6/19/04 Change Is In The Air
Microsoft has 157 staff hiring recruiters. The company announced yesterday that about 20 of them would lose their jobs. Over the past year, employment rose from 54,500 to 56,100. You don’t need 157 recruiters to hire 1,600 people. In addition, with the new campus moving to completion in India, Microsoft’s hiring focus appears to be headed outside the U.S. Top management has increasingly turned its attention to cost cutting measures. Wall Street’s recent focus is the speculation of a big share buyback announcement in July. A better alternative might be to sell the 25 puts whenever the stock trades at or near that level. In the bullish dotcom run, the company made billions selling naked puts. Why change a course that has worked so successfully?
Since Bush was elected, about 35,000 wood-furniture workers, or 28% of that sector’s workforce, have lost their jobs. John Bassett of Bassett Furniture stated “the illegal dumping by the Chinese has devastated the U.S. bedroom industry.” The U.S. will slap tariffs on Chinese furniture.
The WTO ruled that $3 billion in U.S. cotton subsidies violate trade rules.
The Houston Chronicle reports that the Justice Department’s Enron Task Force has been investigating Kenny Boy Lay, former Enron Chairman, for the past 2 ½ years. The paper stated that Federal prosecutors plan to ask a grand jury to indict Lay on charges of fraud. Lay was a heavy donor to Bush and to Bush Sr. and a friend of both. In September 2001, Lay told Enron employees that the stock is “incredibly cheap” and “talk up the stock and talk positively about Enron to your family and friends…There have been all kinds of reckless and unfounded rumors about Enron and the financial condition of Enron.”
There have also been unfounded rumors about Iraq’s WMD and ties between Saddam Hussein and Al-Qaida and 9/11. It must be the water in Texas that creates these unfounded rumors. It’s a big state with tall tales. I wonder if the American people can read the terror card.
The U.S. current account deficit widened to a record $144.9 billion in the first quarter. Can you imagine the size of the deficit had the dollar been strong? In April the trade deficit widened to a record $48.3 billion. Greenspan stated “there is an unquenchable demand to hold assets of claims against American residents largely because they are presumed to be safe and they’re presumed to have significantly higher rates of return adjusted for risk than most other areas of the world.” It should be noted that, as the Fed raises interest rates, billions more are paid out to foreigners holding our treasuries and the current account deficit widens. As the deficits increase, some investors might question the ability of the U.S. to repay the debt principal outstanding. Of course, our country is recently built on the refinancing house of cards. That Ponzi game is in the ninth inning and will not go into extra innings. Michael Metcalfe of State Street Bank observed that “the dollar needs to be funded by equity or FDI flows, but now they are both negative.”
The EU agreed to a new constitutional treaty.
Grant M. Nulle of the Ludwig von Mises Institute: “Mr. Greenspan has no one to blame for inflation but himself.”
Friday, June 18, 2004
6/18/04 Is China’s Economy Slowing Down?
Chinese officials maintain that banks are tightening credit. Is it fact or fiction? Stock traders are becoming believers. The Shanghai Composite Index is selling near 7-month lows. Many U.S. semiconductor stocks have been spooked. Sharp and Samsung have recently been on the receiving end of selling. One thing is for certain. China’s recent growth rate is unsustainable.
Ten-year Japanese bond yields are trading at their highest level in four years.
John Challenger, CEO of Challenger, Gray, & Christmas, stated that nationally about 2.2 million people in prime working age are not counted as unemployed but do want a job. He cites the latest BLS statistics. Michael Wald, regional economist for the BLS, stated that about 798,000 people age 25 to 54 are not in the workforce but say they would like a job. He remarked “one could argue that the most likely group of workers not currently in the labor force but most likely to rejoin it are those people. If they were included in the count now, the national jobless rate would be 6.6%.” The Pew Hispanic Center stated that a high proportion of new jobs required low skills and paid relatively low wages. The average time that a laid-off worker takes to find a job remains near all-time highs.
According to the third annual Principal Financial Group Global Financial Well Being Study, 49% of all U.S. respondents believe their lifestyle in retirement will be less than it is today. Only 29% of people surveyed felt that way last year. Norman Sorensen, president of Principal International, observed “we weren’t expecting this. The golden years have become the beholden years.”
According to the latest Duke University CFO Outlook Survey, “the CFOs are telling us that there are growing risks to a continued recovery. In addition to dampened capital spending growth, employment is expected to grow by only one percent next year, a notable worsening of the employment expectations expressed by CFOs just last quarter. Our analysis of this quarter’s survey suggests the economic situation is growing more fragile.” One-third of CFOs cite price inflation as a top risk. Also, rising health care costs remain a major concern for many companies.
According to yesterday’s report released by the California Association of Realtors, only 20% of households in California are able to afford a median-priced home. The minimum household income needed to purchase a median-priced home at 4453,590 in California in April was $102,550, based on a typical 30-year, fixed-rate mortgage at 5.42 percent and assuming a 20% downpayment. By comparison, the minimum household income needed to purchase a median-priced home at $176,000 in the U.S. in April 2004 was $39,790. It is not surprising that people are moving from California to other more affordable areas.
Norway is the world’s third-biggest exporter of crude oil behind Saudi Arabia and Russia. A strike by 200 Norwegian oil workers could cut that country’s output by 13% or about 400,000 bpd.
ExxonMobil’s 538,000 bpd refinery in Baytown, Texas had an unscheduled closure for at least two days. There is some speculation that the refinery could be closed for at least one week.
According to the USDA, farming and related businesses account for about 12% of the U.S. GDP and about 17% of American jobs. According to Purdue University economists, the U.S. might run an agricultural trade deficit by the end of this decade. With a current agricultural trade surplus of only $10 billion, it would not be surprising to see a deficit sooner than Purdue’s prediction. Whether it is Russia, Brazil, China, India, China, Australia or some other country, our agricultural exports face serious competition. The picnic is over.
Wal-Mart is reducing shelf space for home entertainment products. This move will have a decided impact on its suppliers.
The Pension Benefit Guaranty Corp. reported that more than 1,000 underfunded pension plans had a total shortfall of $278.6 billion in 2003. Only pension plans that had shortfalls greater than $50 million were required to file a report.
Scientists at the U.S. Geological Survey stated yesterday that the current drought in the West could be the biggest in 500 years. The Colorado River has the lowest water flow on record. It is at half the annual flow experienced during the Dust Bowl years between 1930 and 1937. In my view, if the current drought persists, there could be severe economic and sociological fallout. To make matters worse, we are headed into the dry summer season in the West. At the very least, we can expect heightened risk from forest fires.
Chinese officials maintain that banks are tightening credit. Is it fact or fiction? Stock traders are becoming believers. The Shanghai Composite Index is selling near 7-month lows. Many U.S. semiconductor stocks have been spooked. Sharp and Samsung have recently been on the receiving end of selling. One thing is for certain. China’s recent growth rate is unsustainable.
Ten-year Japanese bond yields are trading at their highest level in four years.
John Challenger, CEO of Challenger, Gray, & Christmas, stated that nationally about 2.2 million people in prime working age are not counted as unemployed but do want a job. He cites the latest BLS statistics. Michael Wald, regional economist for the BLS, stated that about 798,000 people age 25 to 54 are not in the workforce but say they would like a job. He remarked “one could argue that the most likely group of workers not currently in the labor force but most likely to rejoin it are those people. If they were included in the count now, the national jobless rate would be 6.6%.” The Pew Hispanic Center stated that a high proportion of new jobs required low skills and paid relatively low wages. The average time that a laid-off worker takes to find a job remains near all-time highs.
According to the third annual Principal Financial Group Global Financial Well Being Study, 49% of all U.S. respondents believe their lifestyle in retirement will be less than it is today. Only 29% of people surveyed felt that way last year. Norman Sorensen, president of Principal International, observed “we weren’t expecting this. The golden years have become the beholden years.”
According to the latest Duke University CFO Outlook Survey, “the CFOs are telling us that there are growing risks to a continued recovery. In addition to dampened capital spending growth, employment is expected to grow by only one percent next year, a notable worsening of the employment expectations expressed by CFOs just last quarter. Our analysis of this quarter’s survey suggests the economic situation is growing more fragile.” One-third of CFOs cite price inflation as a top risk. Also, rising health care costs remain a major concern for many companies.
According to yesterday’s report released by the California Association of Realtors, only 20% of households in California are able to afford a median-priced home. The minimum household income needed to purchase a median-priced home at 4453,590 in California in April was $102,550, based on a typical 30-year, fixed-rate mortgage at 5.42 percent and assuming a 20% downpayment. By comparison, the minimum household income needed to purchase a median-priced home at $176,000 in the U.S. in April 2004 was $39,790. It is not surprising that people are moving from California to other more affordable areas.
Norway is the world’s third-biggest exporter of crude oil behind Saudi Arabia and Russia. A strike by 200 Norwegian oil workers could cut that country’s output by 13% or about 400,000 bpd.
ExxonMobil’s 538,000 bpd refinery in Baytown, Texas had an unscheduled closure for at least two days. There is some speculation that the refinery could be closed for at least one week.
According to the USDA, farming and related businesses account for about 12% of the U.S. GDP and about 17% of American jobs. According to Purdue University economists, the U.S. might run an agricultural trade deficit by the end of this decade. With a current agricultural trade surplus of only $10 billion, it would not be surprising to see a deficit sooner than Purdue’s prediction. Whether it is Russia, Brazil, China, India, China, Australia or some other country, our agricultural exports face serious competition. The picnic is over.
Wal-Mart is reducing shelf space for home entertainment products. This move will have a decided impact on its suppliers.
The Pension Benefit Guaranty Corp. reported that more than 1,000 underfunded pension plans had a total shortfall of $278.6 billion in 2003. Only pension plans that had shortfalls greater than $50 million were required to file a report.
Scientists at the U.S. Geological Survey stated yesterday that the current drought in the West could be the biggest in 500 years. The Colorado River has the lowest water flow on record. It is at half the annual flow experienced during the Dust Bowl years between 1930 and 1937. In my view, if the current drought persists, there could be severe economic and sociological fallout. To make matters worse, we are headed into the dry summer season in the West. At the very least, we can expect heightened risk from forest fires.
Thursday, June 17, 2004
6/17/04 The Uninsured
According to the U.S. Census Bureau’s Current Population Survey, in September 2003 there were 43.6 million uninsured people in the U.S. in 2002, an increase of 14.6% over 2001. However, the survey reported many people who are uninsured for a portion of a year but not for the entire year. These people are not reflected in the Census Bureau number. Astoundingly, for those under the age of 65 without health insurance for all or part of 2002 and 2003, their analysis states there were approximately 81.8 million such people, or one out of three people in this age category, and that two-thirds of these people were uninsured for six months or more.
Sprint Corp. will lay off 1,100 employees in the portion of the company that sells to business customers. Sprint stated that the layoffs are due to continued market pressures and erosion of the long-distance business. Since October 2001, Sprint has laid off more than 23,600 people. The company indicated it has been hurt by price cutting from chief rival AT&T.
Jack Guynn, President of the Atlanta Fed: The Fed “is several hundred basis points behind what would be a more normal policy setting.”
Albert Broaddus Jr., President of the Richmond Fed: “We’re clear that we need for rates to move up.” A neutral Fed target rate “is something in the vicinity of 2.5 to 3.5 percent, but many things can affect what neutral is—it is difficult to answer with precision.”
Pimco’s Bill Gross: “Too much debt, geopolitical risk and several bubbles have created an unstable environment which can turn any minute.”
The 9-11 Commission found no evidence exists that al-Qaida had strong ties to Saddam Hussein.
The U.S. Department of Transportation reported that, for the first time, last month Southwest Airlines carried 6.5 million domestic passengers, and that exceeded all major airlines.
In the year ended March 2004, U.S. direct investment into Japan fell 41%.
The Financial Times has a comment and analysis on the prisoner abuse scandal in Iraq. The headline reads chain of Command: can torture in Iraq be linked to the White House?
According to the U.S. Census Bureau’s Current Population Survey, in September 2003 there were 43.6 million uninsured people in the U.S. in 2002, an increase of 14.6% over 2001. However, the survey reported many people who are uninsured for a portion of a year but not for the entire year. These people are not reflected in the Census Bureau number. Astoundingly, for those under the age of 65 without health insurance for all or part of 2002 and 2003, their analysis states there were approximately 81.8 million such people, or one out of three people in this age category, and that two-thirds of these people were uninsured for six months or more.
Sprint Corp. will lay off 1,100 employees in the portion of the company that sells to business customers. Sprint stated that the layoffs are due to continued market pressures and erosion of the long-distance business. Since October 2001, Sprint has laid off more than 23,600 people. The company indicated it has been hurt by price cutting from chief rival AT&T.
Jack Guynn, President of the Atlanta Fed: The Fed “is several hundred basis points behind what would be a more normal policy setting.”
Albert Broaddus Jr., President of the Richmond Fed: “We’re clear that we need for rates to move up.” A neutral Fed target rate “is something in the vicinity of 2.5 to 3.5 percent, but many things can affect what neutral is—it is difficult to answer with precision.”
Pimco’s Bill Gross: “Too much debt, geopolitical risk and several bubbles have created an unstable environment which can turn any minute.”
The 9-11 Commission found no evidence exists that al-Qaida had strong ties to Saddam Hussein.
The U.S. Department of Transportation reported that, for the first time, last month Southwest Airlines carried 6.5 million domestic passengers, and that exceeded all major airlines.
In the year ended March 2004, U.S. direct investment into Japan fell 41%.
The Financial Times has a comment and analysis on the prisoner abuse scandal in Iraq. The headline reads chain of Command: can torture in Iraq be linked to the White House?
6/17/04 The Uninsured
According to the U.S. Census Bureau’s Current Population Survey, in September 2003 there were 43.6 million uninsured people in the U.S. in 2002, an increase of 14.6% over 2001. However, the survey reported many people who are uninsured for a portion of a year but not for the entire year. These people are not reflected in the Census Bureau number. Astoundingly, for those under the age of 65 without health insurance for all or part of 2002 and 2003, their analysis states there were approximately 81.8 million such people, or one out of three people in this age category, and that two-thirds of these people were uninsured for six months or more.
Sprint Corp. will lay off 1,100 employees in the portion of the company that sells to business customers. Sprint stated that the layoffs are due to continued market pressures and erosion of the long-distance business. Since October 2001, Sprint has laid off more than 23,600 people. The company indicated it has been hurt by price cutting from chief rival AT&T.
Jack Guynn, President of the Atlanta Fed: The Fed “is several hundred basis points behind what would be a more normal policy setting.”
Albert Broaddus Jr., President of the Richmond Fed: “We’re clear that we need for rates to move up.” A neutral Fed target rate “is something in the vicinity of 2.5 to 3.5 percent, but many things can affect what neutral is—it is difficult to answer with precision.”
Pimco’s Bill Gross: “Too much debt, geopolitical risk and several bubbles have created an unstable environment which can turn any minute.”
The 9-11 Commission found no evidence exists that al-Qaida had strong ties to Saddam Hussein.
The U.S. Department of Transportation reported that, for the first time, last month Southwest Airlines carried 6.5 million domestic passengers, and that exceeded all major airlines.
In the year ended March 2004, U.S. direct investment into Japan fell 41%.
The Financial Times has a comment and analysis on the prisoner abuse scandal in Iraq. The headline reads chain of Command: can torture in Iraq be linked to the White House?
According to the U.S. Census Bureau’s Current Population Survey, in September 2003 there were 43.6 million uninsured people in the U.S. in 2002, an increase of 14.6% over 2001. However, the survey reported many people who are uninsured for a portion of a year but not for the entire year. These people are not reflected in the Census Bureau number. Astoundingly, for those under the age of 65 without health insurance for all or part of 2002 and 2003, their analysis states there were approximately 81.8 million such people, or one out of three people in this age category, and that two-thirds of these people were uninsured for six months or more.
Sprint Corp. will lay off 1,100 employees in the portion of the company that sells to business customers. Sprint stated that the layoffs are due to continued market pressures and erosion of the long-distance business. Since October 2001, Sprint has laid off more than 23,600 people. The company indicated it has been hurt by price cutting from chief rival AT&T.
Jack Guynn, President of the Atlanta Fed: The Fed “is several hundred basis points behind what would be a more normal policy setting.”
Albert Broaddus Jr., President of the Richmond Fed: “We’re clear that we need for rates to move up.” A neutral Fed target rate “is something in the vicinity of 2.5 to 3.5 percent, but many things can affect what neutral is—it is difficult to answer with precision.”
Pimco’s Bill Gross: “Too much debt, geopolitical risk and several bubbles have created an unstable environment which can turn any minute.”
The 9-11 Commission found no evidence exists that al-Qaida had strong ties to Saddam Hussein.
The U.S. Department of Transportation reported that, for the first time, last month Southwest Airlines carried 6.5 million domestic passengers, and that exceeded all major airlines.
In the year ended March 2004, U.S. direct investment into Japan fell 41%.
The Financial Times has a comment and analysis on the prisoner abuse scandal in Iraq. The headline reads chain of Command: can torture in Iraq be linked to the White House?
Wednesday, June 16, 2004
6/16/06 Silicon Valley Employment Outlook Uncertain
According to the quarterly Manpower Employment Outlook Survey released yesterday, the Santa Clara County employment outlook is one of the weakest in the nation. From this July to September, 15% of the companies interviewed plan to hire more employees while 135 intend to reduce their workforce. Another 50% expect to maintain their current staff levels and 22% are not certain of their hiring plans. In this year's second quarter, 35% of the companies interviewed predicted an increase in hiring activity while 13% planned to decrease the hiring pace. Even one year ago, 18% of companies surveyed thought employment increases were likely while 13% intended to reduce staff. According to the most recent survey, job prospects appear best in construction; non-durable goods manufacturing; finance/insurance/real estate; and public administration. Reduced staff levels are anticipated in education and services, both areas showing recent hiring strength.
According to BP's chief economist, world oil reserves rose by almost 10% last year. Peter Davies stated "there is no global oil resource or reserve shortage." J P Morgan estiates that the price of oil is headed downward to $34 a barrel. Where were oil the bears when oil changed hands at $41+ a barrel?
According to the quarterly Manpower Employment Outlook Survey released yesterday, the Santa Clara County employment outlook is one of the weakest in the nation. From this July to September, 15% of the companies interviewed plan to hire more employees while 135 intend to reduce their workforce. Another 50% expect to maintain their current staff levels and 22% are not certain of their hiring plans. In this year's second quarter, 35% of the companies interviewed predicted an increase in hiring activity while 13% planned to decrease the hiring pace. Even one year ago, 18% of companies surveyed thought employment increases were likely while 13% intended to reduce staff. According to the most recent survey, job prospects appear best in construction; non-durable goods manufacturing; finance/insurance/real estate; and public administration. Reduced staff levels are anticipated in education and services, both areas showing recent hiring strength.
According to BP's chief economist, world oil reserves rose by almost 10% last year. Peter Davies stated "there is no global oil resource or reserve shortage." J P Morgan estiates that the price of oil is headed downward to $34 a barrel. Where were oil the bears when oil changed hands at $41+ a barrel?
Tuesday, June 15, 2004
6/15/04 Where It Counts
Real average weekly earnings adjusted for inflation fell 0.4% in May. Earnings were down 0.5% from year earlier levels. Cracks are beginning to show. Business sales fell by 0.1% in May, the first monthly decline since August. Total retail sales declined by 0.6%. At the same time, inventories climbed for the 8th straight month.
Over the past year inflation has jumped 3.1%. Much of that increase can be attributed to higher energy prices; however, in the latest CPI report, food prices rose 0.9%, the biggest jump in 14 years. More disturbing was the increase in dairy prices which had their largest rise in almost 60 years. I have been writing for some time about the rising prices for eggs and milk, for example.
The Fed states they are inflation fighters. Don't believe it. Their actions talk a different game. From May 1996 thru May 2004, M3 grew by 93% or at an annual rate of 8.5% and M2 grew 7.7% during this same time period. It's no wonder that our dollar continues to erode in value, and with it, our purchasing power.
In April our trade deficit with China expanded to $12 billion and with Canada to $5.7 billion.
The new census shows almost 300 million Americans with Hispanics amounting to about 40 million and Asians to about 12 million. Multi-racial persons account for another 4.3 million. It will be interesting to see the voting patterns of these groups come the November election.
Real average weekly earnings adjusted for inflation fell 0.4% in May. Earnings were down 0.5% from year earlier levels. Cracks are beginning to show. Business sales fell by 0.1% in May, the first monthly decline since August. Total retail sales declined by 0.6%. At the same time, inventories climbed for the 8th straight month.
Over the past year inflation has jumped 3.1%. Much of that increase can be attributed to higher energy prices; however, in the latest CPI report, food prices rose 0.9%, the biggest jump in 14 years. More disturbing was the increase in dairy prices which had their largest rise in almost 60 years. I have been writing for some time about the rising prices for eggs and milk, for example.
The Fed states they are inflation fighters. Don't believe it. Their actions talk a different game. From May 1996 thru May 2004, M3 grew by 93% or at an annual rate of 8.5% and M2 grew 7.7% during this same time period. It's no wonder that our dollar continues to erode in value, and with it, our purchasing power.
In April our trade deficit with China expanded to $12 billion and with Canada to $5.7 billion.
The new census shows almost 300 million Americans with Hispanics amounting to about 40 million and Asians to about 12 million. Multi-racial persons account for another 4.3 million. It will be interesting to see the voting patterns of these groups come the November election.
Monday, June 14, 2004
6/14/04 Competition For Stocks?
As 10 year government bonds trade at a yield of 4.83%, one must begin to question whether that return begins to create formidable competition for stocks. With a pick up in yield of about 300 basis points, bonds might begin to make investors pause prior to the purchase of equities.
Wal-Mart is our nation's largest employer in the private sector. As the company approaches the roll out of another 500 stores, they anticipate adding 83,000 new employees. Their earnings should approach $2.38 per share this year.
After Ronald Reagan was shot and survived, he viewed the future as his responsibility from God to make our country a better place for all Americans. On the other hand, in my view, the present president views his actions as a reflection of a mandate from God.
Of the main crops, wheat is the cheapest to plant. At the present price range of $3.50 to $4 per bushel, farmers can make money. A bushel of grain should weigh 60 pounds; however, without a late rain prior to harvest, those bushels are weighing about 55 pounds.
The Rocket tries to make it 10-0 today.
The U.S. trade deficit widened in April to a record $48.3 billion, up from March's deficit of $46.6 billion. Importantly, our exports fell 1.5% in April. At the same time, prices of imported goods rose 1.6% in May.
Psychiatrist Dr. Justin Frank: "Bush fits the profile of a former drinker whose alcholism has been arrested but not treated."
As 10 year government bonds trade at a yield of 4.83%, one must begin to question whether that return begins to create formidable competition for stocks. With a pick up in yield of about 300 basis points, bonds might begin to make investors pause prior to the purchase of equities.
Wal-Mart is our nation's largest employer in the private sector. As the company approaches the roll out of another 500 stores, they anticipate adding 83,000 new employees. Their earnings should approach $2.38 per share this year.
After Ronald Reagan was shot and survived, he viewed the future as his responsibility from God to make our country a better place for all Americans. On the other hand, in my view, the present president views his actions as a reflection of a mandate from God.
Of the main crops, wheat is the cheapest to plant. At the present price range of $3.50 to $4 per bushel, farmers can make money. A bushel of grain should weigh 60 pounds; however, without a late rain prior to harvest, those bushels are weighing about 55 pounds.
The Rocket tries to make it 10-0 today.
The U.S. trade deficit widened in April to a record $48.3 billion, up from March's deficit of $46.6 billion. Importantly, our exports fell 1.5% in April. At the same time, prices of imported goods rose 1.6% in May.
Psychiatrist Dr. Justin Frank: "Bush fits the profile of a former drinker whose alcholism has been arrested but not treated."
Sunday, June 13, 2004
6/13/04 Driving The Economic Wagon
Samuel Gerdano, executive driector of the American Bankruptcy Institute: "We need consumers to spend money to drive the economic wagon. But when they do, that adds to the bankruptcy rate." According to the Fed, nationwide, one in 73 households filed for bankruptcy in 2003. For the past 25 years, that number has been rising steadily. On the other other hand, Greenspan says we have nothing to worry about, and that debt service is under control. In looking at the latest Fed numbers, debt as a percentage of renters' income is a rousing 32%, a sharp increase from 23% only 10 years ago. Maybe Greenspan should wander down Main Street and take a closer look at the debt service picture.
Daimler Chrysler aims to cut 10,000 jobs at its Mercedes Benz unit. Sales at that unit fell 9.2% thru May.
China's Premier Wen Jiabao: "we haven't fundamentally solved the salient problems-- the supply of coal, electricity, oil, and transport are still very tight. The size of total investment is still very big, the government still faces a tough job to slow economic growth." With the first quarter's 43% rise in outlays for factories, roads, and other capital projects, China ia well into the over-heating danger zone. The world will feel the enormous impact of China operating past the boiling point. Something will give. Try and take cover.
Samuel Gerdano, executive driector of the American Bankruptcy Institute: "We need consumers to spend money to drive the economic wagon. But when they do, that adds to the bankruptcy rate." According to the Fed, nationwide, one in 73 households filed for bankruptcy in 2003. For the past 25 years, that number has been rising steadily. On the other other hand, Greenspan says we have nothing to worry about, and that debt service is under control. In looking at the latest Fed numbers, debt as a percentage of renters' income is a rousing 32%, a sharp increase from 23% only 10 years ago. Maybe Greenspan should wander down Main Street and take a closer look at the debt service picture.
Daimler Chrysler aims to cut 10,000 jobs at its Mercedes Benz unit. Sales at that unit fell 9.2% thru May.
China's Premier Wen Jiabao: "we haven't fundamentally solved the salient problems-- the supply of coal, electricity, oil, and transport are still very tight. The size of total investment is still very big, the government still faces a tough job to slow economic growth." With the first quarter's 43% rise in outlays for factories, roads, and other capital projects, China ia well into the over-heating danger zone. The world will feel the enormous impact of China operating past the boiling point. Something will give. Try and take cover.
Saturday, June 12, 2004
6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Friday, June 11, 2004
6/11/04 For All Seasons
Ronald Wilson Reagan may not have been all things to all people; however, he was a man for all seasons.
In this year's first quarter, our federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these growth rates are not sustainable.
The nation's debt accumulation has outpaced nominal GDP for the 14th time in the past 15 quarters.
This nation's mortgage debt has grown to almost $7 trillion and the household consumer debt has risen to just over $2 trillion. I guess debt can grow to the sky. It's a little like being short a stock. There is no limit on how high a stock can rise. Too bad our indebtedness is not replaced by equity ownership.
Atlanta Federal Reserve Bank President Jack Guynn: Rising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are certainly subject to change.
Ronald Wilson Reagan may not have been all things to all people; however, he was a man for all seasons.
In this year's first quarter, our federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these growth rates are not sustainable.
The nation's debt accumulation has outpaced nominal GDP for the 14th time in the past 15 quarters.
This nation's mortgage debt has grown to almost $7 trillion and the household consumer debt has risen to just over $2 trillion. I guess debt can grow to the sky. It's a little like being short a stock. There is no limit on how high a stock can rise. Too bad our indebtedness is not replaced by equity ownership.
Atlanta Federal Reserve Bank President Jack Guynn: Rising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are certainly subject to change.
6/11/04 For All Seasons
Ronald Wilson Reagan was not all things to all people; however, he was a man for all seasons.
In this year's first quarter, federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these rates of growth are not sustainable.
In this year's first quarter, the nation's debt accumulation outpaced nominal GDP for the 14th time in the past 15 months. I hope our citizens do not believe this is an achievement.
Mortgage debt has risen to almost $7 trillion. Household consumer debt increased to just over $2 trillion. Greenspan says we have nothing to worry about when it comes to these debt levels. I am worried about his judgment.
Atlanta Federal Reserve Bank President Jack Guynn: Raising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are made to change with the wind.
Ronald Wilson Reagan was not all things to all people; however, he was a man for all seasons.
In this year's first quarter, federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these rates of growth are not sustainable.
In this year's first quarter, the nation's debt accumulation outpaced nominal GDP for the 14th time in the past 15 months. I hope our citizens do not believe this is an achievement.
Mortgage debt has risen to almost $7 trillion. Household consumer debt increased to just over $2 trillion. Greenspan says we have nothing to worry about when it comes to these debt levels. I am worried about his judgment.
Atlanta Federal Reserve Bank President Jack Guynn: Raising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are made to change with the wind.
Thursday, June 10, 2004
6/10/04 Behind The 8 Ball
Prices of goods imported into the U.S. rose by 1.6% in May. Export prices, on the other hand, rose o.3% in May. One doesn't need to be a genius to realize our currency won't be worth diddly should this relationship continue.
Initial unemployment claims in the most recent week rose 12,000 to 352,000, a 7 week high. Some temps must have lost their low-paying contracts.
Morgan Stanley and ABN Amro Holding predict that the Fed will lift interest rates 4 times this year to 2%. Several others share this view. In the meantime, the Bank of England lifted its benchmark lending rate by a quarter point to 4.5% citing rising house prices and other inflation concerns. It sounds like they could be describing the U.S.
Robert Arnott, manager of the $2.3 billion Pimco All Asset Fund: "18 months ago there was a lot of low-hanging fruit. Today there isn't. Almost everything is moderately to significantly expensive." Be patient, Robert. Value is waiting around the corner.
The International Energy Agency revised its oil demand forcast for 2004 by 360,000 barrels per day to the highest rate since 1980.
According to a new LA Times poll, with Nader in the race, Kerry leads Bush by 48% to 42%.
Prices of goods imported into the U.S. rose by 1.6% in May. Export prices, on the other hand, rose o.3% in May. One doesn't need to be a genius to realize our currency won't be worth diddly should this relationship continue.
Initial unemployment claims in the most recent week rose 12,000 to 352,000, a 7 week high. Some temps must have lost their low-paying contracts.
Morgan Stanley and ABN Amro Holding predict that the Fed will lift interest rates 4 times this year to 2%. Several others share this view. In the meantime, the Bank of England lifted its benchmark lending rate by a quarter point to 4.5% citing rising house prices and other inflation concerns. It sounds like they could be describing the U.S.
Robert Arnott, manager of the $2.3 billion Pimco All Asset Fund: "18 months ago there was a lot of low-hanging fruit. Today there isn't. Almost everything is moderately to significantly expensive." Be patient, Robert. Value is waiting around the corner.
The International Energy Agency revised its oil demand forcast for 2004 by 360,000 barrels per day to the highest rate since 1980.
According to a new LA Times poll, with Nader in the race, Kerry leads Bush by 48% to 42%.
Wednesday, June 09, 2004
6/9/04 Home Equity Loans
According to Lending Tree, Inc., by the end of 2004, a projected 23.5% of homeowners will have secured a home equity loan, double the number who did so in 2003. Only 6.7% had home equity loans in 2002. With wages and salaries running behind the rate of inflation for the past three years, the home equity loans have kept the consumer in the spending game. As interest rates have risen about 100 basis points, the refinancing of homes has declined to about one-third of all mortgages. The engine fueling consumers is about to run out of gas. When it does, the fallout will not present a pretty picture.
GM expects to start its car financing business in China by September or October. Car financing is another description for sales incentives. It reminds me of the barker at the circus shouting "come right this way to the greatest show on earth."
July crude fell to the contract's lowest level since May 3, and settled at $37.15 per barrel. Soon the goniffs at the gas stations will lower their prices.
John Carlson, columnist for the Des Moines Register on Ronald Reagan: "He was like a confused poker player who kept asking if a flush beat two pair and left the table with all the cash. The other players never figured out he invented the game."
Patti Davis: "There is nothing stronger than love between two people, two souls."
Tata Consultancy Services has a new clinical drug management system that could reduce a drug's time to market and lower the trial's costs.
Sen. Diane Feinstein: "There appears to be an effort to redefine torture and narrow the prohibition against it."
According to Lending Tree, Inc., by the end of 2004, a projected 23.5% of homeowners will have secured a home equity loan, double the number who did so in 2003. Only 6.7% had home equity loans in 2002. With wages and salaries running behind the rate of inflation for the past three years, the home equity loans have kept the consumer in the spending game. As interest rates have risen about 100 basis points, the refinancing of homes has declined to about one-third of all mortgages. The engine fueling consumers is about to run out of gas. When it does, the fallout will not present a pretty picture.
GM expects to start its car financing business in China by September or October. Car financing is another description for sales incentives. It reminds me of the barker at the circus shouting "come right this way to the greatest show on earth."
July crude fell to the contract's lowest level since May 3, and settled at $37.15 per barrel. Soon the goniffs at the gas stations will lower their prices.
John Carlson, columnist for the Des Moines Register on Ronald Reagan: "He was like a confused poker player who kept asking if a flush beat two pair and left the table with all the cash. The other players never figured out he invented the game."
Patti Davis: "There is nothing stronger than love between two people, two souls."
Tata Consultancy Services has a new clinical drug management system that could reduce a drug's time to market and lower the trial's costs.
Sen. Diane Feinstein: "There appears to be an effort to redefine torture and narrow the prohibition against it."
Tuesday, June 08, 2004
6/8/04 Whatever It Takes
Greenspan: The FOMC "is prepared to do what is required" to fight inflation. If necessary, interest rate hikes will not be measured.
Shell Oil is cutting 600 to 800 IT jobs in the U.S. in a cost cutting move. Currently, Shell has 9,000 software developers. The company plans to send more of its work to India and Malaysia.
India is seeking to develop "value partnerships" in discovery drug research with U.S. firms. The new Indian government is committed to protect intellectual property rights.
India's forex reserves have climbed to $120 billion. Gold assets remain at $4.19 billion.
Home Depot plansd to create a business development operation in China. They will find little competition in that country.
Is Bush being to crack under the many pressures he is feeling and confronting?
Greenspan: The FOMC "is prepared to do what is required" to fight inflation. If necessary, interest rate hikes will not be measured.
Shell Oil is cutting 600 to 800 IT jobs in the U.S. in a cost cutting move. Currently, Shell has 9,000 software developers. The company plans to send more of its work to India and Malaysia.
India is seeking to develop "value partnerships" in discovery drug research with U.S. firms. The new Indian government is committed to protect intellectual property rights.
India's forex reserves have climbed to $120 billion. Gold assets remain at $4.19 billion.
Home Depot plansd to create a business development operation in China. They will find little competition in that country.
Is Bush being to crack under the many pressures he is feeling and confronting?
Monday, June 07, 2004
6/7/04 Inflation
It is hard to measure inflation. In the end, it is a personal matter. It depends on each individual's spending habits. Some drive more miles. Some do a good deal of home improvement projects and can get impacted by rising lumber and possibly even metal prices. Shipping costs can cause some hurt to the bottom line. You may be effected by rising airline prices due to fuel adjustments. For some inflation is alive and well. The CRB Index recently hit a 23 year high. For others, it may come down to the cost of eggs and milk. The fact is though that no one escapes the hand of inflation when it is rising. You don't need the Fed to remind you. Your bank balance feels it. If inflation should gain traction, you had better hunker down. The results will not be pleasant. Fighting inflation and high interst rates took its toll some two decades ago. They were trying times for all Americans, and that included Ronadl Reagan. Let's hope those times are not revisited.
The Congress is working on a $447 billion defense budget. You can do the math. We have 285 million Americans. That size budget, is, in my view, indefensible. It is irrational and irresponsible. I guarantee they cannot reconcile the accounting for all those expenditures. Hopefully, all Amnericans will not swallow and accept this budget in the name of the war on terror. Our greatest enemy is the great divide in our country. It costs nothing to fix it but the will to do so.
It is hard to measure inflation. In the end, it is a personal matter. It depends on each individual's spending habits. Some drive more miles. Some do a good deal of home improvement projects and can get impacted by rising lumber and possibly even metal prices. Shipping costs can cause some hurt to the bottom line. You may be effected by rising airline prices due to fuel adjustments. For some inflation is alive and well. The CRB Index recently hit a 23 year high. For others, it may come down to the cost of eggs and milk. The fact is though that no one escapes the hand of inflation when it is rising. You don't need the Fed to remind you. Your bank balance feels it. If inflation should gain traction, you had better hunker down. The results will not be pleasant. Fighting inflation and high interst rates took its toll some two decades ago. They were trying times for all Americans, and that included Ronadl Reagan. Let's hope those times are not revisited.
The Congress is working on a $447 billion defense budget. You can do the math. We have 285 million Americans. That size budget, is, in my view, indefensible. It is irrational and irresponsible. I guarantee they cannot reconcile the accounting for all those expenditures. Hopefully, all Amnericans will not swallow and accept this budget in the name of the war on terror. Our greatest enemy is the great divide in our country. It costs nothing to fix it but the will to do so.
Sunday, June 06, 2004
6/6/04 Thanks For The Memories
Only three times have I felt good about voting for a presidential candidate, and of those, twice were for Ronald Reagan. He was a great leader, a fantastic communicator to nations around the globe, and provided optimism and a feel good red, white, and blue spirit to Americans. Our country has not come close to electing an individual who could carry his genuine smile.
It is the 60th anniversary of D- Day. Our veterans did make the world a safer place. They made a difference that is still felt today.
Smarty Jones has great courage and grit. His owners, handlers, and jockey have displayed great class throughout the running of the triple crown events. I thought this 15.3 hands thoroughbred was a lock on the Belmont Stakes. He just came up a bit short in the end. The loss was disappointing but not Smarty Jones. He gave it everything he had.
As I was watching the events of yesterday and thinking about the ending to WWII, I could not help but turn my attention once again to the battle raging within our nation. We can’t defeat time. No warhead can do it. Praying cannot stop a clock. Americans are aging. Millions are squeezed for co-payments and deductibles. Millions are squeezed due to no health insurance. At present, this is a losing battle. According to Hewitt Associates, in 1998, employees nationwide paid out-of-pocket medical expenses of $385 per year. This year, it’s averaging $1,030. In addition, in 1998, health insurance premiums cost $630. This year employees are paying an average of $1,565. In 1998, employers covered 75% of the health expenses. This year that’s down to 68%. In essence, you have the underinsured and the uninsured. The average hourly paycheck cannot carry the burden of rising healthcare costs.
Only three times have I felt good about voting for a presidential candidate, and of those, twice were for Ronald Reagan. He was a great leader, a fantastic communicator to nations around the globe, and provided optimism and a feel good red, white, and blue spirit to Americans. Our country has not come close to electing an individual who could carry his genuine smile.
It is the 60th anniversary of D- Day. Our veterans did make the world a safer place. They made a difference that is still felt today.
Smarty Jones has great courage and grit. His owners, handlers, and jockey have displayed great class throughout the running of the triple crown events. I thought this 15.3 hands thoroughbred was a lock on the Belmont Stakes. He just came up a bit short in the end. The loss was disappointing but not Smarty Jones. He gave it everything he had.
As I was watching the events of yesterday and thinking about the ending to WWII, I could not help but turn my attention once again to the battle raging within our nation. We can’t defeat time. No warhead can do it. Praying cannot stop a clock. Americans are aging. Millions are squeezed for co-payments and deductibles. Millions are squeezed due to no health insurance. At present, this is a losing battle. According to Hewitt Associates, in 1998, employees nationwide paid out-of-pocket medical expenses of $385 per year. This year, it’s averaging $1,030. In addition, in 1998, health insurance premiums cost $630. This year employees are paying an average of $1,565. In 1998, employers covered 75% of the health expenses. This year that’s down to 68%. In essence, you have the underinsured and the uninsured. The average hourly paycheck cannot carry the burden of rising healthcare costs.
Saturday, June 05, 2004
6/5/06 Do You Feel Lucky Today?
You are in the chips. Congratulations. If you are a production or non-supervisory worker, your average hourly wages rose by 5 cents in May, and that’s after the 4 cent increase in April. That’s the good news. Unfortunately, your hours worked per week remained unchanged at 33.8 hours per week. That leaves plenty of time to place a bet on Smarty Jones. It could be worse. The number of unemployed persons remained unchanged in May at 8.2 million. That does not include the 80,000 dropped from the unemployment tally each week due to the loss of benefits. The unemployment rate has essentially remained the same since December 2003. The proportion of the population age 16 and over with jobs—remained at 62.2%. The civilian labor force participation rate was 65.9% for the fourth consecutive month. Also not counted as unemployed were another 1.5 million marginally attached to the labor force, about the same number as one year ago. There were 476,000 discouraged workers in May, also about the same number as a year earlier. The number of persons who had been jobless for 27 weeks or longer held at 1.8 million.
There are always bright spots. In May, construction employment grew by 37,000 and over the past 14 months the construction industry has added about 250,000 jobs. Essentially in the durable goods sector, 32,000 jobs were added in May, and most were in construction-related manufacturing industries, such as, fabricated metal products and wood products. Employment in temporary help was once again the real star in May, and in the last 13 months about 299,000 temp jobs have been added. Health care and social assistance added 36,000 jobs in May, and over the past year a total of 274,000 jobs. We can’t forget that old standby food services. That sector added 33,000 jobs in May, roughly the monthly increase for 2004. Lastly, the retail industry, and that includes building material and garden supply, food and beverage, and clothing stores, has added 142,000 jobs over the past year. These are the same sectors I have highlighted for the past year. Nothing has changed. I do want to include one thought. The unemployment rate for adult women is only 4.8%. It is more cost effective for businesses to hire women rather than men. For the same job, women, on average, only earn 75% or less than do the men. It is one more reason why the average hourly earnings per week has hardly increased over the past year, and when viewed in the light of rising inflation, the salaries and wages have declined.
Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago: “I don’t see anything not to like in this report.” He is talking about the employment report I just discussed. It’s not enough to state that 248,000 non-farm payroll jobs were added in May. One must also focus on the quality of those jobs. They continue to be lower paying and, for the most part, without benefits or with minor benefits. Do you know a great many people who can make ends meet on $528.63 per week before taxes? That’s what’s wrong with the employment picture. Too many Americans cannot earn a living leading to some quality of life. How much income can one expect from employment in service industries? This sector added 176,000 jobs in May and 294,000 in April. The leading area within the entire sector was temporary employment. That’s truly why the weekly hours worked remain at such a low level. I am certain of one thing. The weekly wages of $528.63 will not lead to a sustained recovery. It will not lead to the re-election of Bush. It will not lead to higher interest rates. Consumer spending will no longer carry the day.
I was happy to see that, in May, there was a net decrease of 27,000 government jobs. I also noticed that on Friday it was announced that more than 400 government jobs will be eliminated by Iowa Gov. Tom Vilsack in an effort to reduce the state’s budget gap.
Boeing continues to eliminate workers. In the state of Washington they shed 250 workers in April. IBM will cut 63 jobs at their Rational Software subsidiary in Redmond, Washington. Maytag will cut 20% of its salaried workforce or about 1,100 jobs.
The rate of growth in China’s car sales in the month of May dropped by more than 50% from the prior month. It is still a healthy 15% or so, but it won’t help carry the day for GM. With incentives rising to $5,000, GM needs a blowout performance from its China operations. They delivered in the first four months of 2004; however, with the curbing of car loans by the Chinese government, it would appear that results for the remainder of 2005 will reflect a significant slowdown.
The price for Brent crude fell 1.9% this week. U.S. crude futures closed below $39 per barrel, and 8% below the record intraday high set on Tuesday.
The race is 1 ½ miles. There are only nine horses entered in the Belmont Stakes. Based on past results, maybe four horses should be racing. When you have Secretariat and Mr. Prospector running through your veins, it might be realistic to see only one horse running. Bring two pairs of binoculars. You’ll see Smarty Jones in one and the other eight horses in the other binoculars. It will be a split screen race. The question is how lucky do you feel today? Can you pick the number of lengths Smarty will win by today? Will it be 13?
That’s my guess. Smarty can retire undefeated --- like Seattle Slew and Rocky Marciano.
Karen Taylor, co-owner with her husband of Seattle Slew: “When you looked him in the eye he would look into your soul.”
You are in the chips. Congratulations. If you are a production or non-supervisory worker, your average hourly wages rose by 5 cents in May, and that’s after the 4 cent increase in April. That’s the good news. Unfortunately, your hours worked per week remained unchanged at 33.8 hours per week. That leaves plenty of time to place a bet on Smarty Jones. It could be worse. The number of unemployed persons remained unchanged in May at 8.2 million. That does not include the 80,000 dropped from the unemployment tally each week due to the loss of benefits. The unemployment rate has essentially remained the same since December 2003. The proportion of the population age 16 and over with jobs—remained at 62.2%. The civilian labor force participation rate was 65.9% for the fourth consecutive month. Also not counted as unemployed were another 1.5 million marginally attached to the labor force, about the same number as one year ago. There were 476,000 discouraged workers in May, also about the same number as a year earlier. The number of persons who had been jobless for 27 weeks or longer held at 1.8 million.
There are always bright spots. In May, construction employment grew by 37,000 and over the past 14 months the construction industry has added about 250,000 jobs. Essentially in the durable goods sector, 32,000 jobs were added in May, and most were in construction-related manufacturing industries, such as, fabricated metal products and wood products. Employment in temporary help was once again the real star in May, and in the last 13 months about 299,000 temp jobs have been added. Health care and social assistance added 36,000 jobs in May, and over the past year a total of 274,000 jobs. We can’t forget that old standby food services. That sector added 33,000 jobs in May, roughly the monthly increase for 2004. Lastly, the retail industry, and that includes building material and garden supply, food and beverage, and clothing stores, has added 142,000 jobs over the past year. These are the same sectors I have highlighted for the past year. Nothing has changed. I do want to include one thought. The unemployment rate for adult women is only 4.8%. It is more cost effective for businesses to hire women rather than men. For the same job, women, on average, only earn 75% or less than do the men. It is one more reason why the average hourly earnings per week has hardly increased over the past year, and when viewed in the light of rising inflation, the salaries and wages have declined.
Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago: “I don’t see anything not to like in this report.” He is talking about the employment report I just discussed. It’s not enough to state that 248,000 non-farm payroll jobs were added in May. One must also focus on the quality of those jobs. They continue to be lower paying and, for the most part, without benefits or with minor benefits. Do you know a great many people who can make ends meet on $528.63 per week before taxes? That’s what’s wrong with the employment picture. Too many Americans cannot earn a living leading to some quality of life. How much income can one expect from employment in service industries? This sector added 176,000 jobs in May and 294,000 in April. The leading area within the entire sector was temporary employment. That’s truly why the weekly hours worked remain at such a low level. I am certain of one thing. The weekly wages of $528.63 will not lead to a sustained recovery. It will not lead to the re-election of Bush. It will not lead to higher interest rates. Consumer spending will no longer carry the day.
I was happy to see that, in May, there was a net decrease of 27,000 government jobs. I also noticed that on Friday it was announced that more than 400 government jobs will be eliminated by Iowa Gov. Tom Vilsack in an effort to reduce the state’s budget gap.
Boeing continues to eliminate workers. In the state of Washington they shed 250 workers in April. IBM will cut 63 jobs at their Rational Software subsidiary in Redmond, Washington. Maytag will cut 20% of its salaried workforce or about 1,100 jobs.
The rate of growth in China’s car sales in the month of May dropped by more than 50% from the prior month. It is still a healthy 15% or so, but it won’t help carry the day for GM. With incentives rising to $5,000, GM needs a blowout performance from its China operations. They delivered in the first four months of 2004; however, with the curbing of car loans by the Chinese government, it would appear that results for the remainder of 2005 will reflect a significant slowdown.
The price for Brent crude fell 1.9% this week. U.S. crude futures closed below $39 per barrel, and 8% below the record intraday high set on Tuesday.
The race is 1 ½ miles. There are only nine horses entered in the Belmont Stakes. Based on past results, maybe four horses should be racing. When you have Secretariat and Mr. Prospector running through your veins, it might be realistic to see only one horse running. Bring two pairs of binoculars. You’ll see Smarty Jones in one and the other eight horses in the other binoculars. It will be a split screen race. The question is how lucky do you feel today? Can you pick the number of lengths Smarty will win by today? Will it be 13?
That’s my guess. Smarty can retire undefeated --- like Seattle Slew and Rocky Marciano.
Karen Taylor, co-owner with her husband of Seattle Slew: “When you looked him in the eye he would look into your soul.”
Friday, June 04, 2004
6/4/03 Wholesale Gasoline Prices Plummet
Over the last two days wholesale gasoline prices fell by nearly 12 cents a gallon. It’s a start. OPEC boosted output quotas by 2 million barrels, and Mark Baxter, director of the Maguire Energy Institute at the SMU Cox School of Business, stated this increase in output could take 35 cents a gallon off the price of gasoline. Also contributing to the price decline was the 1.3 million barrels rise in U.S. gasoline reserves. U.S. oil stockpiles rose by 2.8 million barrels in the week ended May 28. Crude is trading under $39 a barrel. The price will decline further the old-fashioned way—supply will outstrip demand.
Rather noteworthy is the Rocket at 8-0 and now with 318 career wins.
U.S. employers announced plans in May to cut 73,368 jobs, a 6.9% increase over the same month a year earlier, according to Challenger, Gray, & Christmas. All the buzz is about new job creation. Low-paying, non-benefit, non-permanent jobs are hardly the American dream. Then again, it beats food stamps and the unemployment lines. The insured unemployment rate rose to 2.4% in the week ended May 22 from 2.3%. Thirty states and territories during that week reported an increase in new claims, while 23 had a decrease. This is hardly the stuff that signals strong job creation. It signals the jobless rate moving higher.
Seagate is cutting 7% of its workforce or 2,900 workers.
The story at Intel is the turnaround of flash memory for cell phones. After a big loss in 2003, it is nearing profitability and will turn into the green in 2005.
The ISM’s non-manufacturing index for new orders fell to 61.3 from 65.6 in April. It suggests a slowing services sector in the months to come.
Continental Air’s CEO Bethune: “As to the financial condition of the industry—it is perilous, and the skies are only growing darker.” That is not true for Southwest Air or a few others.
There is a rumor that George Tenet will star in a new reality TV show called “The Fall Guy.”
Over the last two days wholesale gasoline prices fell by nearly 12 cents a gallon. It’s a start. OPEC boosted output quotas by 2 million barrels, and Mark Baxter, director of the Maguire Energy Institute at the SMU Cox School of Business, stated this increase in output could take 35 cents a gallon off the price of gasoline. Also contributing to the price decline was the 1.3 million barrels rise in U.S. gasoline reserves. U.S. oil stockpiles rose by 2.8 million barrels in the week ended May 28. Crude is trading under $39 a barrel. The price will decline further the old-fashioned way—supply will outstrip demand.
Rather noteworthy is the Rocket at 8-0 and now with 318 career wins.
U.S. employers announced plans in May to cut 73,368 jobs, a 6.9% increase over the same month a year earlier, according to Challenger, Gray, & Christmas. All the buzz is about new job creation. Low-paying, non-benefit, non-permanent jobs are hardly the American dream. Then again, it beats food stamps and the unemployment lines. The insured unemployment rate rose to 2.4% in the week ended May 22 from 2.3%. Thirty states and territories during that week reported an increase in new claims, while 23 had a decrease. This is hardly the stuff that signals strong job creation. It signals the jobless rate moving higher.
Seagate is cutting 7% of its workforce or 2,900 workers.
The story at Intel is the turnaround of flash memory for cell phones. After a big loss in 2003, it is nearing profitability and will turn into the green in 2005.
The ISM’s non-manufacturing index for new orders fell to 61.3 from 65.6 in April. It suggests a slowing services sector in the months to come.
Continental Air’s CEO Bethune: “As to the financial condition of the industry—it is perilous, and the skies are only growing darker.” That is not true for Southwest Air or a few others.
There is a rumor that George Tenet will star in a new reality TV show called “The Fall Guy.”
Thursday, June 03, 2004
6/3/04 National Hunger Awareness Day
Bill Shore, executive director of Share Our Strength: “There are two kinds of poverty in America: There are those who don’t have and those who don’t know. The majority of Americans are fortunate not to be in the category of those who don’t have. Too many have been willing to remain in the category of those who don’t know.”
Food stamps are used by more than 10 million households. There are more than 65,000 soup kitchens that feed almost 20 million Americans.
MIT’s Leonard Guarante: “ When there’s plenty of food, we reproduce and die. When there’s famine, we don’t reproduce, but we age more slowly to ensure survival.”
For the first time in 122 years, on June 8, Venus will cross the path of the Sun. By calculating how long it takes Venus to cross the Sun, one can figure the distance from the Earth to the Sun. The transit begins on June 6.
Yemen is known for khat, coffee, and Mohammed bin Laden. Osama is the 17th son of Mohammed. Maybe, with over 50 children in the family, Osama was lacking in quality time with his father.
King Fahd of Saudi Arabia after 9/11: “bin Laden children are all over America. Take measures to protect the innocents.” Three days after 9/11 a private charter plane flew these children out of the United States. The FBI supervised this effort. It’s pay back time. The Saudi oil will flow to the max.
Qantas will re-launch direct flights from Sydney to Shanghai and Bombay. Quantas executive general manager John Borghetti stated “we believe it is the future for us—India and China. Official figures show 176,000 visitors from China arrived in Australia in 2003, and the number is expected to grow to 960,000 by 2013. The number of Indians traveling overseas is expected to rise from 4.7 million last year to 50 million in 2020.
General Motors is raising the cash rebates on most of its 2003 and 2004 model year vehicles to $5,000 from the present $4,500. I’m so happy that GM is telling the world how great demand is for their vehicles.
According to AutoVIBES, nearly 50% of car buyers state gas prices are affecting their purchase decisions. The survey indicated that, after the recent gasoline price increases, a good number of shoppers “are now taking a second look at vehicles they wouldn’t normally consider.”
The Western Washington (that includes Seattle and its environs) chapter of the National Association of Purchasing Managers stated its index fell in May for the second monthly decline in a row. The index fell to 58 from April’s 60.5. March’s level was 68.3. Current production and new orders are down significantly over the past two months, and inventories are forecast to drop over the next 90 days.
The Boeing Employees’ Credit Union is laying off 70 workers in the Puget Sound region. The credit union has 360,000 members and there will be 800 staff members after the job cuts.
Bill Shore, executive director of Share Our Strength: “There are two kinds of poverty in America: There are those who don’t have and those who don’t know. The majority of Americans are fortunate not to be in the category of those who don’t have. Too many have been willing to remain in the category of those who don’t know.”
Food stamps are used by more than 10 million households. There are more than 65,000 soup kitchens that feed almost 20 million Americans.
MIT’s Leonard Guarante: “ When there’s plenty of food, we reproduce and die. When there’s famine, we don’t reproduce, but we age more slowly to ensure survival.”
For the first time in 122 years, on June 8, Venus will cross the path of the Sun. By calculating how long it takes Venus to cross the Sun, one can figure the distance from the Earth to the Sun. The transit begins on June 6.
Yemen is known for khat, coffee, and Mohammed bin Laden. Osama is the 17th son of Mohammed. Maybe, with over 50 children in the family, Osama was lacking in quality time with his father.
King Fahd of Saudi Arabia after 9/11: “bin Laden children are all over America. Take measures to protect the innocents.” Three days after 9/11 a private charter plane flew these children out of the United States. The FBI supervised this effort. It’s pay back time. The Saudi oil will flow to the max.
Qantas will re-launch direct flights from Sydney to Shanghai and Bombay. Quantas executive general manager John Borghetti stated “we believe it is the future for us—India and China. Official figures show 176,000 visitors from China arrived in Australia in 2003, and the number is expected to grow to 960,000 by 2013. The number of Indians traveling overseas is expected to rise from 4.7 million last year to 50 million in 2020.
General Motors is raising the cash rebates on most of its 2003 and 2004 model year vehicles to $5,000 from the present $4,500. I’m so happy that GM is telling the world how great demand is for their vehicles.
According to AutoVIBES, nearly 50% of car buyers state gas prices are affecting their purchase decisions. The survey indicated that, after the recent gasoline price increases, a good number of shoppers “are now taking a second look at vehicles they wouldn’t normally consider.”
The Western Washington (that includes Seattle and its environs) chapter of the National Association of Purchasing Managers stated its index fell in May for the second monthly decline in a row. The index fell to 58 from April’s 60.5. March’s level was 68.3. Current production and new orders are down significantly over the past two months, and inventories are forecast to drop over the next 90 days.
The Boeing Employees’ Credit Union is laying off 70 workers in the Puget Sound region. The credit union has 360,000 members and there will be 800 staff members after the job cuts.
Wednesday, June 02, 2004
6/2/04 The Spigot Will Drown The Speculators
Make no mistake. The thugs will not win this battle. The specs will get hosed. The spigot will open wide. The Qatari minister, Abdullah bin Hamad al-Attiyah,stated it best when he remarked "everybody should produce what they want over the next few months." For the near future, at least, OPEC holds the key to the spigot. To fight their will is stupid. They have a need to bring down oil prices. These guys want the world's economic engine to keep churning away. Sky high oil prices are bad for business and bad for the buyers of their oil. Whether they produce 26 million barrels of oil a day or a slightly different number, the daily spigot will lean on the price of oil. Security will increase around the key areas of the spigot. That has begun. Forget the headlines. Pay attention to the decisions out of OPEC on Thursday. Yesterday's spike in oil will prove, in my view, the high point for a considerable period of time. If the consumers of oil and gas do their part and cutback on usage, then the price has an opportunity to truly decline by $10 per barrel.
Will Mel Karmazin go to Disney? If I were a Disney board member, I'd want to talk to him about the top job.
Make no mistake. The thugs will not win this battle. The specs will get hosed. The spigot will open wide. The Qatari minister, Abdullah bin Hamad al-Attiyah,stated it best when he remarked "everybody should produce what they want over the next few months." For the near future, at least, OPEC holds the key to the spigot. To fight their will is stupid. They have a need to bring down oil prices. These guys want the world's economic engine to keep churning away. Sky high oil prices are bad for business and bad for the buyers of their oil. Whether they produce 26 million barrels of oil a day or a slightly different number, the daily spigot will lean on the price of oil. Security will increase around the key areas of the spigot. That has begun. Forget the headlines. Pay attention to the decisions out of OPEC on Thursday. Yesterday's spike in oil will prove, in my view, the high point for a considerable period of time. If the consumers of oil and gas do their part and cutback on usage, then the price has an opportunity to truly decline by $10 per barrel.
Will Mel Karmazin go to Disney? If I were a Disney board member, I'd want to talk to him about the top job.
Tuesday, June 01, 2004
6/1/04 The Bench
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new veh
OK, well, i have stuff to do before i leave at 9:30 to go pick up the snack.
BYEBYE
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new veh
OK, well, i have stuff to do before i leave at 9:30 to go pick up the snack.
BYEBYE
6/1/04 The Bench
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new vehicle sales last month.
If Mel Karmazin does leave Viacom, it would be a blow to the leadership of the company.
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new vehicle sales last month.
If Mel Karmazin does leave Viacom, it would be a blow to the leadership of the company.
Monday, May 31, 2004
5/31/04 The Day After
Yesterday, over 800 pairs of combat boots, each symbolizing a U.S. soldier killed in Iraq, lined Upper Senate Park in front of the Capitol Building in Washington, DC.
Prior to yesterday, there had been attacks in Yanbu and Basra. On Sunday, al-Qaeda attacked Khobar in Saudi Arabia and killed 22 civilians. Khobar hasn't any production, export, or oil refining facilities, and yet, crude oil futures jumped sharply in Asian trading. Al-Qaeda is trying to send a message to the Saudis prior to Thursday's OPEC meeting. These attacks can only prove detrimental to al-Qaeda.
Tornadoes and storms once again hit many parts of the U.S. Nebraska, Oklahoma, Indiana, Kentucky, Tennessee, Illinois, Missouri, and Kansas were all impacted yesterday. The weather is beginning to play a more hazardous role in the lives of many Americans.
McDonald's has 56 outlets in India and "will add at least 15 new restaurants in the current year." It's first store opened in New Delhi in 1996. The menu is quite different with McCurry Pan and McAloo Tikki potato patties in strong demand.
Yesterday, over 800 pairs of combat boots, each symbolizing a U.S. soldier killed in Iraq, lined Upper Senate Park in front of the Capitol Building in Washington, DC.
Prior to yesterday, there had been attacks in Yanbu and Basra. On Sunday, al-Qaeda attacked Khobar in Saudi Arabia and killed 22 civilians. Khobar hasn't any production, export, or oil refining facilities, and yet, crude oil futures jumped sharply in Asian trading. Al-Qaeda is trying to send a message to the Saudis prior to Thursday's OPEC meeting. These attacks can only prove detrimental to al-Qaeda.
Tornadoes and storms once again hit many parts of the U.S. Nebraska, Oklahoma, Indiana, Kentucky, Tennessee, Illinois, Missouri, and Kansas were all impacted yesterday. The weather is beginning to play a more hazardous role in the lives of many Americans.
McDonald's has 56 outlets in India and "will add at least 15 new restaurants in the current year." It's first store opened in New Delhi in 1996. The menu is quite different with McCurry Pan and McAloo Tikki potato patties in strong demand.
Sunday, May 30, 2004
5/30/04 An Arm, A Leg, And Your First Born
There was a TV ad showing a gas station with three gas tanks. The unleaded tank with gas at $2.40 per gallon had a picture of an arm on it. The mid-fuel tank at $2.50 per gallon had a picture of a leg. Finally, the super unleaded tank at $2.60 per gallon had a picture of one's first born.
At the moment, hybrid cars are but a tiny dot on the auto scene. Toyota originally planned to make 36,000 Prius vehicles for the 2004 year. However, demand has been so strong that last month it started manufacturing an additional 11,000 cars at its Motomachi plant in Toyota City in Japan, which makes all Prius vehicles. Forty percent of the production goes to the U.S. where there is a four to six month waiting list to buy the car. The hybrid Civic is also in strong demand. There are new hybrids on the way: the Ford Escape, the Lexus RX 400 H, the Honda Accord, and the Toyota Highlander. One can see that American car manufacturers are almost absent from the list of fall arrivals. Their non-hybrid vehicles continue to mount in inventory. The declining profitability of their SUVs will hurt their bottom line performance. In time, the growing demand for hybrids will lessen gasoline usage. It may not happen today, but it will happen. Eventually, OPEC will feel it just as Kodak has felt the impact of digital photography. OPEC's greatest enemy is Toyota, and when it comes to brains, OPEC is no match.
According to the U.S. Department of Veterans Affairs, more than 25 million veterans are alive today. Of the 16 million service members during WWII, only about 4.4 million are living. These brave Americans understood the call of duty, and protected our freedoms with the strongest of wills accompanied by dignified honor.
There was a TV ad showing a gas station with three gas tanks. The unleaded tank with gas at $2.40 per gallon had a picture of an arm on it. The mid-fuel tank at $2.50 per gallon had a picture of a leg. Finally, the super unleaded tank at $2.60 per gallon had a picture of one's first born.
At the moment, hybrid cars are but a tiny dot on the auto scene. Toyota originally planned to make 36,000 Prius vehicles for the 2004 year. However, demand has been so strong that last month it started manufacturing an additional 11,000 cars at its Motomachi plant in Toyota City in Japan, which makes all Prius vehicles. Forty percent of the production goes to the U.S. where there is a four to six month waiting list to buy the car. The hybrid Civic is also in strong demand. There are new hybrids on the way: the Ford Escape, the Lexus RX 400 H, the Honda Accord, and the Toyota Highlander. One can see that American car manufacturers are almost absent from the list of fall arrivals. Their non-hybrid vehicles continue to mount in inventory. The declining profitability of their SUVs will hurt their bottom line performance. In time, the growing demand for hybrids will lessen gasoline usage. It may not happen today, but it will happen. Eventually, OPEC will feel it just as Kodak has felt the impact of digital photography. OPEC's greatest enemy is Toyota, and when it comes to brains, OPEC is no match.
According to the U.S. Department of Veterans Affairs, more than 25 million veterans are alive today. Of the 16 million service members during WWII, only about 4.4 million are living. These brave Americans understood the call of duty, and protected our freedoms with the strongest of wills accompanied by dignified honor.
Saturday, May 29, 2004
5/29/04 It's Telling
As we ponder over this Memorial Day weekend, I thought I might interrupt the various happenings with an observation that has proven helpful to me over the years. Whether it's the media, politicians, financial pundits, friends, or family members, often it is more meaningful to focus on what is not said rather than what has been said. The unspoken and the unwritten are frequently more telling and closer to the truth.
As we ponder over this Memorial Day weekend, I thought I might interrupt the various happenings with an observation that has proven helpful to me over the years. Whether it's the media, politicians, financial pundits, friends, or family members, often it is more meaningful to focus on what is not said rather than what has been said. The unspoken and the unwritten are frequently more telling and closer to the truth.
Thursday, May 27, 2004
5/28/04 Economic Uncertainty And Casino Gaming
Life must be a crap shoot for many Americans. According to the 2004 State of the States: The AGA Survey of Casino Entertainment, two million more Americans visited a casino in 2003 than in 2002. In fact, 53.4 million adult Americans went to casinos last year. These visitors made a total of 310 million trips to casinos in 2003, averaging 5.8 trips per person. According to statistics gathered primarily from state regulatory agencies, the 443 commercial casinos in 11 states nationwide generated more than $27 billion in gross gaming revenue in 2003, an increase of nearly 2% compared to 2002. From that revenue, casinos paid state and local governments $4.32 billion in direct gaming taxes. Employment figures rose slightly in 2003, with the industry providing jobs for 352,428 workers who earned more than $11.8 billion in salaries, including benefits and tips. Frank Fahrenkopf, Jr., president and CEO of the AGA, stated “what these numbers signify is that even when the country is facing an extended period of economic uncertainty, Americans still set aside a portion of their disposable income for fun and entertainment.”
U.S. Energy Secretary Abraham stated that the increase in output by Saudi Arabia would have a “significant effect on oil prices. We also have positive signs from Mexico, Nigeria, and Russia that production will rise to meet the global demand.” In response to those statements, light crude dropped about $1 to $39.75 per barrel. On the other hand, OPEC President Yusgiantoro stated OPEC probably would have to raise supply allocations by more than 2.3 million barrels per day or 10% to have much success in curbing speculation. In my view, rising prices will reduce demand and the latter will curtail speculation. Gasoline consumption needs to decline from the present 9 million barrels per day. It’s up to American drivers to make that happen.
While the Dow, S&P, and the Nasdaq have been focusing on oil prices, the dollar has resumed its downtrend. The dollar dropped to its lowest level versus the euro in over three weeks. The British pound rose to a six week high against the dollar. In addition, money keeps flowing from the dollar into the Japanese yen. Traders blame the weakness in the dollar on the rising threat of terrorism. That maybe a partial answer; however, with the demand for new houses dimming, rising inventories of SUVs, the impact of high gas prices on consumers, and the failure of jobless claims to experience a larger drop, there is a growing inkling that economic growth has topped out. The recent strength in the bond market appears to be confirming this message.
Government spending rose at a 2.9 percent annual rate last quarter rather than the initial estimate of 2 percent.
The latest GDP report showed after-tax corporate profits rose a muted 1.4 percent in the January-March period, compared with the fourth quarter. I would be surprised if the next quarter approaches that level of improvement.
According to the World Bank, the number of Chinese people subsisting on less than $1 a day has fallen from 490 million in 1981 to 88 million. During this period the country's output has increased more than eight fold and the average income has risen by 7% a year, passing $1,000 (currently £551) for the first time in 2003.
On Thursday, gold for June delivery rose $6.60 to close at $394.90 an ounce on the New York Mercantile Exchange. That's its highest closing level since April 27.
General Electric expects its 2005 revenues from China to increase 92 percent from last year to $5 billion, according to published reports in AFX News and the China Daily.
Banking and financial services company Washington Mutual Inc. has issued layoff notices to 170 employees at its Seattle headquarters.They will be effective on June 1.
Life must be a crap shoot for many Americans. According to the 2004 State of the States: The AGA Survey of Casino Entertainment, two million more Americans visited a casino in 2003 than in 2002. In fact, 53.4 million adult Americans went to casinos last year. These visitors made a total of 310 million trips to casinos in 2003, averaging 5.8 trips per person. According to statistics gathered primarily from state regulatory agencies, the 443 commercial casinos in 11 states nationwide generated more than $27 billion in gross gaming revenue in 2003, an increase of nearly 2% compared to 2002. From that revenue, casinos paid state and local governments $4.32 billion in direct gaming taxes. Employment figures rose slightly in 2003, with the industry providing jobs for 352,428 workers who earned more than $11.8 billion in salaries, including benefits and tips. Frank Fahrenkopf, Jr., president and CEO of the AGA, stated “what these numbers signify is that even when the country is facing an extended period of economic uncertainty, Americans still set aside a portion of their disposable income for fun and entertainment.”
U.S. Energy Secretary Abraham stated that the increase in output by Saudi Arabia would have a “significant effect on oil prices. We also have positive signs from Mexico, Nigeria, and Russia that production will rise to meet the global demand.” In response to those statements, light crude dropped about $1 to $39.75 per barrel. On the other hand, OPEC President Yusgiantoro stated OPEC probably would have to raise supply allocations by more than 2.3 million barrels per day or 10% to have much success in curbing speculation. In my view, rising prices will reduce demand and the latter will curtail speculation. Gasoline consumption needs to decline from the present 9 million barrels per day. It’s up to American drivers to make that happen.
While the Dow, S&P, and the Nasdaq have been focusing on oil prices, the dollar has resumed its downtrend. The dollar dropped to its lowest level versus the euro in over three weeks. The British pound rose to a six week high against the dollar. In addition, money keeps flowing from the dollar into the Japanese yen. Traders blame the weakness in the dollar on the rising threat of terrorism. That maybe a partial answer; however, with the demand for new houses dimming, rising inventories of SUVs, the impact of high gas prices on consumers, and the failure of jobless claims to experience a larger drop, there is a growing inkling that economic growth has topped out. The recent strength in the bond market appears to be confirming this message.
Government spending rose at a 2.9 percent annual rate last quarter rather than the initial estimate of 2 percent.
The latest GDP report showed after-tax corporate profits rose a muted 1.4 percent in the January-March period, compared with the fourth quarter. I would be surprised if the next quarter approaches that level of improvement.
According to the World Bank, the number of Chinese people subsisting on less than $1 a day has fallen from 490 million in 1981 to 88 million. During this period the country's output has increased more than eight fold and the average income has risen by 7% a year, passing $1,000 (currently £551) for the first time in 2003.
On Thursday, gold for June delivery rose $6.60 to close at $394.90 an ounce on the New York Mercantile Exchange. That's its highest closing level since April 27.
General Electric expects its 2005 revenues from China to increase 92 percent from last year to $5 billion, according to published reports in AFX News and the China Daily.
Banking and financial services company Washington Mutual Inc. has issued layoff notices to 170 employees at its Seattle headquarters.They will be effective on June 1.
5/27/04 Clear And Present Danger
Jay Watson, Wildlife Fire Program director for the Wilderness Society: “It all adds up to a real shortage of resources. This unpreparedness flies in the face of all the rhetoric we have heard from this Bush administration about the forest-fire crisis and the need for proactive fire prevention.” He referred to Bush unexpectedly grounding a fleet of 33 air tankers that are used to dump fire retardant and for refusing to provide extra money to hire temporary firefighters for this summer. Unless emergency funds are provided, there will be 3,000 fewer seasonal firefighters, or 30% less, this summer than last summer. Three weeks ago 29,000 acres burned in S. California and 28 homes were destroyed. In New Mexico, a state of emergency was declared after two wildfires blazed out of control.
It may come as a surprise to some that U.S. Agriculture Secretary Ann Veneman oversees the Forest Service. This is the same woman who is in charge of handling the outbreak of mad cow disease. With more than half of the nation’s 345,000 Army National Guard serving overseas in places such as Iraq and Afghanistan, there will most certainly be a shortage of manpower to combat wildfires this summer in California, Idaho, Montana, Oregon, Washington, New Mexico, and Arizona. After an unusually warm spring, six years of drought, and infestations by tree-killing beetles, there is a clear and present danger that this summer season will be accompanied by potentially devastating wildfires. Only after the fact, will Ann Veneman have a press conference announcing the steps being taken to fight the raging fires. By that time, they will be out of control.
While the employment of seasonal firefighters is sharply reduced, homeland security with its fight on terror continues to add to the non-farm payrolls. There is a recent report “so fresh that we haven’t even bound the pages yet,” stated Tom Clark, executive vice president of the Metro Denver Economic Development Corp. He describes the area being the “center of gravity for the military.” The report tallied 47,500 direct jobs and about 95,000 indirect or spinoff jobs. Of the direct jobs, 16,000 are in the private sector at Raytheon, Northrop Grumman, Boeing, and Merrick, and 31,500 are government employees. Clark stated that only California, Texas, and Florida are ahead of Colorado in defense and military job creation. The 142,500 jobs have generated an annual $9.7 billion payroll to the sate of Colorado. Bush and a larger government go hand-in-hand. This is hardly the picture of a fiscally conservative president.
In April, orders for big-ticket durable goods fell 2.9% after a gain of 5.7% in March and 3.9% in February. It was the largest decrease since the 6% registered in September 2002. Orders outside the defense sector declined 2.4% while non-defense capital goods excluding aircraft dropped 3.5%. Is this a trend reversal? In my view, the best we can hope for is a slow down in the GDP growth curve. Is there a present danger that a slowdown could result in a downturn? We’d need to ask the geniuses at the Fed for that answer.
New U.S. mortgage applications fell last week for a third straight week. Sales of new homes in April fell by 12%.
Stocks of gasoline inventories are running about 4.7 million barrels below the level at this time last year.
China’s PPI rose 5% in April from a year earlier. It was the largest increase since 1996. Their consumer prices rose 3.8% from a year earlier, and it was the largest increase in seven years.
India’s exports rose 19.55 in April over the same period last year. India’s goal is to achieve one percent of global trade by 2007.
Iranian OIL Minister Bijan Zanganeh: “Any OPEC quota increase should be based on consensus, be cautious, limited, and temporary.’
Jay Watson, Wildlife Fire Program director for the Wilderness Society: “It all adds up to a real shortage of resources. This unpreparedness flies in the face of all the rhetoric we have heard from this Bush administration about the forest-fire crisis and the need for proactive fire prevention.” He referred to Bush unexpectedly grounding a fleet of 33 air tankers that are used to dump fire retardant and for refusing to provide extra money to hire temporary firefighters for this summer. Unless emergency funds are provided, there will be 3,000 fewer seasonal firefighters, or 30% less, this summer than last summer. Three weeks ago 29,000 acres burned in S. California and 28 homes were destroyed. In New Mexico, a state of emergency was declared after two wildfires blazed out of control.
It may come as a surprise to some that U.S. Agriculture Secretary Ann Veneman oversees the Forest Service. This is the same woman who is in charge of handling the outbreak of mad cow disease. With more than half of the nation’s 345,000 Army National Guard serving overseas in places such as Iraq and Afghanistan, there will most certainly be a shortage of manpower to combat wildfires this summer in California, Idaho, Montana, Oregon, Washington, New Mexico, and Arizona. After an unusually warm spring, six years of drought, and infestations by tree-killing beetles, there is a clear and present danger that this summer season will be accompanied by potentially devastating wildfires. Only after the fact, will Ann Veneman have a press conference announcing the steps being taken to fight the raging fires. By that time, they will be out of control.
While the employment of seasonal firefighters is sharply reduced, homeland security with its fight on terror continues to add to the non-farm payrolls. There is a recent report “so fresh that we haven’t even bound the pages yet,” stated Tom Clark, executive vice president of the Metro Denver Economic Development Corp. He describes the area being the “center of gravity for the military.” The report tallied 47,500 direct jobs and about 95,000 indirect or spinoff jobs. Of the direct jobs, 16,000 are in the private sector at Raytheon, Northrop Grumman, Boeing, and Merrick, and 31,500 are government employees. Clark stated that only California, Texas, and Florida are ahead of Colorado in defense and military job creation. The 142,500 jobs have generated an annual $9.7 billion payroll to the sate of Colorado. Bush and a larger government go hand-in-hand. This is hardly the picture of a fiscally conservative president.
In April, orders for big-ticket durable goods fell 2.9% after a gain of 5.7% in March and 3.9% in February. It was the largest decrease since the 6% registered in September 2002. Orders outside the defense sector declined 2.4% while non-defense capital goods excluding aircraft dropped 3.5%. Is this a trend reversal? In my view, the best we can hope for is a slow down in the GDP growth curve. Is there a present danger that a slowdown could result in a downturn? We’d need to ask the geniuses at the Fed for that answer.
New U.S. mortgage applications fell last week for a third straight week. Sales of new homes in April fell by 12%.
Stocks of gasoline inventories are running about 4.7 million barrels below the level at this time last year.
China’s PPI rose 5% in April from a year earlier. It was the largest increase since 1996. Their consumer prices rose 3.8% from a year earlier, and it was the largest increase in seven years.
India’s exports rose 19.55 in April over the same period last year. India’s goal is to achieve one percent of global trade by 2007.
Iranian OIL Minister Bijan Zanganeh: “Any OPEC quota increase should be based on consensus, be cautious, limited, and temporary.’
Wednesday, May 26, 2004
5/26/04 A Closer Look
Richard Branson: “Like old trees, some airlines deserve to die.”
Bush’s five-step program for Iraqi sovereignty is halfway there to a 10-step recovery plan. Maybe the plan should be outsourced to AA.
Not all nations are created equal. Despite record high prices for oil imports, Japan’s trade surplus rose 30% in April from a year earlier. The eurozone region had a current account surplus of 12.4 billion euros in March. It’s no wonder the rally in the dollar has hit a brick wall.
All eyes are on the Energy Information Administration data to be released today at 10:30 am EDT. A Reuters survey suggests gas supplies will be up by 1.2 million barrels for the latest week and crude oil stocks will have had a rise of 1.6 million barrels. The market’s strong rally yesterday reflected Tuesday’s 1.4% decline in the price of crude oil. For my money, other matters carry equal and/or more weight.
According to the AARP Public Policy Institute report, prices for 197 drugs most commonly prescribed for older Americans rose by an average of 27.6% over the past four years, almost triple the overall rate of inflation during this period. Prices of the top 30 medicines used by seniors increased by more than four times the rate of inflation in the past year alone.
According to a survey conducted for Robert Half Technology, CIOs are cautious about Q3 IT hiring. Eight percent of executives expect to add IT staff and three percent plan personnel cutbacks. The net five percent hiring increase compares with a net nine percent forecast last quarter. Eighty eight percent plan to maintain existing staff levels. The survey noted that “businesses that overstaffed and experienced layoffs during the recession are taking a more strategic and measured approach to hiring today. Many managers are initiating projects previously on hold due to budget constraints. However, they are carefully analyzing their requirements before adding full-time IT employees and relying on project professionals for short-term demands.” Prior to buying a tech stock, it might be wise to look around the corner in order to see business beyond short-term demands. The P/E ratios, for the most part, reflect a vision of clear sailing for the longer term. If that were true, more insiders would most likely be buying shares in their own company.
The Conference Board’s latest monthly survey indicated that the proportion of consumers anticipating an increase in their incomes declined again and is now at 16.8%, down from 17.4% last month. In other words, 83.2% see no increase in their incomes. The survey didn’t reveal what percentage anticipated a decrease in their incomes. If there were such a rush to hire, then one might expect some upward pressure on wages and salaries. As the CIO survey indicates for Q3, for example, 88% are not hiring.
Insanity reigns. According to the California Association of Realtors, the median price of an existing home in California in April increased 24.6% and sales increased 9.8% compared tot he same period a year ago. In just the one month of April, the median price increased 5.8% compared to March’s numbers and stands at $453,590. Can you imagine what the price would be if people were not moving out of the state?
Wal-Mart has a 37.8% stake in Japan’s Seiyu. A company spokesperson stated they would likely exercise their option to increase ownership to 50.1% in 2005.
In April, China’s M2 money supply surged 19%. Outstanding loans in both yuan and foreign currency rose 20%. Fixed-asset investment rose 43% in the first quarter. If the Chinese government is attempting to cool the economy, their efforts have not proven too successful. Their central bank stated that, only in the second half of this year, would a slowdown start to emerge as government policies come through the system. Maybe then shipping costs will decrease along with the prices for soybeans, coal, copper, aluminum, tin, crude oil, and many other widely used commodities.
India-China bilateral trade surged 88% in the first quarter of 2004 to $3.13 billion, and appears on its way to exceed $10 billion on an annual basis for the first time.
John Kay: “However it comes about, the inevitable consequence of the U.S. ceasing to spend more than it produces is that other countries must cease to produce more than they spend. The solution to America’s problems will not be a problem for America alone.”
At some point reality will hit Boeing shareholders. Their management continues to expound the theory that the Boeing tanker deal has simply been delayed--this time for another six months. I strongly suggest the company’s board of directors instruct the CEO to, at the very least, revise downward earnings projections for 2004.
There hasn’t been a new oil refinery built in the U.S. since 1976.
Hans Blix remarked that Bush and Blair “may have been sincerely convinced that there were weapons of mass destruction in Iraq like some were convinced of the existence of witches in the 18th century.”
Richard Branson: “Like old trees, some airlines deserve to die.”
Bush’s five-step program for Iraqi sovereignty is halfway there to a 10-step recovery plan. Maybe the plan should be outsourced to AA.
Not all nations are created equal. Despite record high prices for oil imports, Japan’s trade surplus rose 30% in April from a year earlier. The eurozone region had a current account surplus of 12.4 billion euros in March. It’s no wonder the rally in the dollar has hit a brick wall.
All eyes are on the Energy Information Administration data to be released today at 10:30 am EDT. A Reuters survey suggests gas supplies will be up by 1.2 million barrels for the latest week and crude oil stocks will have had a rise of 1.6 million barrels. The market’s strong rally yesterday reflected Tuesday’s 1.4% decline in the price of crude oil. For my money, other matters carry equal and/or more weight.
According to the AARP Public Policy Institute report, prices for 197 drugs most commonly prescribed for older Americans rose by an average of 27.6% over the past four years, almost triple the overall rate of inflation during this period. Prices of the top 30 medicines used by seniors increased by more than four times the rate of inflation in the past year alone.
According to a survey conducted for Robert Half Technology, CIOs are cautious about Q3 IT hiring. Eight percent of executives expect to add IT staff and three percent plan personnel cutbacks. The net five percent hiring increase compares with a net nine percent forecast last quarter. Eighty eight percent plan to maintain existing staff levels. The survey noted that “businesses that overstaffed and experienced layoffs during the recession are taking a more strategic and measured approach to hiring today. Many managers are initiating projects previously on hold due to budget constraints. However, they are carefully analyzing their requirements before adding full-time IT employees and relying on project professionals for short-term demands.” Prior to buying a tech stock, it might be wise to look around the corner in order to see business beyond short-term demands. The P/E ratios, for the most part, reflect a vision of clear sailing for the longer term. If that were true, more insiders would most likely be buying shares in their own company.
The Conference Board’s latest monthly survey indicated that the proportion of consumers anticipating an increase in their incomes declined again and is now at 16.8%, down from 17.4% last month. In other words, 83.2% see no increase in their incomes. The survey didn’t reveal what percentage anticipated a decrease in their incomes. If there were such a rush to hire, then one might expect some upward pressure on wages and salaries. As the CIO survey indicates for Q3, for example, 88% are not hiring.
Insanity reigns. According to the California Association of Realtors, the median price of an existing home in California in April increased 24.6% and sales increased 9.8% compared tot he same period a year ago. In just the one month of April, the median price increased 5.8% compared to March’s numbers and stands at $453,590. Can you imagine what the price would be if people were not moving out of the state?
Wal-Mart has a 37.8% stake in Japan’s Seiyu. A company spokesperson stated they would likely exercise their option to increase ownership to 50.1% in 2005.
In April, China’s M2 money supply surged 19%. Outstanding loans in both yuan and foreign currency rose 20%. Fixed-asset investment rose 43% in the first quarter. If the Chinese government is attempting to cool the economy, their efforts have not proven too successful. Their central bank stated that, only in the second half of this year, would a slowdown start to emerge as government policies come through the system. Maybe then shipping costs will decrease along with the prices for soybeans, coal, copper, aluminum, tin, crude oil, and many other widely used commodities.
India-China bilateral trade surged 88% in the first quarter of 2004 to $3.13 billion, and appears on its way to exceed $10 billion on an annual basis for the first time.
John Kay: “However it comes about, the inevitable consequence of the U.S. ceasing to spend more than it produces is that other countries must cease to produce more than they spend. The solution to America’s problems will not be a problem for America alone.”
At some point reality will hit Boeing shareholders. Their management continues to expound the theory that the Boeing tanker deal has simply been delayed--this time for another six months. I strongly suggest the company’s board of directors instruct the CEO to, at the very least, revise downward earnings projections for 2004.
There hasn’t been a new oil refinery built in the U.S. since 1976.
Hans Blix remarked that Bush and Blair “may have been sincerely convinced that there were weapons of mass destruction in Iraq like some were convinced of the existence of witches in the 18th century.”
Tuesday, May 25, 2004
5/25/04 Record High Gasoline Prices Take A Toll
Over the past week, the average retail price for gasoline has jumped to $2.07 a gallon. In a survey of 400 Michigan residents, 38% of those planning a trip Memorial Day weekend stated the change in gasoline prices will affect their travel plans, the highest percentage since 2000, AAA Michigan reported. Last year the percentage had declined to 15%. The group stated “the survey results suggest that the economy and high gas prices continue to affect domestic travel plans.”
Last week I noted that Continental Airlines had raised its fares $10 each way for flights under 1,000 miles and $20 each way for flights over 1,000 miles in an effort to offset soaring fuel costs. Yesterday Continental and other airlines dropped this fare increase. You can expect benefit and wage concessions and, at the very least, furloughs at many major airlines. The higher fuel costs will result in an extra $750 million in operating expenses at United. If the higher fuel costs can’t be passed along, survival may depend on significant employee cuts.
Fifty percent of India’s population is under 25 years of age. Fifty percent of their GDP comes from services with agriculture and manufacturing contributing 25 percent each. P.D. Samududra, Executive Director, Uhde India Ltd, cautioned “ a lot of people are indulging in wishful thinking that India will become an economic superpower by 2020. But, we have to realize that while India certainly has great potential, she has to first tackle more pressing issues like high level of poverty, lack of proper education of the masses, inadequate investments in infrastructure facilities such as water, power, and roads, to name only a few issues.”
Some 109 tornadoes were reported over this past weekend in the plains states. Storms and heavy rains produced flooding from Wisconsin to parts of Iowa.
Retired Marine General Anthony Zinni, former chief of U.S. Central Command, stated that planning for the Iraq war and its aftermath had been flawed from the start. He stated “somebody has screwed up. And at this level and at this stage, it should be evident to everybody that they’ve screwed up. And whose heads are rolling on this? That’s what bothers me most.” So far, the only head to roll appears to be that of Sanchez’s. There will be others.
It was reported that the average Mexican factory worker earns $300 per month or triple the average wage in China. Abel Saavedra, director of international marketing at Mexican shoemaker Botas Industriales de Piletas, stated “we can’t compete with those costs. Basically, it’s all about price.”
As the operating margins continue to increase at our domestic oil refining companies, they should maintain a watchful eye on the price of gas at the pump. Demand does matter. Record high prices do damper demand. Someone has to absorb those higher prices and costs. The headlines will soon show cutbacks in economic growth forecasts and an upswing in announced employee layoffs.
Ben Wallace blocks more shots than an armored Humvee.
Over the past week, the average retail price for gasoline has jumped to $2.07 a gallon. In a survey of 400 Michigan residents, 38% of those planning a trip Memorial Day weekend stated the change in gasoline prices will affect their travel plans, the highest percentage since 2000, AAA Michigan reported. Last year the percentage had declined to 15%. The group stated “the survey results suggest that the economy and high gas prices continue to affect domestic travel plans.”
Last week I noted that Continental Airlines had raised its fares $10 each way for flights under 1,000 miles and $20 each way for flights over 1,000 miles in an effort to offset soaring fuel costs. Yesterday Continental and other airlines dropped this fare increase. You can expect benefit and wage concessions and, at the very least, furloughs at many major airlines. The higher fuel costs will result in an extra $750 million in operating expenses at United. If the higher fuel costs can’t be passed along, survival may depend on significant employee cuts.
Fifty percent of India’s population is under 25 years of age. Fifty percent of their GDP comes from services with agriculture and manufacturing contributing 25 percent each. P.D. Samududra, Executive Director, Uhde India Ltd, cautioned “ a lot of people are indulging in wishful thinking that India will become an economic superpower by 2020. But, we have to realize that while India certainly has great potential, she has to first tackle more pressing issues like high level of poverty, lack of proper education of the masses, inadequate investments in infrastructure facilities such as water, power, and roads, to name only a few issues.”
Some 109 tornadoes were reported over this past weekend in the plains states. Storms and heavy rains produced flooding from Wisconsin to parts of Iowa.
Retired Marine General Anthony Zinni, former chief of U.S. Central Command, stated that planning for the Iraq war and its aftermath had been flawed from the start. He stated “somebody has screwed up. And at this level and at this stage, it should be evident to everybody that they’ve screwed up. And whose heads are rolling on this? That’s what bothers me most.” So far, the only head to roll appears to be that of Sanchez’s. There will be others.
It was reported that the average Mexican factory worker earns $300 per month or triple the average wage in China. Abel Saavedra, director of international marketing at Mexican shoemaker Botas Industriales de Piletas, stated “we can’t compete with those costs. Basically, it’s all about price.”
As the operating margins continue to increase at our domestic oil refining companies, they should maintain a watchful eye on the price of gas at the pump. Demand does matter. Record high prices do damper demand. Someone has to absorb those higher prices and costs. The headlines will soon show cutbacks in economic growth forecasts and an upswing in announced employee layoffs.
Ben Wallace blocks more shots than an armored Humvee.
Monday, May 24, 2004
5/24/04 The Real Shrek
There are several reports this morning that Saudi Arabia will boost production by 800,000 barrels a day, bringing daily output to 11.3 million barrels. The news was anticipated and led crude to drop from a 21-year high of $41.85 per barrel to this morning’s level approaching $39.50. On the surface this is most welcome. Unfortunately, the real problem has been set aside. In this year’s first quarter, China overtook Japan as the second largest consuming nation of oil. According to Japan’s Institute of Energy Economics, over the next 20 years China’s consumption of oil will rise by 16 million barrels per day to 35 million barrels per day. You might say “why should I worry?” You would be a fool not to have a real shrek. In the last two years look at what increased consumption by China has done to the prices for steel, copper, aluminum, soybeans, etc. The world cannot afford wars. Nations need to conserve cash flow and expend funds on alternative sources of energy. Without the latter, there will be an untenable price to pay for the six-fold increase expected to occur in the output of vehicles on China’s roads. What form of energy will power those 120 million vehicles? I hope you don’t believe Saudi Arabia’s daily output will make a difference. One additional near-term note of caution might be in order. As we approach Memorial Day, U.S. gasoline inventories are nearly 8 million barrels below the 5-year average at this time.
GM is shutting down its Moraine, Ohio assembly plant for one week. The closure will result in 4,000 workers temporarily being laid off. The plant makes three mid-size SUVs. Last week, another plant in Oklahoma City that makes mid-size SUVs was shut down temporarily. GM will tell you that sales of SUVs continue to exhibit strength. If that were the case, inventories would not exceed 100 days of supply. It is wise to pay attention to what people do, and not what they say. The same can be said for Bush’s speech tonight.
Listening to Bush, reminds me of weather in Iowa in May and June. Those are the most severe weather months for Iowa. Over this past weekend, up to 9 inches of rain and about 20 tornadoes were reported in 16 counties. Bush will tell you help is on the way. The water level may be rising in Iraq, as it were. Americans should not worry. It’s been worth all the deaths and all the wounded. Democracy is coming to Iraq on June 30. Senator Richard Lugar, a Republican from Indiana, remarked “unless the United States commits itself to a sustained program of repairing and building alliances, expanding trade, pursuing resolutions to regional conflicts, supporting democracy and development worldwide, and controlling weapons of mass destruction, we are likely to experience acts of catastrophic terrorism that would undermine our economy, damage our society, and kill hundreds of thousands, if not millions of people. The United States, as a nation, has not made this commitment.”
According to Fed statistics, since the end of 2001, outstanding household mortgages exceeded a growth rate of 10%, and for 2003, mortgage growth outstripped a 13% rate. The increasing demand for mortgages has led directly to escalating home prices.
Chicago has the nation’s third-largest school system. It faces a $100 million deficit. Approximately, 3,660 Chicago Public School workers. including 2,180 teachers, were laid off this past week.
Samsung and Toshiba control 90% of the $4.7 billion market for 512-megabit flash chips. According to dramaexchange.com, the average price for these chips has dropped to $9 from $21.50 in October. I expect the price to drop further over the course of this year.
There are several reports this morning that Saudi Arabia will boost production by 800,000 barrels a day, bringing daily output to 11.3 million barrels. The news was anticipated and led crude to drop from a 21-year high of $41.85 per barrel to this morning’s level approaching $39.50. On the surface this is most welcome. Unfortunately, the real problem has been set aside. In this year’s first quarter, China overtook Japan as the second largest consuming nation of oil. According to Japan’s Institute of Energy Economics, over the next 20 years China’s consumption of oil will rise by 16 million barrels per day to 35 million barrels per day. You might say “why should I worry?” You would be a fool not to have a real shrek. In the last two years look at what increased consumption by China has done to the prices for steel, copper, aluminum, soybeans, etc. The world cannot afford wars. Nations need to conserve cash flow and expend funds on alternative sources of energy. Without the latter, there will be an untenable price to pay for the six-fold increase expected to occur in the output of vehicles on China’s roads. What form of energy will power those 120 million vehicles? I hope you don’t believe Saudi Arabia’s daily output will make a difference. One additional near-term note of caution might be in order. As we approach Memorial Day, U.S. gasoline inventories are nearly 8 million barrels below the 5-year average at this time.
GM is shutting down its Moraine, Ohio assembly plant for one week. The closure will result in 4,000 workers temporarily being laid off. The plant makes three mid-size SUVs. Last week, another plant in Oklahoma City that makes mid-size SUVs was shut down temporarily. GM will tell you that sales of SUVs continue to exhibit strength. If that were the case, inventories would not exceed 100 days of supply. It is wise to pay attention to what people do, and not what they say. The same can be said for Bush’s speech tonight.
Listening to Bush, reminds me of weather in Iowa in May and June. Those are the most severe weather months for Iowa. Over this past weekend, up to 9 inches of rain and about 20 tornadoes were reported in 16 counties. Bush will tell you help is on the way. The water level may be rising in Iraq, as it were. Americans should not worry. It’s been worth all the deaths and all the wounded. Democracy is coming to Iraq on June 30. Senator Richard Lugar, a Republican from Indiana, remarked “unless the United States commits itself to a sustained program of repairing and building alliances, expanding trade, pursuing resolutions to regional conflicts, supporting democracy and development worldwide, and controlling weapons of mass destruction, we are likely to experience acts of catastrophic terrorism that would undermine our economy, damage our society, and kill hundreds of thousands, if not millions of people. The United States, as a nation, has not made this commitment.”
According to Fed statistics, since the end of 2001, outstanding household mortgages exceeded a growth rate of 10%, and for 2003, mortgage growth outstripped a 13% rate. The increasing demand for mortgages has led directly to escalating home prices.
Chicago has the nation’s third-largest school system. It faces a $100 million deficit. Approximately, 3,660 Chicago Public School workers. including 2,180 teachers, were laid off this past week.
Samsung and Toshiba control 90% of the $4.7 billion market for 512-megabit flash chips. According to dramaexchange.com, the average price for these chips has dropped to $9 from $21.50 in October. I expect the price to drop further over the course of this year.
Sunday, May 23, 2004
5/23/04 Staging
The first thought coming to mind is that of the Broadway stage or possibly the world as a stage. That’s not exactly what I have in mind. Most guys will not be familiar with the term “staging.” I am specifically referring to staging a home prior to its sale. Since its inception 30 years ago, it has been a cottage industry with few participants; however, that is changing.
Staging has become a recognized and accepted selling tool among West Coast real estate professionals. Over the past four years there have been studies comparing the results of staged and non-staged homes. On average, a staged home sells 50% faster and creates at least 5% additional realized value. The cost for the staging services can range from $25 per hour to $200 per hour or for a job in a very large home it can run as high as $50,000.
What is staging? It originated from the description ‘being on stage.’ The idea is to place the home, which is to be put on the market for sale, in the most appealing and sellable manner. Many stagers have their own furniture, fixtures, plants, accessories, etc. They transform your home into a showplace. When the potential buyer approaches the property, the idea is to make that home so appealing that the buyer gladly and willingly overbids the listing price. In the San Francisco Bay Area it is commonplace for a home to sell in one day and for the price to exceed the listing price by 15% or more. Many real estate agents demand that their sellers agree to have their home staged. The results have more than warranted the extra expense.
Staging creates an inviting picture. Everything is real. The paint on the wall can be changed a different color. The art work on the walls may be changed. The carpeting maybe changed. The décor is often transformed. At the same time, it is an illusion for the buyer and the seller. The seller’s home has never looked like this, and the buyer is viewing a home with multiple visual incentives. These staged incentives create an inviting and an appealing look to the buyer. As such, paying a higher price for this transformed masterpiece becomes a pill ready and willing to swallow.
Why do I focus on staging at this time? We are fast approaching the November 2 presidential election. The candidates will be staging their accomplishments and their goals for the future. There is nothing wrong with this endeavor except for one thing. The voter wants to buy the real deal. Bush was elected as a conservative. From a fiscal standpoint, he is the greatest political spender I have witnessed in my lifetime. The voters did not get what they were promised. In real estate, the sellers must list what’s wrong with the listed property. It is not simply buyer beware. In politics, it is buyer beware. To get elected, politicians frequently tell you what you want to hear. The Federal Reserve plays that game as well. While you are paying through the nose for milk and meat, the governors go around the country telling you that inflation is not a problem. Bush goes around the country focusing on the 600,000 new jobs created in the past two months. He is staging his economic policies. He tells you to stay the course with him. It doesn’t matter that your wages and salaries have been running below the inflation rate for the past three years. It doesn’t matter that 80,000 unemployed Americans have lost their benefits each week since December 23, 2003. Bush will stage his policies and change the décor. Buyer beware. The price you are paying is very dear. The price you are paying for the Fed’s staged economy is very dear. Zero down payments and zero percent financing are not sustainable. They are staged short-run policies designed to sell a car or a home or refinance your debt in the shortest time. The idea is to make you smile while you gladly swallow the daily consumer pill. Don’t look now. You need to call the Roto Rooter man.
The first thought coming to mind is that of the Broadway stage or possibly the world as a stage. That’s not exactly what I have in mind. Most guys will not be familiar with the term “staging.” I am specifically referring to staging a home prior to its sale. Since its inception 30 years ago, it has been a cottage industry with few participants; however, that is changing.
Staging has become a recognized and accepted selling tool among West Coast real estate professionals. Over the past four years there have been studies comparing the results of staged and non-staged homes. On average, a staged home sells 50% faster and creates at least 5% additional realized value. The cost for the staging services can range from $25 per hour to $200 per hour or for a job in a very large home it can run as high as $50,000.
What is staging? It originated from the description ‘being on stage.’ The idea is to place the home, which is to be put on the market for sale, in the most appealing and sellable manner. Many stagers have their own furniture, fixtures, plants, accessories, etc. They transform your home into a showplace. When the potential buyer approaches the property, the idea is to make that home so appealing that the buyer gladly and willingly overbids the listing price. In the San Francisco Bay Area it is commonplace for a home to sell in one day and for the price to exceed the listing price by 15% or more. Many real estate agents demand that their sellers agree to have their home staged. The results have more than warranted the extra expense.
Staging creates an inviting picture. Everything is real. The paint on the wall can be changed a different color. The art work on the walls may be changed. The carpeting maybe changed. The décor is often transformed. At the same time, it is an illusion for the buyer and the seller. The seller’s home has never looked like this, and the buyer is viewing a home with multiple visual incentives. These staged incentives create an inviting and an appealing look to the buyer. As such, paying a higher price for this transformed masterpiece becomes a pill ready and willing to swallow.
Why do I focus on staging at this time? We are fast approaching the November 2 presidential election. The candidates will be staging their accomplishments and their goals for the future. There is nothing wrong with this endeavor except for one thing. The voter wants to buy the real deal. Bush was elected as a conservative. From a fiscal standpoint, he is the greatest political spender I have witnessed in my lifetime. The voters did not get what they were promised. In real estate, the sellers must list what’s wrong with the listed property. It is not simply buyer beware. In politics, it is buyer beware. To get elected, politicians frequently tell you what you want to hear. The Federal Reserve plays that game as well. While you are paying through the nose for milk and meat, the governors go around the country telling you that inflation is not a problem. Bush goes around the country focusing on the 600,000 new jobs created in the past two months. He is staging his economic policies. He tells you to stay the course with him. It doesn’t matter that your wages and salaries have been running below the inflation rate for the past three years. It doesn’t matter that 80,000 unemployed Americans have lost their benefits each week since December 23, 2003. Bush will stage his policies and change the décor. Buyer beware. The price you are paying is very dear. The price you are paying for the Fed’s staged economy is very dear. Zero down payments and zero percent financing are not sustainable. They are staged short-run policies designed to sell a car or a home or refinance your debt in the shortest time. The idea is to make you smile while you gladly swallow the daily consumer pill. Don’t look now. You need to call the Roto Rooter man.
Saturday, May 22, 2004
5/22/04 Strategies
Prince Bandar bin Sultan: “Saudi Arabia will encourage OPEC to increase its production ceiling by more than 2 million barrels per day. We have determined, after reviewing updated projections for oil supply and demand, that this increase in oil production is necessary to maintain stability in the market and growth in the world economy. Saudi Arabia has already communicated to its customers that it will produce approximately 9 million barrels per day starting in June 2004.”
In its latest fiscal year, Mitsubishi Motors lost $1.9 billion while sales fell 35% to $22 billion. For the current fiscal year, the company forecasts a $2 billion loss on $20 billion in sales. They will close 2 plants and cut 11,000 jobs, nearly 25% of its global workforce.
David McCall, director of the United Steel Workers of America District 1 in Ohio: “ Timken’s closure announcement is premature, completely unnecessary and demonstrates the company’s profound disloyalty to Canton steelworkers and the community. Timken never even put a proposal on the table. Instead they ran to the media and cried wolf in the hope of terrifying thousands of families about the loss of their jobs., which is about the only thing their strategy has succeeded in doing. It takes more than talk about ‘flexibility’ and ‘restrictive work rules’ to create a globally competitive facility. It also requires the company’s commitment to eliminate inefficiency and waste at all levels, to maintain equipment and to invest in new technologies.”
On Friday, Pentagon officials revealed they have investigated the deaths of 37 prisoners held by U.S. forces in Iraq and Afghanistan since August 2002. The nine prisoner homicides are still under investigation. In a tenth case, a soldier was punished and dismissed from the Army for using excessive force after shooting to death a man in Iraq who was throwing rocks at him. The rest are attributed to natural causes or considered justifiable homicide. The latter would describe the use of deadly force against a dangerously violent prisoner.
It has often been stated that one can tell something about a person by the company that person keeps. I wonder what that indicates about Bush and the company he has shared with Kenny Boy Lay, Ahmad Chalabi, and Prince Bandar bin Sultan?
According to a survey by the Craft Yarn Council of America, nationwide more than 38 million people knit or crochet. Of those, the number under 45 has doubled to 18% since 1996. At least two knitting cafes have opened-- one in New York City and one in West Hollywood, CA.
Manmohan Sing, India’s new PM, coined the phrase “liberalization with a human face.” In a recent interview, he revealed his strategy for India: “Development will be the key priority. The aim of reforms would be to remove poverty and increase employment through relief to decentralized sectors…we are not pursuing the privatization process as a part of a ideological commitment to dismantle the public sector. India needs a strong public sector as well. Outside these strategic sectors , wherever public enterprises can compete on an equal footing with the private sector—domestic and foreign—there is no reason why they should not be allowed to go forward. If they cannot compete and end up becoming a drag on the exchequer, then privatization will help by all means. But the interest of the worker must be protected. Foreign direct investment will be more focused on key areas like manufacturing and technology.”
Prince Bandar bin Sultan: “Saudi Arabia will encourage OPEC to increase its production ceiling by more than 2 million barrels per day. We have determined, after reviewing updated projections for oil supply and demand, that this increase in oil production is necessary to maintain stability in the market and growth in the world economy. Saudi Arabia has already communicated to its customers that it will produce approximately 9 million barrels per day starting in June 2004.”
In its latest fiscal year, Mitsubishi Motors lost $1.9 billion while sales fell 35% to $22 billion. For the current fiscal year, the company forecasts a $2 billion loss on $20 billion in sales. They will close 2 plants and cut 11,000 jobs, nearly 25% of its global workforce.
David McCall, director of the United Steel Workers of America District 1 in Ohio: “ Timken’s closure announcement is premature, completely unnecessary and demonstrates the company’s profound disloyalty to Canton steelworkers and the community. Timken never even put a proposal on the table. Instead they ran to the media and cried wolf in the hope of terrifying thousands of families about the loss of their jobs., which is about the only thing their strategy has succeeded in doing. It takes more than talk about ‘flexibility’ and ‘restrictive work rules’ to create a globally competitive facility. It also requires the company’s commitment to eliminate inefficiency and waste at all levels, to maintain equipment and to invest in new technologies.”
On Friday, Pentagon officials revealed they have investigated the deaths of 37 prisoners held by U.S. forces in Iraq and Afghanistan since August 2002. The nine prisoner homicides are still under investigation. In a tenth case, a soldier was punished and dismissed from the Army for using excessive force after shooting to death a man in Iraq who was throwing rocks at him. The rest are attributed to natural causes or considered justifiable homicide. The latter would describe the use of deadly force against a dangerously violent prisoner.
It has often been stated that one can tell something about a person by the company that person keeps. I wonder what that indicates about Bush and the company he has shared with Kenny Boy Lay, Ahmad Chalabi, and Prince Bandar bin Sultan?
According to a survey by the Craft Yarn Council of America, nationwide more than 38 million people knit or crochet. Of those, the number under 45 has doubled to 18% since 1996. At least two knitting cafes have opened-- one in New York City and one in West Hollywood, CA.
Manmohan Sing, India’s new PM, coined the phrase “liberalization with a human face.” In a recent interview, he revealed his strategy for India: “Development will be the key priority. The aim of reforms would be to remove poverty and increase employment through relief to decentralized sectors…we are not pursuing the privatization process as a part of a ideological commitment to dismantle the public sector. India needs a strong public sector as well. Outside these strategic sectors , wherever public enterprises can compete on an equal footing with the private sector—domestic and foreign—there is no reason why they should not be allowed to go forward. If they cannot compete and end up becoming a drag on the exchequer, then privatization will help by all means. But the interest of the worker must be protected. Foreign direct investment will be more focused on key areas like manufacturing and technology.”
Thursday, May 20, 2004
5/21/04 The Pause That May Not Refresh
In the week ended May 8, 21 states and territories reported a decrease in new unemployment claims while 32 had an increase.
The Conference Board's LEI in April rose 0.1%; however, of the ten indicators comprising the index, 4 rose while 6 declined.
The Philly Fed manufacturing index in May fell to 23.8 from 32.5 in April. Economists were expecting 30.5. New orders fell to 18.3 from 26.1 in April. Shipments fell to 20.2 from 27.7. The lone bright spot was the employment index rising to 22.6 from 12.2.
According to Autodata, Ford Expedition sales fell about 34% in April from the prior year while Chevy Suburban models declined approximately 21% in this time period.
The Fed continues to print money. The money supply in April rose to $5.81 trillion from March's $5.78 trillion.
The figures are in from the IRS for the tax refunds. A total of $184.3 billion was received through April 30 compared with the prior year's $172.3 billion. The $12 billion differnce was less than expected.
When it comes to those on the Bush team, it's either their way or the highway. The latest example is House Speaker Dennis Hastert, R-Ill, who asked reporters if Sen. John McCain, R-Ariz., was a Republican. McCain, Olympia Snowe, Susan Collins, and Lincoln Chafee- all Republicans- are blocking the approval of Bush's budget plan and the Senate vote on the budget has been delayed due to insufficent votes for it. It appears that McCain and the other dissenting Republicans want any tax cuts and/or benefit increases to be offset by tax increases and/or spending cuts. The basic problem is that, during the past 3 1/2 Bush years, his budget has simply been a spending plan. It has combined with the Fed's printing press to produce irrational fiscal stimulus. I salute McCain and the three other Republican senators. Not all politicians have their heads where the sun doesn't shine.
Novartis' Sandoz division opened its third generic drug plant in India, and stated "it most likely will be the best cost competitive plant we will have worldwide."
In the week ended May 8, 21 states and territories reported a decrease in new unemployment claims while 32 had an increase.
The Conference Board's LEI in April rose 0.1%; however, of the ten indicators comprising the index, 4 rose while 6 declined.
The Philly Fed manufacturing index in May fell to 23.8 from 32.5 in April. Economists were expecting 30.5. New orders fell to 18.3 from 26.1 in April. Shipments fell to 20.2 from 27.7. The lone bright spot was the employment index rising to 22.6 from 12.2.
According to Autodata, Ford Expedition sales fell about 34% in April from the prior year while Chevy Suburban models declined approximately 21% in this time period.
The Fed continues to print money. The money supply in April rose to $5.81 trillion from March's $5.78 trillion.
The figures are in from the IRS for the tax refunds. A total of $184.3 billion was received through April 30 compared with the prior year's $172.3 billion. The $12 billion differnce was less than expected.
When it comes to those on the Bush team, it's either their way or the highway. The latest example is House Speaker Dennis Hastert, R-Ill, who asked reporters if Sen. John McCain, R-Ariz., was a Republican. McCain, Olympia Snowe, Susan Collins, and Lincoln Chafee- all Republicans- are blocking the approval of Bush's budget plan and the Senate vote on the budget has been delayed due to insufficent votes for it. It appears that McCain and the other dissenting Republicans want any tax cuts and/or benefit increases to be offset by tax increases and/or spending cuts. The basic problem is that, during the past 3 1/2 Bush years, his budget has simply been a spending plan. It has combined with the Fed's printing press to produce irrational fiscal stimulus. I salute McCain and the three other Republican senators. Not all politicians have their heads where the sun doesn't shine.
Novartis' Sandoz division opened its third generic drug plant in India, and stated "it most likely will be the best cost competitive plant we will have worldwide."
5/20/04 A Mid-Week Special
There are two types of court martials-- a special and a general. There is a big difference and one large similarity. The big difference is that in a special the maximum penalty is one year while a general carries no limitation. In both, anyone who knew of the crime, and did not act to undo that crime, is subject to a court martial. I only know what I have read and heard in the media about Spc. Jeremy Sivits. Even though Sivits received a felony conviction with a one year term, the fact that this was not a general court martial leads me to believe our government could be pursuing a whitewashing of this matter. If so, the world is watching and it won't work.
It's been 21 years since there has been a strike at SBC Communications. Approximately 100,000 union workers in 13 states will go on strike at 12:01 AM Friday and return to work at 12:01 AM May 25. The main grievances surround wages, healthcare benefits, and outsourcing. The latter has cost 29,000 SBC workers their jobs in the last three years.
In a recent informal survey, 9 out of 10 Iraqis see U.S. troops as occupiers. Muqtada al-Sadr is now seen as the second most popuklar Iraqi politician after al-Sistani.
Brocade Communications will cut 9% of its workforce.
India's Prime Minister-elect Manmohan Singh: "The time has come for India to emerge as an economic power...we are not pursuing privatization as part of our ideological commitment. India needs a srong private sector as also a public sector. We will not do anything which will throw large pools of workers jobless."
In the most recent week U.S. jobless claims rose 12,000 to 345,000 versus expectations of a decline to 328,000. The four week moving average did fall 2,750 to 333,500.
There are two types of court martials-- a special and a general. There is a big difference and one large similarity. The big difference is that in a special the maximum penalty is one year while a general carries no limitation. In both, anyone who knew of the crime, and did not act to undo that crime, is subject to a court martial. I only know what I have read and heard in the media about Spc. Jeremy Sivits. Even though Sivits received a felony conviction with a one year term, the fact that this was not a general court martial leads me to believe our government could be pursuing a whitewashing of this matter. If so, the world is watching and it won't work.
It's been 21 years since there has been a strike at SBC Communications. Approximately 100,000 union workers in 13 states will go on strike at 12:01 AM Friday and return to work at 12:01 AM May 25. The main grievances surround wages, healthcare benefits, and outsourcing. The latter has cost 29,000 SBC workers their jobs in the last three years.
In a recent informal survey, 9 out of 10 Iraqis see U.S. troops as occupiers. Muqtada al-Sadr is now seen as the second most popuklar Iraqi politician after al-Sistani.
Brocade Communications will cut 9% of its workforce.
India's Prime Minister-elect Manmohan Singh: "The time has come for India to emerge as an economic power...we are not pursuing privatization as part of our ideological commitment. India needs a srong private sector as also a public sector. We will not do anything which will throw large pools of workers jobless."
In the most recent week U.S. jobless claims rose 12,000 to 345,000 versus expectations of a decline to 328,000. The four week moving average did fall 2,750 to 333,500.
Wednesday, May 19, 2004
5/19/04 Someone Has To Pay
Continental Airlines Chairman and CEO Bethune: "None of us can afford to operate with these high fuel costs. If we are not successful in passing along these exorbitant fuel costs through higher fares, we will ultimately be forced to seek significant wage and benefit concessions and furloughs." It is the first time Continental has raised the possibility of cutting wages. The proposed wage increase is $10 eachway for flights up to 100 miles, and $20 each way for flights of more than 1,000 miles.
According to AAA, the average statewide cost of regular unleaded gasoline in California is $2.31 per gallon, up 44 cents from a year ago. California requires cleaner-burning fuel than other states, and this is one reason for the higher price.
Edmunds.com reported that the average manufacturer incentive per vehicle sold in the U.S. was $2,367 in April 2004, up $80 from April 2003, and down $12 from March 2004. In April 2004 Chrysler cut incentives by $659 to $2,944 per vehicle. GM increased incentives by $226 to $3,620 per vehicle, and Ford increased incentives by $107 to $2,914 per vehicle. This morning all three announced greater incentives for SUVs and other high gas consumption vehicles.
Keebler will move its cookie and cracker business to Battle Creek from its Elmhurst, Ill. location and cut 300 jobs.
According to a new study by the Center for Labor Market Studies at Norhteastern University, since November 2001, "almost none of the productivity gains ended up in wages and salaries. Combine that with the fact that firms didn't add new workers to their payrolls, and that's what made this recovery so unique." The study indicated that, for the first time in any economic recovery since the end of World War II, corporate profits received a larger share of the growth than labor did." Unfortunately, when inflation mounts in gasoline, natural gas, eggs, milk, meat, and other foodstuffs,something has to give. The average wage earner, those on Main Street, cannot live on love alone. Bethune needs to consider that his team of workers is facing some of the same problems Continental is. There is only one pie. There has to be enough food to go around for everyone. Mr. and Mrs. Public can't pass along the gas price increases. They have to absorb them. They're screwed. Forty four cents a gallon in one year hurts when wages and benefits don't keep up with productivity gains and/or the rise in inflation.
Continental Airlines Chairman and CEO Bethune: "None of us can afford to operate with these high fuel costs. If we are not successful in passing along these exorbitant fuel costs through higher fares, we will ultimately be forced to seek significant wage and benefit concessions and furloughs." It is the first time Continental has raised the possibility of cutting wages. The proposed wage increase is $10 eachway for flights up to 100 miles, and $20 each way for flights of more than 1,000 miles.
According to AAA, the average statewide cost of regular unleaded gasoline in California is $2.31 per gallon, up 44 cents from a year ago. California requires cleaner-burning fuel than other states, and this is one reason for the higher price.
Edmunds.com reported that the average manufacturer incentive per vehicle sold in the U.S. was $2,367 in April 2004, up $80 from April 2003, and down $12 from March 2004. In April 2004 Chrysler cut incentives by $659 to $2,944 per vehicle. GM increased incentives by $226 to $3,620 per vehicle, and Ford increased incentives by $107 to $2,914 per vehicle. This morning all three announced greater incentives for SUVs and other high gas consumption vehicles.
Keebler will move its cookie and cracker business to Battle Creek from its Elmhurst, Ill. location and cut 300 jobs.
According to a new study by the Center for Labor Market Studies at Norhteastern University, since November 2001, "almost none of the productivity gains ended up in wages and salaries. Combine that with the fact that firms didn't add new workers to their payrolls, and that's what made this recovery so unique." The study indicated that, for the first time in any economic recovery since the end of World War II, corporate profits received a larger share of the growth than labor did." Unfortunately, when inflation mounts in gasoline, natural gas, eggs, milk, meat, and other foodstuffs,something has to give. The average wage earner, those on Main Street, cannot live on love alone. Bethune needs to consider that his team of workers is facing some of the same problems Continental is. There is only one pie. There has to be enough food to go around for everyone. Mr. and Mrs. Public can't pass along the gas price increases. They have to absorb them. They're screwed. Forty four cents a gallon in one year hurts when wages and benefits don't keep up with productivity gains and/or the rise in inflation.
Tuesday, May 18, 2004
5/18/04 The Hummer Economy
When the history books are opened by the next generation, they will read how the Bush policies transformed a combat vehicle into a family car. Who better to accomplish this feat other than a wartime president? Through the passage of new tax legislation for farm vehicles weighing at least 6,000 pounds, demand for the Hummer was generated. This vehicle qualified in that "weight class." As such, by purchasing the Hummer, the buyer was eligible to receive a tax deduction of $100,000. The purchase had to be accomplished through a business enterprise and for such business. That was a lay-up. Sales for the Hummer moved along briskly thru December 2003. Of course, now came the question of whether the tax breaks would be extended. Hummer sales hit a brick wall. The demand was never truly real. Inventory is building on the dealer lots for this gas-devouring family off-the-road vehicle. It has poor ratings from every testing service. GM has no idea what to do with the inventory. They are bringing out new models. Hopefully, there is space out in the Mojave next to all the mothballed jets.
What is real? According to the Federal Reserve, household debt climbed at twice the pace of household incomes from the beginning of 2000 through the end of 2003. During this period, new mortgage debt increased about 50% or $2.3 trillion while consumer debt rose by 33% to $2 trillion during this period.
OPEC President Prnomo Yusgiantoro: "High oil prices can cause recession. We are not happy with high oil prices." U.S. crude settled at $41.55 per barrel and gas at the pump exceeds $2 per gallon on average.
Timkin on June 1 will raise prices on high speed steel products by 5%.
Descartes to cut 35% of its workforce or 130 employees.
According to economist Allen Smith, every penny of the $1.5 trillion generated by the 1983 Social Security tax increase is gone. Smith stated "this is the greatest fraud ever perpetuated on the American people."
According to Forrester Research, the number of U.S. business service and software jobs moving offshore will rise to 588,000 in 2004 from 315,000 in 2003. The loss of software programming, customer call-center and even legal paperwork positions should increase 40% in 2005 to 830,000 jobs over the number reached this year. They expect the 1 million mark to be eclipsed in 2006.
In the upcoming Illinois U.S. Senate race, Democrat Obama leads Republic Ryan 48 to 40 in the latest polls. The survey indicates that Obama is gaining more support from Republicans than Ryan is with Democrats. Could this be something to watch for in the November presidential election?
When the history books are opened by the next generation, they will read how the Bush policies transformed a combat vehicle into a family car. Who better to accomplish this feat other than a wartime president? Through the passage of new tax legislation for farm vehicles weighing at least 6,000 pounds, demand for the Hummer was generated. This vehicle qualified in that "weight class." As such, by purchasing the Hummer, the buyer was eligible to receive a tax deduction of $100,000. The purchase had to be accomplished through a business enterprise and for such business. That was a lay-up. Sales for the Hummer moved along briskly thru December 2003. Of course, now came the question of whether the tax breaks would be extended. Hummer sales hit a brick wall. The demand was never truly real. Inventory is building on the dealer lots for this gas-devouring family off-the-road vehicle. It has poor ratings from every testing service. GM has no idea what to do with the inventory. They are bringing out new models. Hopefully, there is space out in the Mojave next to all the mothballed jets.
What is real? According to the Federal Reserve, household debt climbed at twice the pace of household incomes from the beginning of 2000 through the end of 2003. During this period, new mortgage debt increased about 50% or $2.3 trillion while consumer debt rose by 33% to $2 trillion during this period.
OPEC President Prnomo Yusgiantoro: "High oil prices can cause recession. We are not happy with high oil prices." U.S. crude settled at $41.55 per barrel and gas at the pump exceeds $2 per gallon on average.
Timkin on June 1 will raise prices on high speed steel products by 5%.
Descartes to cut 35% of its workforce or 130 employees.
According to economist Allen Smith, every penny of the $1.5 trillion generated by the 1983 Social Security tax increase is gone. Smith stated "this is the greatest fraud ever perpetuated on the American people."
According to Forrester Research, the number of U.S. business service and software jobs moving offshore will rise to 588,000 in 2004 from 315,000 in 2003. The loss of software programming, customer call-center and even legal paperwork positions should increase 40% in 2005 to 830,000 jobs over the number reached this year. They expect the 1 million mark to be eclipsed in 2006.
In the upcoming Illinois U.S. Senate race, Democrat Obama leads Republic Ryan 48 to 40 in the latest polls. The survey indicates that Obama is gaining more support from Republicans than Ryan is with Democrats. Could this be something to watch for in the November presidential election?
Monday, May 17, 2004
5/17/04 Careful
As an investor, there are times when you can get impacted by an event which appears to come out of the blue. This just took place in India. The economy has been moving along smartly at a brisk pace. One of the mutual funds that invests in India companies was up 117% in the year that ended in Feb. 2004. The rupee has been gaining in value. Outsourcing continues in strong fashion. Foreign investment is gaining traction in India. The election came into focus. The change to Ms. Gandhi has unnerved the investment community. India's Bombay Stock 30 dropped 15% overnight. The rupee got trampled versus the U.S. dollar. It was a very expensive election. Hardly anyone saw the reaction coming. It had been up, up, and away for the economy, profits, stock prices, and the currency. There are times when one cannot be careful enough. There was no place to hide. As I have stated in the past, when they raid the whorehouse, they take all the girls.
The Nikkei is beginning to run into some headwinds. It is still up 50% from the lows; however, there is increasing concern about how a potentially-slowing economy in China could harm Japan's exports. I would be more worried about China having a hard landing rather than simply putting a soft brake pedal to its economy.
I have written many times how China's goods have created deflated pricing in the U.S. China has begun the export of autos and SUVs into our country. Some critics will quickly dismiss them as the next coming of the Jugo. The vehicles are made in brand new high-tech factories. The costs average about $7,000 per vehicle. Do you remember the first VW bug? Most everyone laughed at it. I still see them on the road. If I were GM, I wouldn't laugh too hard. GM might try avoiding recalls rather than laughing.
As an investor, there are times when you can get impacted by an event which appears to come out of the blue. This just took place in India. The economy has been moving along smartly at a brisk pace. One of the mutual funds that invests in India companies was up 117% in the year that ended in Feb. 2004. The rupee has been gaining in value. Outsourcing continues in strong fashion. Foreign investment is gaining traction in India. The election came into focus. The change to Ms. Gandhi has unnerved the investment community. India's Bombay Stock 30 dropped 15% overnight. The rupee got trampled versus the U.S. dollar. It was a very expensive election. Hardly anyone saw the reaction coming. It had been up, up, and away for the economy, profits, stock prices, and the currency. There are times when one cannot be careful enough. There was no place to hide. As I have stated in the past, when they raid the whorehouse, they take all the girls.
The Nikkei is beginning to run into some headwinds. It is still up 50% from the lows; however, there is increasing concern about how a potentially-slowing economy in China could harm Japan's exports. I would be more worried about China having a hard landing rather than simply putting a soft brake pedal to its economy.
I have written many times how China's goods have created deflated pricing in the U.S. China has begun the export of autos and SUVs into our country. Some critics will quickly dismiss them as the next coming of the Jugo. The vehicles are made in brand new high-tech factories. The costs average about $7,000 per vehicle. Do you remember the first VW bug? Most everyone laughed at it. I still see them on the road. If I were GM, I wouldn't laugh too hard. GM might try avoiding recalls rather than laughing.
Saturday, May 15, 2004
5/15/04 Bush, China, BLS, Oracle, And Non-Reality
Bush is at it again. Few are buying the line. In Bridgeton, Missouri he stated “we knew Saddam had terrorist ties. The person responsible for the Berg death, Zarqawi, was in and out of Baghdad prior to our arrival, for example.” In a new Zogby poll, 58% disapproved of Bush’s overall performance; 64% are critical of his handling of the Iraq war; and 54% state that the U.S. is headed in the wrong direction.
China’s inflation rate rose to a 7-year high of 3.8% in April. Grain prices rose 34%. Retail sales increased 13%. China’s government is confident that it can cool GDP growth from the present 9 plus percent to 7 percent. Finance Minister Jin Renquing stated “we are confident that the government has the ability to realize a soft landing of the economy and smooth and sustained growth.” Despite their best efforts, steel investment surged 173% in the first two months of 2004. The Chinese economy is headed for a landing, but there isn’t a seat belt made today that can withstand the shock of a 747 landing on a rice patty. Much of the world’s recent export growth has been due to buying from China. That is true of Japan, the U.S., Germany, and many ASEAN economies.
Oracle lowered its bid for PeopleSoft from $26 to $21. This bid is going nowhere. I have stated this from day one. Our government will not approve it and the EU will not approve it. Oracle’s stock has proven a disappointment from the first announcement of this proposed acquisition. Yesterday, Oracle’s CFO stated “our revised offer reflects changes in market conditions and in PeopleSoft’s market valuation.” Maybe they should be more concerned about Oracle’s market valuation for their own shareholders.
The BLS has seen milk, eggs, butter, and gas jump in price over the past year. With higher inflation and the unemployment situation, there has been added pressure on food pantries. Yesterday, Ronald Guzick, regional economist at the BLS, stated “nobody buys everything in the market basket every month. Some things are going up, but other things are not going up and some things actually go down..” Guzick is a government employee. I am certain his wages and benefits have not actually gone down.
According to the BLS, real average weekly earnings increased by 0.2% from March to April after seasonal adjustment. However, a 0,3% increase in average hourly earnings was partially offset by a 0.2% increase in the CPI for urban wage earners and clerical workers. Average weekly hours were unchanged. Before adjustment for seasonal change and inflation, average weekly earnings were $520.71 in April 2004 compared with $510.02 a year earlier. In other words, for those lucky enough to be employed, it’s pretty damn tough to offset price increases for gas, milk, eggs, and butter. No wonder so many folks on Main Street think they are worse off today than in January 2001.
International Brotherhood of Police Officers voted for Bush in 2000 and yesterday endorsed Kerry. They stated "after three and a half years of disappointing leadership under George Bush, we need to change course in November and elect a President with a real record of supporting police officers and a lifetime of standing with law enforcement.”
The AAA stated on Thursday that gas prices hit another record high in the latest week at an average of $1.95 per gallon.
Japanese firms are eyeing India for its market and low cost of production. Yuzo Kawamori, general manager at Kansai Paint Co., remarked “I think we’ve come to the point where you can’t avoid India’s market. (Kansai is building its fifth pant in India.) Incomes are set to rise and potential buyers of goods could increase… I think there is that kind of growth attraction.” KDDI, Japan’s second largest telecom operator, inaugurated service in India in January. Dentsu, Japan’s largest ad agency, opened a second subsidiary in India in February. Toyota will begin production of car transmissions in India next month for exports to its affiliates around the world.
Kevin Rollins will become CEO of Dell in July. He stated that, in the latest quarter, overseas revenue increased 29% and that the company would continue to focus on sales outside the U.S.
By July 12, Material Sciences Corp. will close its steel coil coating facility in Middletown, Ohio and 87 jobs will be eliminated. The plant has been operating there for 11 years. The company maintains that the plant does not provide an adequate return to shareholders.
Bush is at it again. Few are buying the line. In Bridgeton, Missouri he stated “we knew Saddam had terrorist ties. The person responsible for the Berg death, Zarqawi, was in and out of Baghdad prior to our arrival, for example.” In a new Zogby poll, 58% disapproved of Bush’s overall performance; 64% are critical of his handling of the Iraq war; and 54% state that the U.S. is headed in the wrong direction.
China’s inflation rate rose to a 7-year high of 3.8% in April. Grain prices rose 34%. Retail sales increased 13%. China’s government is confident that it can cool GDP growth from the present 9 plus percent to 7 percent. Finance Minister Jin Renquing stated “we are confident that the government has the ability to realize a soft landing of the economy and smooth and sustained growth.” Despite their best efforts, steel investment surged 173% in the first two months of 2004. The Chinese economy is headed for a landing, but there isn’t a seat belt made today that can withstand the shock of a 747 landing on a rice patty. Much of the world’s recent export growth has been due to buying from China. That is true of Japan, the U.S., Germany, and many ASEAN economies.
Oracle lowered its bid for PeopleSoft from $26 to $21. This bid is going nowhere. I have stated this from day one. Our government will not approve it and the EU will not approve it. Oracle’s stock has proven a disappointment from the first announcement of this proposed acquisition. Yesterday, Oracle’s CFO stated “our revised offer reflects changes in market conditions and in PeopleSoft’s market valuation.” Maybe they should be more concerned about Oracle’s market valuation for their own shareholders.
The BLS has seen milk, eggs, butter, and gas jump in price over the past year. With higher inflation and the unemployment situation, there has been added pressure on food pantries. Yesterday, Ronald Guzick, regional economist at the BLS, stated “nobody buys everything in the market basket every month. Some things are going up, but other things are not going up and some things actually go down..” Guzick is a government employee. I am certain his wages and benefits have not actually gone down.
According to the BLS, real average weekly earnings increased by 0.2% from March to April after seasonal adjustment. However, a 0,3% increase in average hourly earnings was partially offset by a 0.2% increase in the CPI for urban wage earners and clerical workers. Average weekly hours were unchanged. Before adjustment for seasonal change and inflation, average weekly earnings were $520.71 in April 2004 compared with $510.02 a year earlier. In other words, for those lucky enough to be employed, it’s pretty damn tough to offset price increases for gas, milk, eggs, and butter. No wonder so many folks on Main Street think they are worse off today than in January 2001.
International Brotherhood of Police Officers voted for Bush in 2000 and yesterday endorsed Kerry. They stated "after three and a half years of disappointing leadership under George Bush, we need to change course in November and elect a President with a real record of supporting police officers and a lifetime of standing with law enforcement.”
The AAA stated on Thursday that gas prices hit another record high in the latest week at an average of $1.95 per gallon.
Japanese firms are eyeing India for its market and low cost of production. Yuzo Kawamori, general manager at Kansai Paint Co., remarked “I think we’ve come to the point where you can’t avoid India’s market. (Kansai is building its fifth pant in India.) Incomes are set to rise and potential buyers of goods could increase… I think there is that kind of growth attraction.” KDDI, Japan’s second largest telecom operator, inaugurated service in India in January. Dentsu, Japan’s largest ad agency, opened a second subsidiary in India in February. Toyota will begin production of car transmissions in India next month for exports to its affiliates around the world.
Kevin Rollins will become CEO of Dell in July. He stated that, in the latest quarter, overseas revenue increased 29% and that the company would continue to focus on sales outside the U.S.
By July 12, Material Sciences Corp. will close its steel coil coating facility in Middletown, Ohio and 87 jobs will be eliminated. The plant has been operating there for 11 years. The company maintains that the plant does not provide an adequate return to shareholders.
Friday, May 14, 2004
5/14/04 Crisis Or Opportunity?
Commerzbank’s Nick Parsons: “Experience, though, teaches us never to underestimate the markets’ ability to panic.”
In its report on Outsourcing in Financial Services, TowerGroup estimates that the financial services industry’s global IT spending on outsourcing services will grow from $27.8 billion in 2003 to $38.2 billion in 2006, representing a compound annual growth rate of more than 11%. The offshore component of this will grow 28% annually during the same time period.
Jerry Rao, the newly elected chairman of India’s IT industry alliance, NASSCOM, stated “the size of the entire Indian IT industry is less than the Accenture topline, forget the Microsofts.”
The intermediate goods index, part of the PPI, climbed 1.4% in April compared with March’s gain of 0.7%. Excluding food and energy, the rise was 1.1% versus 0.6%. Manufacturers of crude goods received prices that were 3% higher in April versus March’s rise of 0.7%. The crude oil energy portion of the index increased 6.3% in April following a 6.1% decline in March. Natural gas rose 7.9% in April after a 14% drop in March.
As of May 13, according to the Department of Defense, 456 U.S. soldiers and marines had been killed in action in Iraq since Bush declared an end to major combat operations on May 1, 2003. As of May 13, more than 770 U.S. service members have died since the beginning of the Iraq war.
The Rocket is 7-0 with an ERA of 1.99.
The miracle in San Antonio: Derek Fisher’s shot with 0.4 seconds on the clock. The near-miracle in San Antonio: Tim Duncan’s shot with one second remaining in the game. It’s not over until the fat lady sings.
Retail sales were down in April, the first drop in 7 months. The biggest culprit was the slowdown in auto sales. You can expect more where that came from.
Seventy four percent of emergency physicians surveyed stated that their uninsured patients are more likely to die prematurely. With at least 44 million uninsured Americans, why should Congress worry? They have been provided health coverage.
In the latest quarter, WalMart’s international sales rose 22.1% and the operating profit increased a whopping 46.6%. That’s where the action is at WalMart.
China’s consumer prices rose in April at their fastest pace in 7 years. Led by food, the increase was 3.8% compare with March’s rise of 3%. The government’s average inflation target is 3%. According to the People’s Bank of China, consumption accounts for less than 60% of China’s GDP.
China ran a $2.26 billion trade deficit in April. A year ago they had a $1 billion trade surplus. Year to date, China’s imports rose nearly 43% while exports rose 32%. For the first four months of 2004, China has a trade deficit of $10.76 billion compared to a $93 million surplus in the same four months of 2003. The trend is not encouraging.
A Kaiser Family Foundation study released this week estimated that caring for the 44 million uninsured Americans will cost the U.S.$41 billion in 2004.
Richard Myers, chairman of the Joint Chief s of Staff: “There is no way to militarily lose in Iraq. There is also no way to militarily win in Iraq.” Too bad he didn’t provide that advice prior to March 20, 2003.
Commerzbank’s Nick Parsons: “Experience, though, teaches us never to underestimate the markets’ ability to panic.”
In its report on Outsourcing in Financial Services, TowerGroup estimates that the financial services industry’s global IT spending on outsourcing services will grow from $27.8 billion in 2003 to $38.2 billion in 2006, representing a compound annual growth rate of more than 11%. The offshore component of this will grow 28% annually during the same time period.
Jerry Rao, the newly elected chairman of India’s IT industry alliance, NASSCOM, stated “the size of the entire Indian IT industry is less than the Accenture topline, forget the Microsofts.”
The intermediate goods index, part of the PPI, climbed 1.4% in April compared with March’s gain of 0.7%. Excluding food and energy, the rise was 1.1% versus 0.6%. Manufacturers of crude goods received prices that were 3% higher in April versus March’s rise of 0.7%. The crude oil energy portion of the index increased 6.3% in April following a 6.1% decline in March. Natural gas rose 7.9% in April after a 14% drop in March.
As of May 13, according to the Department of Defense, 456 U.S. soldiers and marines had been killed in action in Iraq since Bush declared an end to major combat operations on May 1, 2003. As of May 13, more than 770 U.S. service members have died since the beginning of the Iraq war.
The Rocket is 7-0 with an ERA of 1.99.
The miracle in San Antonio: Derek Fisher’s shot with 0.4 seconds on the clock. The near-miracle in San Antonio: Tim Duncan’s shot with one second remaining in the game. It’s not over until the fat lady sings.
Retail sales were down in April, the first drop in 7 months. The biggest culprit was the slowdown in auto sales. You can expect more where that came from.
Seventy four percent of emergency physicians surveyed stated that their uninsured patients are more likely to die prematurely. With at least 44 million uninsured Americans, why should Congress worry? They have been provided health coverage.
In the latest quarter, WalMart’s international sales rose 22.1% and the operating profit increased a whopping 46.6%. That’s where the action is at WalMart.
China’s consumer prices rose in April at their fastest pace in 7 years. Led by food, the increase was 3.8% compare with March’s rise of 3%. The government’s average inflation target is 3%. According to the People’s Bank of China, consumption accounts for less than 60% of China’s GDP.
China ran a $2.26 billion trade deficit in April. A year ago they had a $1 billion trade surplus. Year to date, China’s imports rose nearly 43% while exports rose 32%. For the first four months of 2004, China has a trade deficit of $10.76 billion compared to a $93 million surplus in the same four months of 2003. The trend is not encouraging.
A Kaiser Family Foundation study released this week estimated that caring for the 44 million uninsured Americans will cost the U.S.$41 billion in 2004.
Richard Myers, chairman of the Joint Chief s of Staff: “There is no way to militarily lose in Iraq. There is also no way to militarily win in Iraq.” Too bad he didn’t provide that advice prior to March 20, 2003.
Thursday, May 13, 2004
5/13/04 Leave Your Worries On The Doorstop
Santomero: “Deflation worries are in the past.”
Sony cuts the price of PlayStation 2 to $149 from $179 in order to compete with Xbox.
The U.S. government posted a federal budget surplus of $17.6 billion in April compared with a $51.1 billion surplus a year ago. The surplus is the smallest for the month of April in 10 years. Outlays rose 12.4% from a year ago while receipts fell 4.8% from a year ago. The Treasury department took a page from CEOs who low-ball quarterly estimates only to come in results that “beat the street.” The Treasury department had primed bond traders with an April surplus of $15 billion. They beat their low-ball figure but it still stunk the house out. You can’t put a good spin on lousy cash flow.
According to Ipsos PharmTrends, the rate of non-fulfillment for prescriptions received from physicians outpaces the growth in prescription drug expenditures or fulfillment by consumers. In 2003, 16 million (14.5%) households in the U.S. did not fill a prescription they received, an increase of 21% above 2002 levels. The number of seniors with insurance to support payments for multiple prescription drugs is still much lower than the average. As Ipsos reported, “drug costs continue to be prohibitive for many Americans, particularly seniors. For many seniors on a fixed or low income, the price of multiple treatments can be unaffordable.”
The U.S. trade deficit widened by 9.1% in March to a record $46 billion, significantly higher than the pre-report estimate of $42.6 billion. The spin is that the rise was due to higher oil import prices and the strong U.S. economy that created a greater appetite for imports. Even though the dollar was weak in March, exports only rose 2.6%. The rise is mainly attributable to exports to the EU, China, and Japan.
The U.S. Energy Department stated that crude oil supplies fell by 1.1 million barrels in the latest reporting period. However, the American Petroleum Institute reported that the supply declined by 2.1 million barrels. Any way you cut it, the supply news was not good for pricing.
In 2003, the total volume of paper checks declined for the 3rd consecutive year, according to the Federal Reserve. On the other hand, the Automatic Clearing House Network operated by the Fed moved $27.4 trillion in 2003. In 2001, there were only 1.23 billion ACH transactions. The number jumped to 10.4 billion in 2003.
The Asian Development Bank expects China’s GDP to grow at an 8.3% rate this year. Japan’s total exports increased by 2.4 trillion yen last year, and 79% of that comprised increased exports to China. A word of caution is in order. Bank credits represented 85% of all funds raised in 2003 in China.
A representative price for a Montblanc pen in the U.S is $235. Just in the town of Wengang in China, there are at least 60 factories turning out carbon-copy counterfeits of Montblanc pens at the equivalent cost to the consumer of $1 to $2. The Chinese have transformed the word wholesale to counterfeit. Maybe you’d like a Harley jacket or a North Face ski jacket or a Ralph Lauren cashmere sweater or a “made in Italy” tie or maybe a Titleist golf ball or a DVD of your favorite movie. Fifty years ago designer dresses were being “copied” and sold at huge discounts. Now the variety of products available has exploded.
Tourism is Pennsylvania’s second-largest industry, and with about 117 million visitors annually, it is the fourth most visited state in the country, tied with New York. The total impact of travelers’ spending on the state’s economy is about $34 billion a year, and tourism is responsible for more than 563,000 jobs. Governor Rendell’s office provided these numbers. One would not think that Pennsylvania would equal New York in the number of tourists. One doesn’t think of this state as a major tourist destination. Compared with New York and Florida and California, Pennsylvania does not receive much buzz in the way of tourism. A little research can unlock some interesting facts. Maybe a bit more research and less rumor following could improve investing results.
Santomero: “Deflation worries are in the past.”
Sony cuts the price of PlayStation 2 to $149 from $179 in order to compete with Xbox.
The U.S. government posted a federal budget surplus of $17.6 billion in April compared with a $51.1 billion surplus a year ago. The surplus is the smallest for the month of April in 10 years. Outlays rose 12.4% from a year ago while receipts fell 4.8% from a year ago. The Treasury department took a page from CEOs who low-ball quarterly estimates only to come in results that “beat the street.” The Treasury department had primed bond traders with an April surplus of $15 billion. They beat their low-ball figure but it still stunk the house out. You can’t put a good spin on lousy cash flow.
According to Ipsos PharmTrends, the rate of non-fulfillment for prescriptions received from physicians outpaces the growth in prescription drug expenditures or fulfillment by consumers. In 2003, 16 million (14.5%) households in the U.S. did not fill a prescription they received, an increase of 21% above 2002 levels. The number of seniors with insurance to support payments for multiple prescription drugs is still much lower than the average. As Ipsos reported, “drug costs continue to be prohibitive for many Americans, particularly seniors. For many seniors on a fixed or low income, the price of multiple treatments can be unaffordable.”
The U.S. trade deficit widened by 9.1% in March to a record $46 billion, significantly higher than the pre-report estimate of $42.6 billion. The spin is that the rise was due to higher oil import prices and the strong U.S. economy that created a greater appetite for imports. Even though the dollar was weak in March, exports only rose 2.6%. The rise is mainly attributable to exports to the EU, China, and Japan.
The U.S. Energy Department stated that crude oil supplies fell by 1.1 million barrels in the latest reporting period. However, the American Petroleum Institute reported that the supply declined by 2.1 million barrels. Any way you cut it, the supply news was not good for pricing.
In 2003, the total volume of paper checks declined for the 3rd consecutive year, according to the Federal Reserve. On the other hand, the Automatic Clearing House Network operated by the Fed moved $27.4 trillion in 2003. In 2001, there were only 1.23 billion ACH transactions. The number jumped to 10.4 billion in 2003.
The Asian Development Bank expects China’s GDP to grow at an 8.3% rate this year. Japan’s total exports increased by 2.4 trillion yen last year, and 79% of that comprised increased exports to China. A word of caution is in order. Bank credits represented 85% of all funds raised in 2003 in China.
A representative price for a Montblanc pen in the U.S is $235. Just in the town of Wengang in China, there are at least 60 factories turning out carbon-copy counterfeits of Montblanc pens at the equivalent cost to the consumer of $1 to $2. The Chinese have transformed the word wholesale to counterfeit. Maybe you’d like a Harley jacket or a North Face ski jacket or a Ralph Lauren cashmere sweater or a “made in Italy” tie or maybe a Titleist golf ball or a DVD of your favorite movie. Fifty years ago designer dresses were being “copied” and sold at huge discounts. Now the variety of products available has exploded.
Tourism is Pennsylvania’s second-largest industry, and with about 117 million visitors annually, it is the fourth most visited state in the country, tied with New York. The total impact of travelers’ spending on the state’s economy is about $34 billion a year, and tourism is responsible for more than 563,000 jobs. Governor Rendell’s office provided these numbers. One would not think that Pennsylvania would equal New York in the number of tourists. One doesn’t think of this state as a major tourist destination. Compared with New York and Florida and California, Pennsylvania does not receive much buzz in the way of tourism. A little research can unlock some interesting facts. Maybe a bit more research and less rumor following could improve investing results.
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