2/6/03 The Trend
A month does not go by that I don't remind my readers to make the trend your friend. That's true of the market and also in business. We can learn from companies that do the opposite.
Let's look at Cisco. One money manager recently stated that "Cisco owns the market and they can still afford to charge the premium for the nameplate." How wrong he is. First, the customer cannot afford the premium for the nameplate. Second, Cisco only owns the high end of their market, and that sector is not growing. In fact, it is contracting. Another money manager said "Cisco still believes that price is still not the key issue in the marketplace." Maybe not three years ago, but price is very much a factor today, and the trend is towards saving money on less expensive equipment. For example, Conneticut's Naugatuck Valley Community College replaced Cisco equipment with 28 data switches from Hewlett-Packard and saved $80,000 or 40% over what Cisco would have charged. The savings get greater when we discuss the wins the Chinese manufacturers have provided to their customers. Cisco will pay dearly for ignoring the growing trend to price as a determining factor. The stockholders continue to pay. Cisco stock has dropped over 30% in the past year alone.
It is expected that the U.S. debt limit, currently $6.4 trillion, will be hit Feb. 20. I touched on this subject some weeks back. Now we are two weeks away from the government running out of money. The Congress should not provide a near-term fix to this problem without a plan carved in stone which reduces government expenditures by at least 5%, and that includes providing for funds for Iraq, N. Korea, and all points on the globe! They can start by rescinding the pay raise for all government workers, and then deep cuts in staff members should be included for all members of Congress as well as White House staff. Maybe then the right hand will know what the left hand is doing.
Since the slowdown started in the Silicon Valley, 130,000 jobs have been lost. To put it in perspective, that's the population of Berkeley, Ca.
Last week economic conditions took its toll on the law firm, Brobeck, Phleger and Harrison. This week San Jose-based Skjerven Morrill fell victim. The latter had been in the Silicon Valley for 26 years and specialized in intellectual property disputes. Maybe with less money for R&D, there's less intellectual property. Or maybe the intellectuals have left California and moved to a more tax friendly state- like Ted Turner.
Not all technology companies are in the soup. There's a small, privately-owned company in Bellevue, Wa called AskMe. Last year they doubled revenue, became profitable, and tripled its number of customers( Proctor & Gamble, Ford, Honeywell, Boeing, Network Appliance). The company builds Employee Knowledge Networks and collates information from HR databases, manuals, and case studies written by employees and provides the mechanism by which employees find answers to questions and thus reduce the time employees expend in spinning their wheels in utter frustration. Unlike most other software companies, AskMe is hiring.
Wednesday, February 05, 2003
2/5/03 Forest Fires
I read an article recently about the Silicon Valley, and an analogy was brought out with respect to forest fires. It was suggested that periodic fires burning underbrush and weaker trees renew the entire forest region, and thus it was explained, allow it to grow and spread again. There wasn't any mention of greed, lack of managerial skills, and China. I suggest they burn the newspaper that printed this article which insults the intelligence of those feeling pain in the Silicon Valley. There are huge amounts of talented individuals without jobs and with little hope of getting a job. I have previously mentioned that one sixth of the area's space is comprised of vacant office buildings etc. There is real hurt there, and re-growth is not around the corner. Retrenchment will be the call for a long long time.
Take Cisco. Please! No one cares that their earnings improved for the past quarter. Their sales were down and Chambers said customers are even more cautious than they were at the beginning of the second quarter, and forecast another possible dip for this period. He sees no quick upturn for tech spending. He's not alone in this view.
Ted Turner will be making a move to Florida near Tallahassee for tax reasons. Florida hasn't any personal state income tax. When and if he sells his AOL stock, that will save him a wad of cash. Good for him.
AIG raises their liability reserves by $2.8 billion.
Germany's unemployment rate rose to a 5 year high.
Once again the dollar is nearing a new 4 year low vs the euro.
Senator Kent Conrad, D-N.D. "the president is taking us into an absolute swamp of deficit and debt...unparalleled in our nation's history." What would someone from ND know from swamps?
There were 132,000 job cuts in January. That's one soft patch.
Blix warns Iraq "it is five minutes to midnight." Does he really think Saddam gives a crap about the time? A little insight into Blix came when he stated "we do not have the same determination on substance as we have on process." I wonder whether he is thinking of dual citizenship and tossing his hat in the ring as a democratic candidate for president. They'll love this guy in NH. There they might be keen on processing rather than the process itself.
I read an article recently about the Silicon Valley, and an analogy was brought out with respect to forest fires. It was suggested that periodic fires burning underbrush and weaker trees renew the entire forest region, and thus it was explained, allow it to grow and spread again. There wasn't any mention of greed, lack of managerial skills, and China. I suggest they burn the newspaper that printed this article which insults the intelligence of those feeling pain in the Silicon Valley. There are huge amounts of talented individuals without jobs and with little hope of getting a job. I have previously mentioned that one sixth of the area's space is comprised of vacant office buildings etc. There is real hurt there, and re-growth is not around the corner. Retrenchment will be the call for a long long time.
Take Cisco. Please! No one cares that their earnings improved for the past quarter. Their sales were down and Chambers said customers are even more cautious than they were at the beginning of the second quarter, and forecast another possible dip for this period. He sees no quick upturn for tech spending. He's not alone in this view.
Ted Turner will be making a move to Florida near Tallahassee for tax reasons. Florida hasn't any personal state income tax. When and if he sells his AOL stock, that will save him a wad of cash. Good for him.
AIG raises their liability reserves by $2.8 billion.
Germany's unemployment rate rose to a 5 year high.
Once again the dollar is nearing a new 4 year low vs the euro.
Senator Kent Conrad, D-N.D. "the president is taking us into an absolute swamp of deficit and debt...unparalleled in our nation's history." What would someone from ND know from swamps?
There were 132,000 job cuts in January. That's one soft patch.
Blix warns Iraq "it is five minutes to midnight." Does he really think Saddam gives a crap about the time? A little insight into Blix came when he stated "we do not have the same determination on substance as we have on process." I wonder whether he is thinking of dual citizenship and tossing his hat in the ring as a democratic candidate for president. They'll love this guy in NH. There they might be keen on processing rather than the process itself.
Tuesday, February 04, 2003
2/4/03 20 Inches
Come on now. Let's not go there. This is not an x-rated blog! I'm talking the Columbia. A 20 inch piece of insulation weighing 2.67 pounds peeled off a spot where the orbiter is coupled to the external tank. It was this insulating foam which struck Columbia's left wing during takeoff. Tile damage from insulation had never been a prior a problem, and hence, not considered by NASA engineers.
After 64 days the Venezuelan oil strike is sort of over. Let's say it's fading.
With the consumer's weekend focus on the Columbia tragedy, retail sales at U.S. chain stores were down for the latest week.
American Airlines is burning thru $5 million per day. How long can that continue? The company has $2 billion in unrestricted cash on the balance sheet.
Georgia is set to lose 9000 jobs in 2003. During the past two years the state has lost 123,000 jobs.
Organizers of the Comdex computer trade show filed for chapter 11.
Gold is trading at a 7 year high.
Ericcson's losses widened in the quarter.
Germany's three largest banks will post their first yearly losses since WW II.
U.S. auto sales dropped in January.
The January ISM index dropped from the December level.
For all of you romantics with France on your mind, France's consumer sentiment is at a 5 year low and their unemployment rate is above 9%. France's pension system is shortly to be in a deficit position as the number of retirees swells.
Jean-Pascal Beaufret, Alcatel Sa CFO, "2003 will be a difficult year." Alcatel is eliminating 40% of their workforce!
Does anyone consider how little print coverage there is of the Fed? Greenspan had been on every front page of every newspaper and magazine. He's still very much alive. As I have said so often, the Fed is not the marketplace. The latter is king and not the Fed. Maybe Greenspan will retire to France and wow their economic system.
Come on now. Let's not go there. This is not an x-rated blog! I'm talking the Columbia. A 20 inch piece of insulation weighing 2.67 pounds peeled off a spot where the orbiter is coupled to the external tank. It was this insulating foam which struck Columbia's left wing during takeoff. Tile damage from insulation had never been a prior a problem, and hence, not considered by NASA engineers.
After 64 days the Venezuelan oil strike is sort of over. Let's say it's fading.
With the consumer's weekend focus on the Columbia tragedy, retail sales at U.S. chain stores were down for the latest week.
American Airlines is burning thru $5 million per day. How long can that continue? The company has $2 billion in unrestricted cash on the balance sheet.
Georgia is set to lose 9000 jobs in 2003. During the past two years the state has lost 123,000 jobs.
Organizers of the Comdex computer trade show filed for chapter 11.
Gold is trading at a 7 year high.
Ericcson's losses widened in the quarter.
Germany's three largest banks will post their first yearly losses since WW II.
U.S. auto sales dropped in January.
The January ISM index dropped from the December level.
For all of you romantics with France on your mind, France's consumer sentiment is at a 5 year low and their unemployment rate is above 9%. France's pension system is shortly to be in a deficit position as the number of retirees swells.
Jean-Pascal Beaufret, Alcatel Sa CFO, "2003 will be a difficult year." Alcatel is eliminating 40% of their workforce!
Does anyone consider how little print coverage there is of the Fed? Greenspan had been on every front page of every newspaper and magazine. He's still very much alive. As I have said so often, the Fed is not the marketplace. The latter is king and not the Fed. Maybe Greenspan will retire to France and wow their economic system.
Monday, February 03, 2003
2/3/03 Economic Debris Sheds Over The U.S.
I had planned to write on this subject yesterday; however, the Columbia tragedy took center stage, and rightly so. Just to set the record straight, I have been up all night, but that doesn't mean I'm cranky. I'm not a moody guy. I don't like it when others insult our intelligence and think it's business as usual.
I'm referring to the $2.23 trillion budget which the President plans to present to Congress. Think about this. Who has a budget of that size for a $10 trillion GDP? Remember please the consumer- that's us- is responsible for at least two-thirds of the GDP. Then healthcare represents another 15%. Those two numbers amount to about $8.2 trillion, and the latter subtracted from $10 trillion leaves only $1.8 trillion. Of the $1.8 trillion a good deal is comprised of services. As you can see, the government essentially generates no GDP. So what are we getting for that $2.23 trillion? Essentially protection via our military. The rest goes to support government agencies and/or appendages. We could eliminate two-thirds of the latter, and not miss a thing. Maybe then we wouldn't expect to see budget deficits for the next ten years. At least that's what the budget office is projecting. Their projections are so pathetic that they are an embarrassment. In fact, this budget is an embarrassment. It is worthless debris scattered over the American public's checkbooks. Wake up and smell the spending. It's rancid. This excessive spending is undermining our sovereignty and our homeland security. Unleashed government spending is a weapon of mass destruction!
I had planned to write on this subject yesterday; however, the Columbia tragedy took center stage, and rightly so. Just to set the record straight, I have been up all night, but that doesn't mean I'm cranky. I'm not a moody guy. I don't like it when others insult our intelligence and think it's business as usual.
I'm referring to the $2.23 trillion budget which the President plans to present to Congress. Think about this. Who has a budget of that size for a $10 trillion GDP? Remember please the consumer- that's us- is responsible for at least two-thirds of the GDP. Then healthcare represents another 15%. Those two numbers amount to about $8.2 trillion, and the latter subtracted from $10 trillion leaves only $1.8 trillion. Of the $1.8 trillion a good deal is comprised of services. As you can see, the government essentially generates no GDP. So what are we getting for that $2.23 trillion? Essentially protection via our military. The rest goes to support government agencies and/or appendages. We could eliminate two-thirds of the latter, and not miss a thing. Maybe then we wouldn't expect to see budget deficits for the next ten years. At least that's what the budget office is projecting. Their projections are so pathetic that they are an embarrassment. In fact, this budget is an embarrassment. It is worthless debris scattered over the American public's checkbooks. Wake up and smell the spending. It's rancid. This excessive spending is undermining our sovereignty and our homeland security. Unleashed government spending is a weapon of mass destruction!
Sunday, February 02, 2003
2/2/03 Someone Always Has It Worse Than You
The same Ames, Iowa couple who lost their son in the 911 terrorist attack on the World Trade Center mourn the death of their niece, Astronaut Laurel Clark, one of seven astronauts on board Columbia. Whether it was a heat problem, a tile problem, or a wing problem that is the cause, I would like to believe that this country does not require a tragedy to reflect on the value of life. To put matters in perspective, Ilan Ramon's Torah scroll survived the Auschwitz concentration camp, but it was destroyed in the Columbia explosion.
Don Nelson, a longtime NASA supervisor and mission planner going back to the first lunar missions, left NASA four years ago because of grave concerns about its safety program. In August he wrote to President Bush saying it was his "duty to inform you that our space shuttle astronauts are in eminent danger. Your intervention is required to prevent another catastrophic shuttle accident." He received a December 4 reply from the director of the Office of Science and Technology which stated that "NASA places a high priority on safety and has instituted a program of developing and implementing safety upgrades to reduce the risk to space shuttle crews." On December 21 Nelson replied with another letter to the White House and said "I assume that you are aware there never has been a launch vehicle that has not had multiple catastrophic failures."
As we learned yesterday, it only takes one overwhelming failure to produce a national mourning for our space heroes.
The same Ames, Iowa couple who lost their son in the 911 terrorist attack on the World Trade Center mourn the death of their niece, Astronaut Laurel Clark, one of seven astronauts on board Columbia. Whether it was a heat problem, a tile problem, or a wing problem that is the cause, I would like to believe that this country does not require a tragedy to reflect on the value of life. To put matters in perspective, Ilan Ramon's Torah scroll survived the Auschwitz concentration camp, but it was destroyed in the Columbia explosion.
Don Nelson, a longtime NASA supervisor and mission planner going back to the first lunar missions, left NASA four years ago because of grave concerns about its safety program. In August he wrote to President Bush saying it was his "duty to inform you that our space shuttle astronauts are in eminent danger. Your intervention is required to prevent another catastrophic shuttle accident." He received a December 4 reply from the director of the Office of Science and Technology which stated that "NASA places a high priority on safety and has instituted a program of developing and implementing safety upgrades to reduce the risk to space shuttle crews." On December 21 Nelson replied with another letter to the White House and said "I assume that you are aware there never has been a launch vehicle that has not had multiple catastrophic failures."
As we learned yesterday, it only takes one overwhelming failure to produce a national mourning for our space heroes.
Saturday, February 01, 2003
2/1/03 Is January Really Over?
For the month of January The Dow dropped 3.5%, the S&P 2.7%, and the Nasdaq 1.1%. Unfortunately, for the most part, it is fair to state as January goes so goes the rest of the year. Yale Hirsch's statistics show that since 1950 the month of January has been the accurate barometer for the remainder of the yesr 92% of the time! There have been only four misses, and I don't believe for one minute that 2003 will be the fifth. I recommend that you plan accordingly, and make the trend your friend and place the percentages in your corner.
The other day I commented on the GDP fourth quarter numbers. I would like to elaborate. Government spending in this quarter rose sharply. Had that not been the case, the GDP number would have been a negative one. I feel very strongly that the government cannot spend our way out of a recession(yes, we are in a recession) and, if they are not prudent, can spend our way into something much more serious.
For the month of January The Dow dropped 3.5%, the S&P 2.7%, and the Nasdaq 1.1%. Unfortunately, for the most part, it is fair to state as January goes so goes the rest of the year. Yale Hirsch's statistics show that since 1950 the month of January has been the accurate barometer for the remainder of the yesr 92% of the time! There have been only four misses, and I don't believe for one minute that 2003 will be the fifth. I recommend that you plan accordingly, and make the trend your friend and place the percentages in your corner.
The other day I commented on the GDP fourth quarter numbers. I would like to elaborate. Government spending in this quarter rose sharply. Had that not been the case, the GDP number would have been a negative one. I feel very strongly that the government cannot spend our way out of a recession(yes, we are in a recession) and, if they are not prudent, can spend our way into something much more serious.
Friday, January 31, 2003
1/31/03 The Fed
The December minutes of the Fed meeting revealed that partial justification for holding rates steady at that time was the market's late year rally. Using that thinking, then rates should have been lowered on Wednesday. The rally was wiped out by recent losses.
Ray Owens, vice president and senior economist at the Federal Reserve Bank in Richmond, Va said "people reading the economic tea leaves should be encouraged by strong consumer confidence." He must be on ecstasy tea leaves.
Dow Chemical cuts 4000 jobs.
Boeing's profits seen dropping in 2003.
Nikkei at a 20 year low.
eMarketer says the auto industry will account for 27% of all B2B e-commerce transactions by 2004.
According to a study prepared by Dell'Oro Group, global sales of routers will decline for the third consecutive year in 2003, and are forecast to fall 2%.
The December minutes of the Fed meeting revealed that partial justification for holding rates steady at that time was the market's late year rally. Using that thinking, then rates should have been lowered on Wednesday. The rally was wiped out by recent losses.
Ray Owens, vice president and senior economist at the Federal Reserve Bank in Richmond, Va said "people reading the economic tea leaves should be encouraged by strong consumer confidence." He must be on ecstasy tea leaves.
Dow Chemical cuts 4000 jobs.
Boeing's profits seen dropping in 2003.
Nikkei at a 20 year low.
eMarketer says the auto industry will account for 27% of all B2B e-commerce transactions by 2004.
According to a study prepared by Dell'Oro Group, global sales of routers will decline for the third consecutive year in 2003, and are forecast to fall 2%.
Thursday, January 30, 2003
1/30/03 Sphere Sovereignty
The above words mean decisions should be made whenever and wherever possible at the level closest to those affected by the decision. Unelected and unaccountable government employees ahould not be decision makers for healthcare reform. Consumers must be empowered to have expanded not limited choice. The Federal Employees Health Benefits Program (FEHBP) covers Congress, the White House staff, the federal judiciary, the U.S. postal service, and 9 million federal workers, retirees, and their dependents. It has been mostly successful and quite costly. The taxpayers have been paying for FEHBP. Healthcare must available for all, cost effective, and with on-going choice. Naturally, that's quite a task. So is making available an anti-aids drug cocktail for less than $1 per patient per day. India's Cipla accomplishes that feat, and it's something with which I am quite knowledgeable.
The GDP grew at a 0.7% rate in last year's 4th quarter. Consumer spending increased at a 1% rate for that period- the weakest since the 1st quarter of 1993. There was a 7.3% drop in spending on durable goods, such as, autos, and that was the biggest drop in about 12 years. However, government spending rose at a 4.6% annual rate, and this reflects an increased size and scope of governemnt. Bush campaigned on the theme "my opponent trust goverment, I trust you." With the growing loss of personal freedoms and the lack of fiscal responsibility, I don't believe that campaign slogan could be made today.
Jobless claims pick up again.
Disney's Eisner got a $5 million bonus in 2002. Meanwhile, the Disney stockholders lost their shirts.
Goodyear may trim their workforce.
The 2 month oil strike in Venezuela has forced at least 25,000 companies to go out of business.
Last year Florida's exports to its key Latin American trading partners fell by 25% or almost $4 billion.
Bank One to cut 700 jobs in Chicago.
GM has a 165 day supply of the Saturn LS at its plant in Wilmington, Del. That's double the norm. Chrysler's PT Cruiser has 125 days of inventory. The Ford Focus, Thunderbird, and Mustang have high inventory numbers. The Crown Victoria and the Chevy Astro are seriously overstocked. The list goes on and on. You can expect plant downtimes and lower prices for many vehicles as well as greater incentives. Auto profits will be lower.
Publilius Syrus: "Never promise more than you can perform."
The above words mean decisions should be made whenever and wherever possible at the level closest to those affected by the decision. Unelected and unaccountable government employees ahould not be decision makers for healthcare reform. Consumers must be empowered to have expanded not limited choice. The Federal Employees Health Benefits Program (FEHBP) covers Congress, the White House staff, the federal judiciary, the U.S. postal service, and 9 million federal workers, retirees, and their dependents. It has been mostly successful and quite costly. The taxpayers have been paying for FEHBP. Healthcare must available for all, cost effective, and with on-going choice. Naturally, that's quite a task. So is making available an anti-aids drug cocktail for less than $1 per patient per day. India's Cipla accomplishes that feat, and it's something with which I am quite knowledgeable.
The GDP grew at a 0.7% rate in last year's 4th quarter. Consumer spending increased at a 1% rate for that period- the weakest since the 1st quarter of 1993. There was a 7.3% drop in spending on durable goods, such as, autos, and that was the biggest drop in about 12 years. However, government spending rose at a 4.6% annual rate, and this reflects an increased size and scope of governemnt. Bush campaigned on the theme "my opponent trust goverment, I trust you." With the growing loss of personal freedoms and the lack of fiscal responsibility, I don't believe that campaign slogan could be made today.
Jobless claims pick up again.
Disney's Eisner got a $5 million bonus in 2002. Meanwhile, the Disney stockholders lost their shirts.
Goodyear may trim their workforce.
The 2 month oil strike in Venezuela has forced at least 25,000 companies to go out of business.
Last year Florida's exports to its key Latin American trading partners fell by 25% or almost $4 billion.
Bank One to cut 700 jobs in Chicago.
GM has a 165 day supply of the Saturn LS at its plant in Wilmington, Del. That's double the norm. Chrysler's PT Cruiser has 125 days of inventory. The Ford Focus, Thunderbird, and Mustang have high inventory numbers. The Crown Victoria and the Chevy Astro are seriously overstocked. The list goes on and on. You can expect plant downtimes and lower prices for many vehicles as well as greater incentives. Auto profits will be lower.
Publilius Syrus: "Never promise more than you can perform."
Wednesday, January 29, 2003
1/29/03 Only 5%
General MacArthur: "Expect only 5% of an intelligence report to be accurate. The trick of a good commander is to isolate the 5%."
That 5% maybe missing in the Bush healthcare plan. It requires senior citizens to enroll in HMOs. The problem- HMOs aren't available in many rural states, such as, Iowa. Medicare currently does not cover any outpatient prescription drug costs for its 41 million enrollees. Right now 4 in 10 seniors have no drug coverage. The number of HMOs willing to insure seniors has dropped from 346 to 153, and continues to drop.
The primary coalition necessary for going to war is to have the backing of the American people. That support comes before a unified front comprised of various nations.
More than 40 states have budget shortfalls totalling $70 billion. "States are facing a perfect storm with deteriorating tax bases, an explosion of health care costs, coupled with a virtual collapse of capital gains tax revenues and corporate profit taxes," said Raymond Scheppach, executive director of the National Governors Association.
This is the first January in 30 years that there hasn't been an IPO.
Durable goods in December rose 0.2%. Economists had predicted an increase of 0.9%.
The FTSE is at a 7 1/2 year low.
The Fed will not change rates today.
The German economics minister lowered his forecast for growth in 2003 to 1%.
AT&T wireless to cut capital spending by 40%.
Nikkei at an 11 week low.
Consumer confidence fell two points to 79, a very weak showing.
Earthlink to cut 25% of its workers.
Apple cuts Power Mac prices.
White House Budget Director Mitchell Daniels said the deficits for 2003 and 2004 would excced $300 billion. In July a deficit of $109 billion and $48 billion in 2004 had been projected. Daniels said the White House will no longer provide 10 year budget projections. Why? Daniels said "these numbers are meaningless. There never was a $5.6 trillion surplus; not even close." In other words, what comes out of the White House budget office is a figment of their own imagination. Imagine this!!!!!!
General MacArthur: "Expect only 5% of an intelligence report to be accurate. The trick of a good commander is to isolate the 5%."
That 5% maybe missing in the Bush healthcare plan. It requires senior citizens to enroll in HMOs. The problem- HMOs aren't available in many rural states, such as, Iowa. Medicare currently does not cover any outpatient prescription drug costs for its 41 million enrollees. Right now 4 in 10 seniors have no drug coverage. The number of HMOs willing to insure seniors has dropped from 346 to 153, and continues to drop.
The primary coalition necessary for going to war is to have the backing of the American people. That support comes before a unified front comprised of various nations.
More than 40 states have budget shortfalls totalling $70 billion. "States are facing a perfect storm with deteriorating tax bases, an explosion of health care costs, coupled with a virtual collapse of capital gains tax revenues and corporate profit taxes," said Raymond Scheppach, executive director of the National Governors Association.
This is the first January in 30 years that there hasn't been an IPO.
Durable goods in December rose 0.2%. Economists had predicted an increase of 0.9%.
The FTSE is at a 7 1/2 year low.
The Fed will not change rates today.
The German economics minister lowered his forecast for growth in 2003 to 1%.
AT&T wireless to cut capital spending by 40%.
Nikkei at an 11 week low.
Consumer confidence fell two points to 79, a very weak showing.
Earthlink to cut 25% of its workers.
Apple cuts Power Mac prices.
White House Budget Director Mitchell Daniels said the deficits for 2003 and 2004 would excced $300 billion. In July a deficit of $109 billion and $48 billion in 2004 had been projected. Daniels said the White House will no longer provide 10 year budget projections. Why? Daniels said "these numbers are meaningless. There never was a $5.6 trillion surplus; not even close." In other words, what comes out of the White House budget office is a figment of their own imagination. Imagine this!!!!!!
Tuesday, January 28, 2003
1/28/03 "Trust Is A Crucial Commodity"
These words were spoken by Colin Powell on Sunday before an international gathering of leaders in Davos, Switzerland. He might have included sound judgment and street smarts. No one seriously doubts that the U.S will release intelligence data on Iraqi weapons concealment and will show the direct link of Iraq to al Qaeda. Whether it's revealed today or next week is irrelevant. What isn't irrelevant is tonight's State of the Union address. There will be soaring rhetoric reminiscent of Churchill, Lincoln, Truman, and the Scriptures. Memorable words don't deliver results. Departments like Homeland Security can be initiated but the lack of infrastructure undermines success. In other words, there might have been four dress rehearsals for this speech and great preparation but there is a big gap between the lip and the cup, as it were. What does axis of evil mean? Every time I hear it spoken I cringe. Why? Little progress has happened but lots of talk. Hopefully there will be tangible improvements coming our way.
Merrill Lynch's chief strategist said technology shares should remain "significantly underweighted" due to evidence that capital spending expectations may be too optimistic.
The Dow closed below 8000 for the first time since Oct. 14.
Freddie Mac earnings below expectations.
Surveys show 4 out of 5 Europeans think the quality of healthcare stagnated or declined over the past decade.
Cross border pharmacies are the rage. There are at least 80 Canadian companies in the business. Simply put, Canada regulates drug prices. What the market will bear dictates prices in the U.S.
Pfizer Chairman and CEO McKinnell: "with a differing set of incentives the system can produce better outcomes at significantly lower costs." I don't see anyone stopping the drug companies from doing that- with the possible exception of greed.
2002 home sales rose 5% to a record 5.56 million homes.
Fujitsu cuts forecast.
These words were spoken by Colin Powell on Sunday before an international gathering of leaders in Davos, Switzerland. He might have included sound judgment and street smarts. No one seriously doubts that the U.S will release intelligence data on Iraqi weapons concealment and will show the direct link of Iraq to al Qaeda. Whether it's revealed today or next week is irrelevant. What isn't irrelevant is tonight's State of the Union address. There will be soaring rhetoric reminiscent of Churchill, Lincoln, Truman, and the Scriptures. Memorable words don't deliver results. Departments like Homeland Security can be initiated but the lack of infrastructure undermines success. In other words, there might have been four dress rehearsals for this speech and great preparation but there is a big gap between the lip and the cup, as it were. What does axis of evil mean? Every time I hear it spoken I cringe. Why? Little progress has happened but lots of talk. Hopefully there will be tangible improvements coming our way.
Merrill Lynch's chief strategist said technology shares should remain "significantly underweighted" due to evidence that capital spending expectations may be too optimistic.
The Dow closed below 8000 for the first time since Oct. 14.
Freddie Mac earnings below expectations.
Surveys show 4 out of 5 Europeans think the quality of healthcare stagnated or declined over the past decade.
Cross border pharmacies are the rage. There are at least 80 Canadian companies in the business. Simply put, Canada regulates drug prices. What the market will bear dictates prices in the U.S.
Pfizer Chairman and CEO McKinnell: "with a differing set of incentives the system can produce better outcomes at significantly lower costs." I don't see anyone stopping the drug companies from doing that- with the possible exception of greed.
2002 home sales rose 5% to a record 5.56 million homes.
Fujitsu cuts forecast.
Monday, January 27, 2003
1/27/03 "There's A Sausage Machine On Capitol Hill"
Before I get into the meat of this morning's blog, I want to make a sincere apology. It appears that my daily musings are making many of my readers depressed. That certainly is not my intention. In fact, I have always believed knowing the facts is uplifting and a great way to start the day- a little like the breakfast of champions. Now I could change the recipe, and dilute the truth, but then you wouldn't respect my independent thinking. So let's start fresh today. I will not say one word about unemployment, consumer sentiment, or economic malaise.
White House chief of staff Andrew Card: "There's a sausage machine on Capitol Hill. We gave the sausage machine all the right ingredients, they have to churn, and I'm confident that when they turn that sausage out, it'll be the right kind of sausage for America." Will it be vegetarian sausage or organic? I, for one, am always interested in creative recipes. Maybe Andrew Card could be a guest on the Food Network.
Martha Stewart: "I'm real lucky, because I am able to sort of compartmentalize. I can be concerned on one hand, and be productive on the other hand...I can still sleep." Maybe her nickname should be multi-task.
The drought sweeping the West is the worst in more than a century. Some scientists say it rivals the meanest dry spells of the past 1400 years! In some places for the past year and a half there hasn't been enough rain even to measure.
70% of those polled believe a war with Iraq will hurt the U.S. economy. Maybe a creative stimulus plan is not to go to war.
It is estimated that each year states are losing at least $12 billion in taxes on e-commerce and catalog purchases on the internet.
European stocks are at their lowest level in about 6 years. The FTSE is below 3500.
Gold is at $372 and 30% higher than a year ago.
The Euro is at $1.09 vs the dollar.
Crude oil is trading at $33.50 per barrel.
Microsoft's Gates says he does not expect a big pick-up in tech spending over the next 2 or 3 years.
Blix to say Iraq failed to fully comply with the UN resolution. What a revelation!
The Packard Foundation provided $616 million in grants in 2000. This year the expectation is for $200 million.
Ellison says Oracle's stock is undervalued. If so, why isn't he out there buying the shares in the marketplace? Maybe he should talk less, and spend more time trying to build revenue.
Before I get into the meat of this morning's blog, I want to make a sincere apology. It appears that my daily musings are making many of my readers depressed. That certainly is not my intention. In fact, I have always believed knowing the facts is uplifting and a great way to start the day- a little like the breakfast of champions. Now I could change the recipe, and dilute the truth, but then you wouldn't respect my independent thinking. So let's start fresh today. I will not say one word about unemployment, consumer sentiment, or economic malaise.
White House chief of staff Andrew Card: "There's a sausage machine on Capitol Hill. We gave the sausage machine all the right ingredients, they have to churn, and I'm confident that when they turn that sausage out, it'll be the right kind of sausage for America." Will it be vegetarian sausage or organic? I, for one, am always interested in creative recipes. Maybe Andrew Card could be a guest on the Food Network.
Martha Stewart: "I'm real lucky, because I am able to sort of compartmentalize. I can be concerned on one hand, and be productive on the other hand...I can still sleep." Maybe her nickname should be multi-task.
The drought sweeping the West is the worst in more than a century. Some scientists say it rivals the meanest dry spells of the past 1400 years! In some places for the past year and a half there hasn't been enough rain even to measure.
70% of those polled believe a war with Iraq will hurt the U.S. economy. Maybe a creative stimulus plan is not to go to war.
It is estimated that each year states are losing at least $12 billion in taxes on e-commerce and catalog purchases on the internet.
European stocks are at their lowest level in about 6 years. The FTSE is below 3500.
Gold is at $372 and 30% higher than a year ago.
The Euro is at $1.09 vs the dollar.
Crude oil is trading at $33.50 per barrel.
Microsoft's Gates says he does not expect a big pick-up in tech spending over the next 2 or 3 years.
Blix to say Iraq failed to fully comply with the UN resolution. What a revelation!
The Packard Foundation provided $616 million in grants in 2000. This year the expectation is for $200 million.
Ellison says Oracle's stock is undervalued. If so, why isn't he out there buying the shares in the marketplace? Maybe he should talk less, and spend more time trying to build revenue.
Sunday, January 26, 2003
1/26/03 What The State Of The Union Speech Won't Say
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
1/26/03 What The State Of The Union Speech Won't Say
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
Saturday, January 25, 2003
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.
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.
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