to get rid of excess inventory. Cutting production would help.
In the third quarter household debt increased at a 9.6% rate and was the fastest since the 4th quarter of 1989. This is one of the reasons I have stated consumer spending will slow down from an unsustainable level.
The ECB cut rates by a 1/2 point to 2 3/4%. It was the first cut in one year. Within the 12 countries comprising the EU, unemployment hovers around 8 1/2% and retail sales remain on a downward slope. Business investment remains weak. Consumer conffidence is at a 5 year low. Bankruptcies are on the rise. It sounds similar to conditions in the U.S.
Target's November same-store sales down 6.7%; Kohl's drops 3.4%; and Sears plummets 10.9%.
Humana to cut 2300 jobs. Convergys to layoff 950. Investment Technology Group to reduce workforce by 10%. We are still waiting for AOL to say what their layoff number shall be.
Gateway Computer said weaker than expected holiday season results puts the 4th quarter expectations at risk.
GM is increasing discounts on SUVs and trucks in an attempt to get rid of excess inventory. Cutting production would help.
In the third quarter household debt increased at a 9.6% rate and was the fastest since the 4th quarter of 1989. This is one of the reasons I have stated consumer spending will slow down from an unsustainable level.
The ECB cut rates by a 1/2 point to 2 3/4%. It was the first cut in one year. Within the 12 countries comprising the EU, unemployment hovers around 8 1/2% and retail sales remain on a downward slope. Business investment remains weak. Consumer conffidence is at a 5 year low. Bankruptcies are on the rise. It sounds similar to conditions in the U.S.
Thursday, December 05, 2002
12/5/02 The Market Is Long On Soot And Short On Growth
Cisco to continue job cuts. The company is expected to report flat or slightly lower revenue for the quarter ending in January and possibly a further drop in the April quarter.
AOL will announce job cuts and says their rebound not likely until 2004.
Bankruptcy looms for UAL and American Air cuts 1100 flight attendants.
Federated Dept Stores November same-store sales fell 7.4% and December now looks down about 2%.
RJ Reynolds to reduce its workforce by 8% and earnings to be below estimates.
Full-time jobs in private businesses are down 279,000 so far this year. Since January 2001 corporations have slashed about 3 1/2 million jobs. Payroll cuts this year have averaged 121,000 per month. Job openings are down about 7 1/2% from one year ago. Businesses remain reluctant to hire permanent workers.
The ECB will cut rates today. Everyone in Europe is excited and downing a brew at the local pub. Before anyone gets too drunk with joy they might consider that the jobless rate in Germany rose in November to 10%, and that's the highest rate in more than 4 years. There are almost 4 1/4 million Germans out of work.
A further reality check reveals that the EU says the GDP of European economies may fall in the first quarter. The only other contraction since the 1993 recession was in the last quarter of 2001. In addition, it was stated that 2002 would end negatively. The 12 countries making up the EU have a combined GDP of $7 trillion.
Life is a compilation of choices, and that goes for investing. I feel strongly that during this holiday season my readers would be best served by having an eggnog latte and laying off stocks. The big sucking noise you hear is not the foam from the expresso machine. It's the followers buying stocks who are about to be sucked down the chimney. Those individuals will be long on soot and short on capital.
Cisco to continue job cuts. The company is expected to report flat or slightly lower revenue for the quarter ending in January and possibly a further drop in the April quarter.
AOL will announce job cuts and says their rebound not likely until 2004.
Bankruptcy looms for UAL and American Air cuts 1100 flight attendants.
Federated Dept Stores November same-store sales fell 7.4% and December now looks down about 2%.
RJ Reynolds to reduce its workforce by 8% and earnings to be below estimates.
Full-time jobs in private businesses are down 279,000 so far this year. Since January 2001 corporations have slashed about 3 1/2 million jobs. Payroll cuts this year have averaged 121,000 per month. Job openings are down about 7 1/2% from one year ago. Businesses remain reluctant to hire permanent workers.
The ECB will cut rates today. Everyone in Europe is excited and downing a brew at the local pub. Before anyone gets too drunk with joy they might consider that the jobless rate in Germany rose in November to 10%, and that's the highest rate in more than 4 years. There are almost 4 1/4 million Germans out of work.
A further reality check reveals that the EU says the GDP of European economies may fall in the first quarter. The only other contraction since the 1993 recession was in the last quarter of 2001. In addition, it was stated that 2002 would end negatively. The 12 countries making up the EU have a combined GDP of $7 trillion.
Life is a compilation of choices, and that goes for investing. I feel strongly that during this holiday season my readers would be best served by having an eggnog latte and laying off stocks. The big sucking noise you hear is not the foam from the expresso machine. It's the followers buying stocks who are about to be sucked down the chimney. Those individuals will be long on soot and short on capital.
Wednesday, December 04, 2002
12/4/02 Posting #2 Closing The Crown Jewel, A Personal Blog
As readers of this daily blog, you aware that I successfully ran the Holly Sugar Company from December, 1981 until its sale in the Spring of 1988 to the Imperial Sugar Company. During that timeframe our stockholders received the 7th largest annual return of all the thousands of publically traded stocks in the U.S. Today it was announced that Imperial Sugar will be shutting down its crown jewel Houston sugar refinery and laying off 326 people. The plant has been running continuously since 1843, and has been the oldest continuing business in the Houston area and possibly the entire state of Texas. Pointing fingers will not make the company profitable and will not reopen all the plants which have been closed. Jobs have been lost forever and farmers have turned to other crops or sold their land. Only winners provide progress.
As readers of this daily blog, you aware that I successfully ran the Holly Sugar Company from December, 1981 until its sale in the Spring of 1988 to the Imperial Sugar Company. During that timeframe our stockholders received the 7th largest annual return of all the thousands of publically traded stocks in the U.S. Today it was announced that Imperial Sugar will be shutting down its crown jewel Houston sugar refinery and laying off 326 people. The plant has been running continuously since 1843, and has been the oldest continuing business in the Houston area and possibly the entire state of Texas. Pointing fingers will not make the company profitable and will not reopen all the plants which have been closed. Jobs have been lost forever and farmers have turned to other crops or sold their land. Only winners provide progress.
12/4/02 Corporate Bad News
Ford's U.S. vehicle sales fell 20% in November, and they announced production cuts (which my blog predicted 2 weeks ago). HP trimmed their revenue forecast for next year and said technology spending remains tepid (like we needed them to tell us that). Walt Disney issued another profit warning. Tenet Healthcare issued a profit warning for the next two years. Bridgestone cut their profit forecast by a mere 43%.
Now for the good news. Home prices in the UK rose 24% and 25 1/2% on an annualized basis for October and November respectively. As in the U.S., their inflated housing prices have provided a foundation for consumer spending.
Ann Abraham, the Bbritish parliamentary ombudsman, ruled the ministry had "withheld three documents related to reported sightings of unexplained areial phenomena in 1980- the Rendlesham Forest UFO incident." Ms Abraham didn't reveal that the UFO's ultimate goal was the delivery of double digit inflation and 20% interest rates to the U.S. during Carter's presidency.
Ford's U.S. vehicle sales fell 20% in November, and they announced production cuts (which my blog predicted 2 weeks ago). HP trimmed their revenue forecast for next year and said technology spending remains tepid (like we needed them to tell us that). Walt Disney issued another profit warning. Tenet Healthcare issued a profit warning for the next two years. Bridgestone cut their profit forecast by a mere 43%.
Now for the good news. Home prices in the UK rose 24% and 25 1/2% on an annualized basis for October and November respectively. As in the U.S., their inflated housing prices have provided a foundation for consumer spending.
Ann Abraham, the Bbritish parliamentary ombudsman, ruled the ministry had "withheld three documents related to reported sightings of unexplained areial phenomena in 1980- the Rendlesham Forest UFO incident." Ms Abraham didn't reveal that the UFO's ultimate goal was the delivery of double digit inflation and 20% interest rates to the U.S. during Carter's presidency.
Tuesday, December 03, 2002
12/3/02 Merrill Lynch Suggests Investors Reduce Their Equity Exposure
Merrill Lynch believes "the market still appears speculative...such speculation is typically indicative of the end of a market cycle, and not the beginning of a major bull market." They go on to say that it is extremely difficult to forecast corporate growth, and therefore, equities should have lower valuations. These comments should certainly be familiar to anyone who has been reading this blog.
Retailers must make up in volume what they lose in smaller profit margins. Consumers respond to advertised promotions. Talking about promotions, why not do away with rebates and just lower the price? A real sale should not have strings attached to it. When you go bargain hunting, it's wise to feel certain that you are receiving value. With stocks the idea is to buy a dollar of value for no more than 50 cents. Please avoid the fool's gold.
Merrill Lynch believes "the market still appears speculative...such speculation is typically indicative of the end of a market cycle, and not the beginning of a major bull market." They go on to say that it is extremely difficult to forecast corporate growth, and therefore, equities should have lower valuations. These comments should certainly be familiar to anyone who has been reading this blog.
Retailers must make up in volume what they lose in smaller profit margins. Consumers respond to advertised promotions. Talking about promotions, why not do away with rebates and just lower the price? A real sale should not have strings attached to it. When you go bargain hunting, it's wise to feel certain that you are receiving value. With stocks the idea is to buy a dollar of value for no more than 50 cents. Please avoid the fool's gold.
Monday, December 02, 2002
Sunday, December 01, 2002
12/1/02 Download This
Originally the main function of the internet was to share and disseminate information. That still remains true but with an added feature- the downloading of shareware and/or freeware. The latter has had a significant impact on cash flow for many industries. Consider the music industry with CDs and other entertainment arenas. Recently, I learned of download.com and its freeware for games, such as, a game named drugwars. The point is simple. More and more revenue avenues are being closed via free access on the internet. This will, in my view, grow in importance over the years and impact profits.
Originally the main function of the internet was to share and disseminate information. That still remains true but with an added feature- the downloading of shareware and/or freeware. The latter has had a significant impact on cash flow for many industries. Consider the music industry with CDs and other entertainment arenas. Recently, I learned of download.com and its freeware for games, such as, a game named drugwars. The point is simple. More and more revenue avenues are being closed via free access on the internet. This will, in my view, grow in importance over the years and impact profits.
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