9/24/04 A Closer Look At The LEI
Positive contributions to the Leading Economic Indicators Index in August were: manufacturers’ new orders for consumer goods and materials; real money supply; and average weekly initial claims for unemployment insurance (inverted). The negative factors were: the interest rate spread; building permits; index of consumer expectations; manufacturers’ new orders for non-defense capital goods; vendor performance; and stock prices. During the six months through August, the leading index increased 0.7%, hardly a sign of much economic strength.
Ken Goldstein, chief economist for the Conference Board: “The leading indicators continue to suffer. There is concern about weak consumption and the pace of wage and salary increases. Consumers worry about their wages and salaries, which could limit spending. Businesses worry about their ability to raise prices and cover rising costs.” This message sounds quite different from that provided by the Fed.
P.J. O’Rourke: “The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work and then they get elected and prove it.”
According to the IRS, total corporate income tax receipts declined to $128.8 billion in 2003, down 13.4% from 2001’s $148.7 billion. During the interim two years, pre-tax corporate income rose sharply as did the federal government deficit.
Joseph Binkman, Stanford law professor and an expert on business taxes, stated “given our current huge deficit, we’re replacing taxes with debt. When the debt comes due, today’s tax cuts are a tax on our children.”
P.J. O’Rourke: When government does, occasionally, work, it works in an elitist fashion. That is, government is most easily manipulated by people who have money and power already. That is why government benefits usually go to people who don’t need benefits from government. Government may make some environmental improvements, but these will be improvements for rich bird-watchers. And no one in government will remember that when poor people go bird watching they do it at Kentucky Fried Chicken.’
GM stated they are way behind on their plan to break-even in Europe as pricing there has been more challenging than anticipated and structural costs are too high. GM expects to spend $5.1 billion on healthcare this year, and that is equal to its budget for capital expenditures.
December gold closed at $412.60.
Last week 600,000 barrels of oil were added to the Strategic Oil Reserve. That did not get any publicity. I wonder why. That same 600,000 barrels would have curtailed the loan request from refiners. That loan request, and complying with it, got plenty of publicity. I wonder why. In sum, our giving federal government will lend oil to a few refiners and the amount will equate to that purchased last week.
The Cingular Wireless purchase of AT&T Wireless will close shortly. The latter has 31,000 employees. With the acquisition, there will be many departmental duplications, such as, HR, sales, and marketing. Thousands of employees will lose their jobs. TRW Automotive ceased production yesterday at its Pitt, NC plant near Greenville. They laid off 105 people. Since 2003, more than 2,000 manufacturing jobs have been eliminated in Pitt and several surrounding counties.
Thursday, September 23, 2004
9/23/04 What Matters?
It depends on who is doing the talking. There are some who truly believe that unemployment has no bearing on stock prices. Some believe these record oil prices do not influence and/or impact consumer spending. Ther are money managers who follow the belief that one should be fully invested at all times because the market has risen 9% a year over time. When it comes to the economy, many economists believe it is output or production that is the final arbiter of business cycles. Interestingly, all of these examples reside in macro economics, and the latter matters to me in my investment decisions.
Pimco's Paul McCulley: Re the November election, "a Democratic win would be unambiguously bullish for bonds versus stocks because there would be deficit hawks (calling for) increasing taxes forthe affluent."
The ABC News/Money magazine consumer comfort index dropped to -9 in the week ended Sept. 19, down from -7 in the previous week.
Lucent is planning additional cuts in retiree health-care benefits.
Yesterday, October heating oil traded at an all-time high of $1.34 a gallon. With crude inventories falling 9.1 million barrels and gasoline inventories declining by 3.3 million barrels, it was not surprising to see crude oil jump to $48.35 a gallon. This is about $1 below the clsoing all-time high for crude oil.
The death toll and the list of wounded U.S. service members continue to escalate in Iraq. The number of daily attacks is on the rise. Does this matter to voters? Does it matter that the war on terror and the war of choice in Iraq are not one and the same? Does it matter we invaded Iraq over the supposed existence of WMD and then changed the reason to rid the world of Saddam Hussein? Doe sit matter that the costs for Medicare were deliberately under-estimated to Congress?
Do you want to lsiten to the message being delivered by the U.S. Treasury market or by the Federal Reserve? How is it possible that the Fed is all-knowing that the "natural rate" for short-term interest rates should be about 2.5% while 10-year Treasury bonds traded yesterday at 3.97%? How can the economy be gaining traction while the yield curve dramatically flattens? We are approaching a differential of 150 basis points between 2-year and 10-year U.S. Treasury bonds.
It might be wise to keep an eye on the UK housing market. I is cooling down. Ther are signs that the housing market is slowing in the U.S. It is not to be found in new housing starts; however,the drop in housing permits will translate into declining construction. There is another sign. When placing a property on the market, one needs to hire a building construction inspector, one who can describe what structural deficiencies might exist and need to be fixed. Over the past couple of years there has been a wait to hire such an individual. Now, in most cases, there isn't a wait. That matters. It's a sure sign of slowing. Home construction has been the most consistent growth engine for our economy during the Bush term in office. It may play a much more diminished role over the next four years. That spells trouble, on the one hand, for employment in the construction trades and for cash flow emanating from rising home prices and home equity lines of credit. On the other hand, it may also mean lower inflation with less demand for lumber and other building materials.
Today we will be reading about the weekly first-time initial jobless claims and the monthly leading economic indicators for August. I anticipate both will reflect a slowing economy, an economy with a rapidly flattening yield curve. Rapidily it is, and this matters. That is very bad news for common stocks, and is one reason why rallies in the Dow, S&P 500, and the Nasdaq are short-lived.
Nintendo DS will debut in North American stores on November 21. It will sell for $149.99.
About 90% of Japan's imported beef presently arrive from Australia.
According to Mic Dinsmore, chief executive of the Port of Seattle, the U.S. has 361 river ports and seaports, and every day 21,000 containers enter our country but at present only 4 to 6% of these containers' contents are verified.
Due to technical problems, the following is a continuation from the above sections written about 8 hours ago.
The WSJ stated "the economy is an electoral curveball...Bush may benefit from recent bright signs, but job and income issues could help Kerry." Consider these bright signs: initial jobless claims for the week ended Sept. 18 rose by 14,000 to 350,000, higher than the prior 4-week moving average; the August Leading Economic Indicators fell 0.3%, the third consecutive monthly decline. I would anticipate another decline in September; with rising incentives needed to move bloated inventories, GM's profit per vehicle sold in the U.S. in 2004 could drop to $150 from the $180 recorded in 2003, the same year Toyota earned $1,700 on each vehicle they sold in the U.S.; and over the past 12 months, consumer prices rose 2.7% while average hourly wages for production workers were up 2.3%
There is speculation that Agere Systems will cut 205 of their employees and Commerce One will file for bankruptcy protection.
Thank goodness for Homeland Security. We're safe from Cat Stevens!
It depends on who is doing the talking. There are some who truly believe that unemployment has no bearing on stock prices. Some believe these record oil prices do not influence and/or impact consumer spending. Ther are money managers who follow the belief that one should be fully invested at all times because the market has risen 9% a year over time. When it comes to the economy, many economists believe it is output or production that is the final arbiter of business cycles. Interestingly, all of these examples reside in macro economics, and the latter matters to me in my investment decisions.
Pimco's Paul McCulley: Re the November election, "a Democratic win would be unambiguously bullish for bonds versus stocks because there would be deficit hawks (calling for) increasing taxes forthe affluent."
The ABC News/Money magazine consumer comfort index dropped to -9 in the week ended Sept. 19, down from -7 in the previous week.
Lucent is planning additional cuts in retiree health-care benefits.
Yesterday, October heating oil traded at an all-time high of $1.34 a gallon. With crude inventories falling 9.1 million barrels and gasoline inventories declining by 3.3 million barrels, it was not surprising to see crude oil jump to $48.35 a gallon. This is about $1 below the clsoing all-time high for crude oil.
The death toll and the list of wounded U.S. service members continue to escalate in Iraq. The number of daily attacks is on the rise. Does this matter to voters? Does it matter that the war on terror and the war of choice in Iraq are not one and the same? Does it matter we invaded Iraq over the supposed existence of WMD and then changed the reason to rid the world of Saddam Hussein? Doe sit matter that the costs for Medicare were deliberately under-estimated to Congress?
Do you want to lsiten to the message being delivered by the U.S. Treasury market or by the Federal Reserve? How is it possible that the Fed is all-knowing that the "natural rate" for short-term interest rates should be about 2.5% while 10-year Treasury bonds traded yesterday at 3.97%? How can the economy be gaining traction while the yield curve dramatically flattens? We are approaching a differential of 150 basis points between 2-year and 10-year U.S. Treasury bonds.
It might be wise to keep an eye on the UK housing market. I is cooling down. Ther are signs that the housing market is slowing in the U.S. It is not to be found in new housing starts; however,the drop in housing permits will translate into declining construction. There is another sign. When placing a property on the market, one needs to hire a building construction inspector, one who can describe what structural deficiencies might exist and need to be fixed. Over the past couple of years there has been a wait to hire such an individual. Now, in most cases, there isn't a wait. That matters. It's a sure sign of slowing. Home construction has been the most consistent growth engine for our economy during the Bush term in office. It may play a much more diminished role over the next four years. That spells trouble, on the one hand, for employment in the construction trades and for cash flow emanating from rising home prices and home equity lines of credit. On the other hand, it may also mean lower inflation with less demand for lumber and other building materials.
Today we will be reading about the weekly first-time initial jobless claims and the monthly leading economic indicators for August. I anticipate both will reflect a slowing economy, an economy with a rapidly flattening yield curve. Rapidily it is, and this matters. That is very bad news for common stocks, and is one reason why rallies in the Dow, S&P 500, and the Nasdaq are short-lived.
Nintendo DS will debut in North American stores on November 21. It will sell for $149.99.
About 90% of Japan's imported beef presently arrive from Australia.
According to Mic Dinsmore, chief executive of the Port of Seattle, the U.S. has 361 river ports and seaports, and every day 21,000 containers enter our country but at present only 4 to 6% of these containers' contents are verified.
Due to technical problems, the following is a continuation from the above sections written about 8 hours ago.
The WSJ stated "the economy is an electoral curveball...Bush may benefit from recent bright signs, but job and income issues could help Kerry." Consider these bright signs: initial jobless claims for the week ended Sept. 18 rose by 14,000 to 350,000, higher than the prior 4-week moving average; the August Leading Economic Indicators fell 0.3%, the third consecutive monthly decline. I would anticipate another decline in September; with rising incentives needed to move bloated inventories, GM's profit per vehicle sold in the U.S. in 2004 could drop to $150 from the $180 recorded in 2003, the same year Toyota earned $1,700 on each vehicle they sold in the U.S.; and over the past 12 months, consumer prices rose 2.7% while average hourly wages for production workers were up 2.3%
There is speculation that Agere Systems will cut 205 of their employees and Commerce One will file for bankruptcy protection.
Thank goodness for Homeland Security. We're safe from Cat Stevens!
Wednesday, September 22, 2004
9/22/04 2004: The Year Of The Disconnect
Yesterday was an important day in the bond market. All eyes were on the Fed as their members voted unanimously to raise its target for the federal funds rate by 25 basis points to 1 ¾ percent, and the discount rate by 25 basis points to 2 ¾ percent. Prior to the meeting, 10-year Treasury bonds were trading at 4.08%. By the close of trading, the yield had dropped to 4.04%, and that was just above the day’s low at 4.03%. Significantly, the yield curve flattened to the narrowest point since September 2001. The spread between 2-year and 10-year Treasury bonds was 157 basis points. In sum, despite the Fed stating output regained some traction and that the labor market improved modestly, the long Treasury market ignored the Fed’s description of the economic conditions in our country. There is a disconnect between 10-year Treasury yields and the Fed raising short-term rates. Moreover, the flattening of the yield curve describes a viewpoint that the economy is slowing dramatically. Some traders mentioned that the rally in 10-year Treasury bonds reflected a fear of convexity where mortgage players buy 10-year Treasury bonds to enhance their income and duration shortfalls due to rising prepayment risks. Convexity measures the way duration and price change when interest rates change. That may have played a part in the buying of 10-year Treasury bonds yesterday, but let’s keep it real. The yield on the 10-year has recently dropped from 4.88% to 4.04%. Something a lot big than convexity fears is going on to generate such a decline. It’s called the economy grinding to a halt. It’s called the tapped out consumer. It’s called borrowing about $2 billion per day from foreign sources pushing our country into possible financial ruin.
Yesterday, crude oil closed at $47.10 per barrel, October heating oil at $1.30 per gallon, and October natural gas at $5.60 per BTU.
RF Micro Devices warned that their sales forecast would fall short of expectations due to an inventory glut in Asian electronics. They had lower than anticipated sales to certain Mobile phone customers. Meanwhile, Samsung, the world’s second largest chipmaker, stated that memory chip prices will fall sharply.
Interstate Bakeries filed for chapter 11 bankruptcy. GM will cut 3,000 jobs in Europe. Continental Tire North America has decided to close its Mayfield, KY tire plant that employs 827 people. Continental stated the plant is its most expensive factory to operate in North America. Plexus is cutting 160 jobs.
While U.S. housing starts rose 0.6% in August to a 2 million annual rate, building permits fell 5.5% to 1.952 million units.
Ralph Waldo Emerson: "It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay."
Norway is a large oil producer. Norwegian bonds are backed by large oil reserves.
P.J. O’Rourke: "You’re into derivatives whether you like it or not. Your adjustable rate mortgage is a derivative. You got a deal on a loan that was cheaper at any time than a fixed-rate mortgage. In return you’re taking a risk. Your risk is that the amount of interest you’ll pay in the future will be decided from a formula involving the prime rate, T-bills, and the chairman of Chase Manhattan’s boxer shorts waistband size. In this case, the underlying commodity is banker fat."
The British ambassador to Rome stated Bush is "al-Qaeda’s best recruiting sergeant…If anyone is ready to celebrate the eventual re-election of Bush, it’s al-Qaeda."
GM is planning a clearance sale next week on 2004 models, offering zero-percent financing for 72 months to help unload a backlog of inventory. GM spent an average of $4,379 per vehicle on incentives, the most of any major automaker, and still inventories rose in August. Bob Schnorbus, chief economist for J.D. Power and Associates, stated "for whatever reason, consumers right now just aren’t in a buying mood."
A recent study by Research and Markets indicated that the worldwide analgesic market was worth $38 billion last year and is expected to nearly double to $75 billion by the year 2010.
Jim Cramer provided the joke of the day. He stated "the simple truth about this economy is that while nothing’s ever perfect, we’ve got a bit of a barn-burner on our hands." Funny stuff.
Yesterday was an important day in the bond market. All eyes were on the Fed as their members voted unanimously to raise its target for the federal funds rate by 25 basis points to 1 ¾ percent, and the discount rate by 25 basis points to 2 ¾ percent. Prior to the meeting, 10-year Treasury bonds were trading at 4.08%. By the close of trading, the yield had dropped to 4.04%, and that was just above the day’s low at 4.03%. Significantly, the yield curve flattened to the narrowest point since September 2001. The spread between 2-year and 10-year Treasury bonds was 157 basis points. In sum, despite the Fed stating output regained some traction and that the labor market improved modestly, the long Treasury market ignored the Fed’s description of the economic conditions in our country. There is a disconnect between 10-year Treasury yields and the Fed raising short-term rates. Moreover, the flattening of the yield curve describes a viewpoint that the economy is slowing dramatically. Some traders mentioned that the rally in 10-year Treasury bonds reflected a fear of convexity where mortgage players buy 10-year Treasury bonds to enhance their income and duration shortfalls due to rising prepayment risks. Convexity measures the way duration and price change when interest rates change. That may have played a part in the buying of 10-year Treasury bonds yesterday, but let’s keep it real. The yield on the 10-year has recently dropped from 4.88% to 4.04%. Something a lot big than convexity fears is going on to generate such a decline. It’s called the economy grinding to a halt. It’s called the tapped out consumer. It’s called borrowing about $2 billion per day from foreign sources pushing our country into possible financial ruin.
Yesterday, crude oil closed at $47.10 per barrel, October heating oil at $1.30 per gallon, and October natural gas at $5.60 per BTU.
RF Micro Devices warned that their sales forecast would fall short of expectations due to an inventory glut in Asian electronics. They had lower than anticipated sales to certain Mobile phone customers. Meanwhile, Samsung, the world’s second largest chipmaker, stated that memory chip prices will fall sharply.
Interstate Bakeries filed for chapter 11 bankruptcy. GM will cut 3,000 jobs in Europe. Continental Tire North America has decided to close its Mayfield, KY tire plant that employs 827 people. Continental stated the plant is its most expensive factory to operate in North America. Plexus is cutting 160 jobs.
While U.S. housing starts rose 0.6% in August to a 2 million annual rate, building permits fell 5.5% to 1.952 million units.
Ralph Waldo Emerson: "It is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay."
Norway is a large oil producer. Norwegian bonds are backed by large oil reserves.
P.J. O’Rourke: "You’re into derivatives whether you like it or not. Your adjustable rate mortgage is a derivative. You got a deal on a loan that was cheaper at any time than a fixed-rate mortgage. In return you’re taking a risk. Your risk is that the amount of interest you’ll pay in the future will be decided from a formula involving the prime rate, T-bills, and the chairman of Chase Manhattan’s boxer shorts waistband size. In this case, the underlying commodity is banker fat."
The British ambassador to Rome stated Bush is "al-Qaeda’s best recruiting sergeant…If anyone is ready to celebrate the eventual re-election of Bush, it’s al-Qaeda."
GM is planning a clearance sale next week on 2004 models, offering zero-percent financing for 72 months to help unload a backlog of inventory. GM spent an average of $4,379 per vehicle on incentives, the most of any major automaker, and still inventories rose in August. Bob Schnorbus, chief economist for J.D. Power and Associates, stated "for whatever reason, consumers right now just aren’t in a buying mood."
A recent study by Research and Markets indicated that the worldwide analgesic market was worth $38 billion last year and is expected to nearly double to $75 billion by the year 2010.
Jim Cramer provided the joke of the day. He stated "the simple truth about this economy is that while nothing’s ever perfect, we’ve got a bit of a barn-burner on our hands." Funny stuff.
Tuesday, September 21, 2004
9/21/04 Consumer Fatigue Is Gaining Traction
Pennsylvania Labor & Industry Secretary Stephen M. Schmerin stated "the jump in Pennsylvania’s unemployment rate from 5.3% in July to 5.6% in August indicates the state’s economy, like the rest of the nation’s, remains volatile for workers and businesses. The manufacturing sector aloe lost another 1,200 jobs in August, on top of 1,300 jobs lost in July…Regretfully, other companies, such as Wyeth Pharmaceuticals in Chester County, have already announced job cuts for later this year. Pennsylvania manufacturing jobs are now down 152,000 from March 2001, putting our manufacturing job count at a record low of 693,400. Overall, the Pennsylvania economy generated only 6,400 jobs last month, an increase of 0.1% that mirrored the national sluggish job growth rate."
Employment in low-wage industries, such as call centers and restaurants, is growing faster than in high-wage industries, such as manufacturing and commercial construction, according to an Oregon Employment Department analysis yet to be officially released. Low-wage industries also shrunk less than high-wage industries during the state’s recession from November 2000 to June 2003. Services supporting businesses, largely call centers, rank as the fastest-growing sector of Oregon’s economy, expanding by 66% since January 2001- three times faster than any other industry. In August, Oregon’s unemployment rate spiked six-tenths of a percentage point to 7.4%. For months, median household income has declined faster in Oregon than in the rest of the country, according to federal statistics.
Paul Samuelson: "Risk of inflation is not acute right now."
Yesterday, two U.S. soldiers were killed in a firefight with insurgents in Kabul. According to the Defense Department, 137 U.S. military personnel have died in Operation Enduring Freedom, launched after 9/11.
Douglas Henry, CEO of Henry Molded Products: "The fact that you have no margins brings to a screeching halt the reinvestment in growth and investment capability."
Eastman Kodak will close its only manufacturing and wholesale processing lab in Australia and cut 600 workers. Peoples Energy will cut 110 jobs. Dex Media will eliminate 160 jobs or 6% of its workforce. Overhead Storage to lay off 140 workers, or one-third of its employees.
Kathleen Bostjancic, economist: The consumer is really starting to show some fatigue here. Our big picture analysis is that the economic soft patch is turning out to be more than just a patch and that the economy is more vulnerable than the Fed had perceived."
Greenspan: "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased in recent months."
The core PCE price index rose 1.5% for the 12 months ending in July.
Superior Industries, a maker of aluminum auto parts, warned its third-quarter earnings would fall short of expectations because weak sales of cars and light trucks over the summer led to production cuts from major customers.
Bosch and Volkswagen stated that wage cuts may crimp consumer spending.
Georgia reported 1,649 foreclosures in August. Georgia’s total number of foreclosures is the second largest in the nation with 5,542 foreclosed residential properties. Texas, with a reported 8,364, has the most.
As of July 31, 2004, Cisco’s order backlog was $1.9 billion compared with $2 billion one year earlier.
KB Home raised its forecast for 2004 to $11 per share and to $14 per share for 2005.
For the first time in almost ten years, Colgate-Palmoive issued a formal profit warning, and stated that earnings would fall short of forecasts due to higher marketing and promotion expenses. Reuben Mark, chairman and chief executive, stated the company has "sharply increased marketing spending to build market share and aggressively improve our brand franchises here and abroad." Even so, gross profit margins for the full year 2004 would be "even with or slightly better than the record 55% set in 2003," noted Mark. The stock declined about 11% on this news. Over the years, I have often stated that, if given a choice for a chief executive to run a company, mine would be Reuben Mark.
Same-store sales at U.S. retail chains declined 1.1% in the week ended September 18 compared to the prior week, and the latter was not exactly a barn burner.
Pennsylvania Labor & Industry Secretary Stephen M. Schmerin stated "the jump in Pennsylvania’s unemployment rate from 5.3% in July to 5.6% in August indicates the state’s economy, like the rest of the nation’s, remains volatile for workers and businesses. The manufacturing sector aloe lost another 1,200 jobs in August, on top of 1,300 jobs lost in July…Regretfully, other companies, such as Wyeth Pharmaceuticals in Chester County, have already announced job cuts for later this year. Pennsylvania manufacturing jobs are now down 152,000 from March 2001, putting our manufacturing job count at a record low of 693,400. Overall, the Pennsylvania economy generated only 6,400 jobs last month, an increase of 0.1% that mirrored the national sluggish job growth rate."
Employment in low-wage industries, such as call centers and restaurants, is growing faster than in high-wage industries, such as manufacturing and commercial construction, according to an Oregon Employment Department analysis yet to be officially released. Low-wage industries also shrunk less than high-wage industries during the state’s recession from November 2000 to June 2003. Services supporting businesses, largely call centers, rank as the fastest-growing sector of Oregon’s economy, expanding by 66% since January 2001- three times faster than any other industry. In August, Oregon’s unemployment rate spiked six-tenths of a percentage point to 7.4%. For months, median household income has declined faster in Oregon than in the rest of the country, according to federal statistics.
Paul Samuelson: "Risk of inflation is not acute right now."
Yesterday, two U.S. soldiers were killed in a firefight with insurgents in Kabul. According to the Defense Department, 137 U.S. military personnel have died in Operation Enduring Freedom, launched after 9/11.
Douglas Henry, CEO of Henry Molded Products: "The fact that you have no margins brings to a screeching halt the reinvestment in growth and investment capability."
Eastman Kodak will close its only manufacturing and wholesale processing lab in Australia and cut 600 workers. Peoples Energy will cut 110 jobs. Dex Media will eliminate 160 jobs or 6% of its workforce. Overhead Storage to lay off 140 workers, or one-third of its employees.
Kathleen Bostjancic, economist: The consumer is really starting to show some fatigue here. Our big picture analysis is that the economic soft patch is turning out to be more than just a patch and that the economy is more vulnerable than the Fed had perceived."
Greenspan: "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased in recent months."
The core PCE price index rose 1.5% for the 12 months ending in July.
Superior Industries, a maker of aluminum auto parts, warned its third-quarter earnings would fall short of expectations because weak sales of cars and light trucks over the summer led to production cuts from major customers.
Bosch and Volkswagen stated that wage cuts may crimp consumer spending.
Georgia reported 1,649 foreclosures in August. Georgia’s total number of foreclosures is the second largest in the nation with 5,542 foreclosed residential properties. Texas, with a reported 8,364, has the most.
As of July 31, 2004, Cisco’s order backlog was $1.9 billion compared with $2 billion one year earlier.
KB Home raised its forecast for 2004 to $11 per share and to $14 per share for 2005.
For the first time in almost ten years, Colgate-Palmoive issued a formal profit warning, and stated that earnings would fall short of forecasts due to higher marketing and promotion expenses. Reuben Mark, chairman and chief executive, stated the company has "sharply increased marketing spending to build market share and aggressively improve our brand franchises here and abroad." Even so, gross profit margins for the full year 2004 would be "even with or slightly better than the record 55% set in 2003," noted Mark. The stock declined about 11% on this news. Over the years, I have often stated that, if given a choice for a chief executive to run a company, mine would be Reuben Mark.
Same-store sales at U.S. retail chains declined 1.1% in the week ended September 18 compared to the prior week, and the latter was not exactly a barn burner.
Monday, September 20, 2004
9/20/04 Crosses To Bear
Bellevue, Washington is a suburb on the Eastside of Seattle. It has many parks, and the community is one of the most affluent in the United States. Bill Gates, for example, lives in the Medina area of Bellevue. Yesterday, the Veterans for Peace planted 1,028 crosses on the lawn at the main city of Bellevue park. Each cross displayed the name, the age, the rank, and hometown of the U.S. soldier killed in Iraq during the past one and a half years, the period marking the war of choice. If a park in every town in the U.S. showcased these crosses, then the outcry about the Iraq war would be deafening. That’s the least we can do for these soldiers, and for their families left behind.
Sen. Chuck Hagel is a Vietnam War veteran and co-chairman of Bush’s re-election committee in Nebraska. He stated "the fact is we’re in trouble. We need more help from our allies. We need the Iraqi people to come around in a more supportive way. The fact is a crisp, sharp analysis of our policies is required. We didn’t do that in Vietnam, and we saw 11 years of casualties mount to the point where we finally lost."
Sen. Richard Lugar, also a Republican, mentioned that Congress had appropriated one year ago $18.4 for reconstruction, and that no more than $1 billion had been spent. He opined "this is the incompetence in the administration."
Yukos will halt deliveries to China’s biggest oil company. China is the world’s fastest growing energy market. On this news, crude rose this morning to $46.35 per barrel.
Ford will reduce production of six vehicles to trim inventories. We should be hearing from GM shortly.
Samsung stated the company sees a slowdown in the chip market. I wonder whether the Nasdaq will ignore this piece of information. There appears to be a growing complacency surrounding bad news. Everything is one big yawn. We’ll see who is left standing. It’s never smart to move up to the next weight class unless you have the skills to do it. Few do.
There is quite a battle developing on how much Medicare will cost. Bush promised his proposed benefits would cost no more than $400 billion over 10 years. The sentence was hardly finished when information was released contradicting the figure by at least $176 billion. Since it’s not Bush’s personal funds, he probably was a bit frivolous with projections. A CFO would have been fired on the spot. The fact is the costs of Medicare will jump significantly in 2006 and after 2006. As Robert Hayes, president of the Medicare Rights Center noted, "we’re in deep trouble." He is quite correct. Consumers are facing a debacle, and that is not an exaggeration. The aging of the population will create additional healthcare demands and costs that could easily decimate the cash flow of our seasoned citizens.
Bellevue, Washington is a suburb on the Eastside of Seattle. It has many parks, and the community is one of the most affluent in the United States. Bill Gates, for example, lives in the Medina area of Bellevue. Yesterday, the Veterans for Peace planted 1,028 crosses on the lawn at the main city of Bellevue park. Each cross displayed the name, the age, the rank, and hometown of the U.S. soldier killed in Iraq during the past one and a half years, the period marking the war of choice. If a park in every town in the U.S. showcased these crosses, then the outcry about the Iraq war would be deafening. That’s the least we can do for these soldiers, and for their families left behind.
Sen. Chuck Hagel is a Vietnam War veteran and co-chairman of Bush’s re-election committee in Nebraska. He stated "the fact is we’re in trouble. We need more help from our allies. We need the Iraqi people to come around in a more supportive way. The fact is a crisp, sharp analysis of our policies is required. We didn’t do that in Vietnam, and we saw 11 years of casualties mount to the point where we finally lost."
Sen. Richard Lugar, also a Republican, mentioned that Congress had appropriated one year ago $18.4 for reconstruction, and that no more than $1 billion had been spent. He opined "this is the incompetence in the administration."
Yukos will halt deliveries to China’s biggest oil company. China is the world’s fastest growing energy market. On this news, crude rose this morning to $46.35 per barrel.
Ford will reduce production of six vehicles to trim inventories. We should be hearing from GM shortly.
Samsung stated the company sees a slowdown in the chip market. I wonder whether the Nasdaq will ignore this piece of information. There appears to be a growing complacency surrounding bad news. Everything is one big yawn. We’ll see who is left standing. It’s never smart to move up to the next weight class unless you have the skills to do it. Few do.
There is quite a battle developing on how much Medicare will cost. Bush promised his proposed benefits would cost no more than $400 billion over 10 years. The sentence was hardly finished when information was released contradicting the figure by at least $176 billion. Since it’s not Bush’s personal funds, he probably was a bit frivolous with projections. A CFO would have been fired on the spot. The fact is the costs of Medicare will jump significantly in 2006 and after 2006. As Robert Hayes, president of the Medicare Rights Center noted, "we’re in deep trouble." He is quite correct. Consumers are facing a debacle, and that is not an exaggeration. The aging of the population will create additional healthcare demands and costs that could easily decimate the cash flow of our seasoned citizens.
Saturday, September 18, 2004
9/18/04 The Soft Patch Continues
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
Barry Bonds hit home run number 700. Ichiro hit his 199th single of this season, breaking Lloyd Waner's 1927 mark of 198. Ichiron has 235 hits, 22 shy of George Sisler's 1920 mark of 257.
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
Barry Bonds hit home run number 700. Ichiro hit his 199th single of this season, breaking Lloyd Waner's 1927 mark of 198. Ichiron has 235 hits, 22 shy of George Sisler's 1920 mark of 257.
9/18/04 The Soft Patch Continues
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look fo����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look fo����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
9/18/04 The Soft Patch Continues
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
9/18/04 The Soft Patch Continues
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
9/18/04 The Soft Patch Continues
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
A weekly gauge of future U.S. economic activity fell 0.2% last week, the fourth decline in a row and the sixth week without any growth. Lakshman Achuthan, director of the Economic Cycle Research Institute, stated the ECRI weekly leading index is signaling "lackluster" growth through 2004 and into 2005. He opined that growth will not be strong enough to create many jobs.
Companies are trying new cost-cutting measures. Bon Macy’s, which is cutting Bon from its name, is also cutting weekly hours for many workers, and many of them have been with the company for over 10 years. Hours are being reduced to 25 hours or less per week. This reduction will cause a goodly percentage to look for a second job. Macy’s saves money on the reduced hours and they also save on reduced benefits. These workers are still employed but no longer full-time employees. Then there is Delta Airlines that cut 7,000 from its medical plan. I will no longer shop at Macy’s and will discontinue flying on Delta.
The Semiconductor Equipment and Materials Int’l trade group reported that August bookings were 5% below the revised July 2004 level and that billings were 1% below the revised July 2004 level. The research director for SEMI stated that "a number of recent company announcements suggest these levels may continue to soften in the coming months." That softening can only hinder the Nasdaq’s ability to move higher from present levels.
Over the last several months many readers have inquired as to where I get my information on plant closures and layoffs. I subscribe to a daily service and am provided emails throughout the day. They include company announcements and, whenever possible, local newspaper articles from the community that has been impacted.
As of September 15, 2,743 South Floridians have applied for disaster unemployment help due to lost work related to the hurricanes. That number is expected to rise. First Indiana Bank is cutting 30 jobs in a cost-control measure. Nexans Magnet Wire is closing its magnet-wire plant in La Grange, Ky. And 123 workers will lose their jobs.
According to the Cremation Association of North America, today roughly 25% of all deaths in the U.S. are followed by cremation, and the Association estimates that percentage will rise to 40% by 2010. It could prove the death knell for casket makers. Hillenbrand Industries of Batesville, Ind. is one of this nation’s largest casket makers. The company is laying off 100 workers in the U.S. and 130 in Europe, and lowered their 2004 earnings outlook. Hillenbrand stated casket sales fell because of the lower death rate and increased cremations. They also mentioned increased material costs, such as, steel and hardwood.
Mark Twain: "Don’t tell my mother I’m in politics. She thinks I play the piano in a whorehouse."
William Gibson, science fiction writer: "The future’s already here. It just isn’t evenly distributed."
The most recent Harris poll shows Bush’s ratings slipped to the lowest level of his Presidency. It indicates a reading of 45% positive and 54% negative. Cheney’s are 40% positive and 54% negative.
U.S. light crude oil gained $1.77 to $45.65 a barrel. I wonder whether the same analysts who proclaimed that unemployment and layoffs don’t impact the market also believe that high oil prices don’t matter either. Wal-Mart would take issue with the views of those analysts. The company is on the front lines with the consumer each and every day.
Friday, September 17, 2004
9/17/04 Bad News Bears
The news can and will get worse. A total of 1,020 U.S. service members have been killed in Iraq. The report by Charles Duelfer, chief U.S. weapons inspector, will show that, after a year and a half in Iraq, no WMD have been found. U.N. Secretary-General Kofi Annan stated the U.S. invasion of Iraq was illegal because it violated the U.N. charter. The U.S. is part of the 15-member Security Council and Annan said that Council should have approved the invasion. After the election, more troops will be sent to Iraq. This is Bush’s Vietnam.
The news on the business front will get worse. An example is the Philadelphia Fed Manufacturing Index that fell in September to 13.4 from 28.5 in August. The future general activity index fell to 44.9 from 52.7. Meanwhile, our country’s debt continues to grow. U.S. second quarter non-financial debt grew at a 7.7% annual rate, close to triple the rate of growth of our GDP. U.S. second quarter debt grew at a 9.5% annual rate. The Federal debt increased at a 10.7% rate, down slightly from the 12% rate in the first quarter. There is no legitimate excuse for the Federal debt to rise at this rate. At the same time, according to the BLS, adjusted for the 0.1% increase in the CPI, real average weekly earnings increased by 0.2% from July to August. Average weekly hours were unchanged. The core CPI (excl. food and energy) is up 1.8% from one year ago, below the average of 2.3% over the past 10 years. The Fed, however, wants to raise interest rates again. If they raise the Fed Funds to 1.75 percent that will roughly equate to the core CPI rate of increase for the past 12 months. With GDP growth slowing, there is no reason to raise rates any more than that. If you doubt that growth is slowing, just look at the yield on 10 year treasury notes at 4.07%, the same level seen in February 2004.
If business were buoyant, there would not be as many plant closures and mass layoffs. United Airlines has about 62,000 employees, down from more than 100,000 three years ago. The CEO mentioned that additional significant job cuts can be expected, and there is speculation of changes in their Denver hub. The Maytag Galesburg, Ill. Plant closed its doors this week, and 900 jobs were lost- to Mexico. Maytag stated they would also layoff up to 170 workers at its washer and dryer plant in Newton, Iowa this month. The layoffs are due to lower demand for certain products at the Newton plant.
Jobless claims rose 16,000 in the week ending Sept. 16.
Nortel, North America’s largest maker of telecom equipment, stated that it expects to report lower third quarter revenues compared to the second quarter.
In June, international investors purchased a net $40.6 billion in U.S. gov’t debt. In July, that figure declined to $22.4 billion.
According to the CFSB Tremont hedge fund index, the average return for August was 0.1%, and a large percentage show losses year to date.
Households with over $100,000 in yearly income represent 22% of aggregate income in the U.S. compared with 18% only 10 years ago.
David O’Reilly, Chmn. & CEO of ChevronTexaco: "I think there is the potential for an underlying shift in value of the oil price. It is possible we are at the same place as we were in the late 1970s, although I don’t want to say that in absolute terms. There is a lack of spare capacity out there."
Fed Governor Edward Gramlich stated it is "virtually inevitable" that oil price shocks will result in some combination of higher inflation and higher unemployment for a time. However, he went on to say, that "our worst possible outcome is for monetary policy makers to let inflation come loose from its moorings." In actuality, it is the Fed that started the inflation ball rolling, such as, in housing, by printing money at double digit rates and keeping Fed Funds at artificially low levels. The "natural rate" for the Fed is a level where their screws do come loose from their moorings.
According to John S. Herold and Harrison Lovegrove & Co., last year oil companies spent about $30 billion on stock buybacks and $30 billion looking for new oil and gas fields.
In a new Harris poll, Kerry leads Bush 48% to 47%. The new Pew poll shows the candidates even. The Tradesports presidential contract has Bush at 67 and Kerry at 32. It’s a little like the "bond pros" who are short the 10 year treasury notes. They are having trouble reading the tea leaves and their positions are in the red.
Abebooks.com is the world’s largest online marketplace for books with over 60 million new, used, rare, and out-of-print books. Their textbook sales for the month of August were up 394% from the same time last year. The company attributes the strong sales to, among several contributing factors including, "financially strapped students are increasingly wary of expensive new editions and are turning to online booksellers for a wider selection and competitive pricing on new and used textbooks."
According to Bankrate.com’s weekly national survey of large lenders, the 15-year fixed rate mortgage fell this week to 5.16% from 5.23%.
The news can and will get worse. A total of 1,020 U.S. service members have been killed in Iraq. The report by Charles Duelfer, chief U.S. weapons inspector, will show that, after a year and a half in Iraq, no WMD have been found. U.N. Secretary-General Kofi Annan stated the U.S. invasion of Iraq was illegal because it violated the U.N. charter. The U.S. is part of the 15-member Security Council and Annan said that Council should have approved the invasion. After the election, more troops will be sent to Iraq. This is Bush’s Vietnam.
The news on the business front will get worse. An example is the Philadelphia Fed Manufacturing Index that fell in September to 13.4 from 28.5 in August. The future general activity index fell to 44.9 from 52.7. Meanwhile, our country’s debt continues to grow. U.S. second quarter non-financial debt grew at a 7.7% annual rate, close to triple the rate of growth of our GDP. U.S. second quarter debt grew at a 9.5% annual rate. The Federal debt increased at a 10.7% rate, down slightly from the 12% rate in the first quarter. There is no legitimate excuse for the Federal debt to rise at this rate. At the same time, according to the BLS, adjusted for the 0.1% increase in the CPI, real average weekly earnings increased by 0.2% from July to August. Average weekly hours were unchanged. The core CPI (excl. food and energy) is up 1.8% from one year ago, below the average of 2.3% over the past 10 years. The Fed, however, wants to raise interest rates again. If they raise the Fed Funds to 1.75 percent that will roughly equate to the core CPI rate of increase for the past 12 months. With GDP growth slowing, there is no reason to raise rates any more than that. If you doubt that growth is slowing, just look at the yield on 10 year treasury notes at 4.07%, the same level seen in February 2004.
If business were buoyant, there would not be as many plant closures and mass layoffs. United Airlines has about 62,000 employees, down from more than 100,000 three years ago. The CEO mentioned that additional significant job cuts can be expected, and there is speculation of changes in their Denver hub. The Maytag Galesburg, Ill. Plant closed its doors this week, and 900 jobs were lost- to Mexico. Maytag stated they would also layoff up to 170 workers at its washer and dryer plant in Newton, Iowa this month. The layoffs are due to lower demand for certain products at the Newton plant.
Jobless claims rose 16,000 in the week ending Sept. 16.
Nortel, North America’s largest maker of telecom equipment, stated that it expects to report lower third quarter revenues compared to the second quarter.
In June, international investors purchased a net $40.6 billion in U.S. gov’t debt. In July, that figure declined to $22.4 billion.
According to the CFSB Tremont hedge fund index, the average return for August was 0.1%, and a large percentage show losses year to date.
Households with over $100,000 in yearly income represent 22% of aggregate income in the U.S. compared with 18% only 10 years ago.
David O’Reilly, Chmn. & CEO of ChevronTexaco: "I think there is the potential for an underlying shift in value of the oil price. It is possible we are at the same place as we were in the late 1970s, although I don’t want to say that in absolute terms. There is a lack of spare capacity out there."
Fed Governor Edward Gramlich stated it is "virtually inevitable" that oil price shocks will result in some combination of higher inflation and higher unemployment for a time. However, he went on to say, that "our worst possible outcome is for monetary policy makers to let inflation come loose from its moorings." In actuality, it is the Fed that started the inflation ball rolling, such as, in housing, by printing money at double digit rates and keeping Fed Funds at artificially low levels. The "natural rate" for the Fed is a level where their screws do come loose from their moorings.
According to John S. Herold and Harrison Lovegrove & Co., last year oil companies spent about $30 billion on stock buybacks and $30 billion looking for new oil and gas fields.
In a new Harris poll, Kerry leads Bush 48% to 47%. The new Pew poll shows the candidates even. The Tradesports presidential contract has Bush at 67 and Kerry at 32. It’s a little like the "bond pros" who are short the 10 year treasury notes. They are having trouble reading the tea leaves and their positions are in the red.
Abebooks.com is the world’s largest online marketplace for books with over 60 million new, used, rare, and out-of-print books. Their textbook sales for the month of August were up 394% from the same time last year. The company attributes the strong sales to, among several contributing factors including, "financially strapped students are increasingly wary of expensive new editions and are turning to online booksellers for a wider selection and competitive pricing on new and used textbooks."
According to Bankrate.com’s weekly national survey of large lenders, the 15-year fixed rate mortgage fell this week to 5.16% from 5.23%.
Thursday, September 16, 2004
9/16/04 Storms
According to the latest Duke University CFO Outlook Survey, chief financial officers of U.S. corporations are markedly less optimistic about the domestic economy than they were three months ago, and they are concerned about consumer spending, health-care costs, and domestic terrorism. CFOs predict only 2.8% real GDP growth over the next 12 months. This forecast is considerably lower than the Fed’s expectations. When was the last time the Fed was right?
Regarding the Administration’s Medicare program, which went into law based on cost estimates that were $135 billion lower than those documented by Rick Foster, the chief Medicare actuary at the HHS, once the drug benefit begins in 2006, seniors will pay an additional premium that goes up every year.
According to the BLS, employer costs for employee compensation averaged $24.96 prt hour worked in June 2004. Wages and salaries averaged $17.70 and benefits amounted to $7.26. Costs for legally required benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation, averaged $2.03 per hour, representing the largest non-wage employer cost.
Kerr-McGee Chemical, a wholly-owned affiliate of Kerr-McGee Corp., is the world’s third-largest producer and marketer of titanium dioxide pigment, an inorganic whitener and opacifier for paints, plastics, paper, inks, and hundreds of consumer products. The company plans to shut down its titanium pigment sulfate production at its Savannah facility by the end of September and will cut 140 jobs.
According to a report by Genomic Society Consulting, an emerging services sector in India is poised to capture a new wave of offshore contracts from the U.S. pharmaceutical, biotech, and life sciences technology industries. They report "known worldwide for sophisticated IT services, and lately for a biotechnology boom that is moving from copycat drugs into R&D, India is well-positioned to merge the talent of these two industries into a service sector that meets the needs of the global drug discovery industry. Our research reveals that salaries for skilled professionals and PhDs in this sector are as much as 90% lower in India than the U.S., so cost savings can be significant."
Shanghai’s National Bureau of Statistics slashed its forecast for China’s full-year automobile production to 2.39 million units from 2.82 million and trimmed the annual growth rate to 18% from 40%. With output in July and August nearly flat, more than 30% of capacity stood idle as vehicle makers were forced to cut prices to try and get through stalled inventories, stated the NBS. China’s vehicle market is currently the world’s fourth largest. Xu Yunkai, an auto analyst with Guotai Junan Securities, stated "auto consumers are becoming more rational and are waiting for price cuts as they also focus more on brands and the service offered by the auto companies." The NBS also said carmakers were likely to try and consolidate their position in the market by steeper price reductions while reducing production. The market in China has been doing the heavy lifting for GM. The company won’t come close to making their numbers for 2005.
U.S. business inventories grew 0.9% in July while sales only increased 0.6%. Auto inventories, already bloated, increased 1.8%. Wall Street took the inventory rise as being bullish. Maybe that’s because they’ve not run a business. When inventory production outpaces sales for two consecutive months, that spells potential problems. Has Wall Street ever heard of just-in-time inventories? If not, Wal-Mart can explain it. Bloated inventories will create price reductions and production cutbacks. That’s the story in China’s auto market.
Sluggish sales in North America and Europe will cause Coca Cola to miss second half estimates by a wide margin.
The state of Washington lost 6,800 jobs in August and the unemployment rate rose to 6.2% from July’s 6%. In February 2004, the rate was also 6.2%. That’s six months without an improvement.
August factory capacity utilization was unchanged at 77.3%. There is plenty of slack in this economy.
H. Ross Perot: "If you see a snake, just kill it. Don’t appoint a committee on a snake."
H. Ross Perot: "If we did nit have such a thing as an airline industry today, we would probably create something the size of NASA to make one."
The API stated that crude inventories fell by 2.3 million barrels in the week ended Spt. 10 while the Energy Dept reported a 7.1 million barrel drop. Every day gas prices remain at high levels is another day of pressure on consumer cash flow.
After Associated Ban-Corp completes the acquisition of First Federal Capital, about 425 positions will be cut.
A Goldman Sachs survey indicated softening corporate spending on technology.
According to the Generic Pharmaceutical Assoc., generics represent 51% of the total prescriptions dispensed in the U.S., but represents less than 8% of all dollars spent on prescription drugs.
It may not be readily apparent, but we are facing a recession right in the face. The consumer has started the ball rolling. Exports into the U.S. are feeling the pinch.
William McChesney Martin: "The Fed’s mission is to take away the punch bowl just when the party gets going." That statement was made several decades ago. Today the punch bowl is on empty and the Fed’s grasp of the economy has long since been rinsed down the drain.
The National Intelligence Council (that's funny) provided a pessimistic assessment about the future security and stability of Iraq.
According to the latest Duke University CFO Outlook Survey, chief financial officers of U.S. corporations are markedly less optimistic about the domestic economy than they were three months ago, and they are concerned about consumer spending, health-care costs, and domestic terrorism. CFOs predict only 2.8% real GDP growth over the next 12 months. This forecast is considerably lower than the Fed’s expectations. When was the last time the Fed was right?
Regarding the Administration’s Medicare program, which went into law based on cost estimates that were $135 billion lower than those documented by Rick Foster, the chief Medicare actuary at the HHS, once the drug benefit begins in 2006, seniors will pay an additional premium that goes up every year.
According to the BLS, employer costs for employee compensation averaged $24.96 prt hour worked in June 2004. Wages and salaries averaged $17.70 and benefits amounted to $7.26. Costs for legally required benefits, including Social Security, Medicare, unemployment insurance, and workers’ compensation, averaged $2.03 per hour, representing the largest non-wage employer cost.
Kerr-McGee Chemical, a wholly-owned affiliate of Kerr-McGee Corp., is the world’s third-largest producer and marketer of titanium dioxide pigment, an inorganic whitener and opacifier for paints, plastics, paper, inks, and hundreds of consumer products. The company plans to shut down its titanium pigment sulfate production at its Savannah facility by the end of September and will cut 140 jobs.
According to a report by Genomic Society Consulting, an emerging services sector in India is poised to capture a new wave of offshore contracts from the U.S. pharmaceutical, biotech, and life sciences technology industries. They report "known worldwide for sophisticated IT services, and lately for a biotechnology boom that is moving from copycat drugs into R&D, India is well-positioned to merge the talent of these two industries into a service sector that meets the needs of the global drug discovery industry. Our research reveals that salaries for skilled professionals and PhDs in this sector are as much as 90% lower in India than the U.S., so cost savings can be significant."
Shanghai’s National Bureau of Statistics slashed its forecast for China’s full-year automobile production to 2.39 million units from 2.82 million and trimmed the annual growth rate to 18% from 40%. With output in July and August nearly flat, more than 30% of capacity stood idle as vehicle makers were forced to cut prices to try and get through stalled inventories, stated the NBS. China’s vehicle market is currently the world’s fourth largest. Xu Yunkai, an auto analyst with Guotai Junan Securities, stated "auto consumers are becoming more rational and are waiting for price cuts as they also focus more on brands and the service offered by the auto companies." The NBS also said carmakers were likely to try and consolidate their position in the market by steeper price reductions while reducing production. The market in China has been doing the heavy lifting for GM. The company won’t come close to making their numbers for 2005.
U.S. business inventories grew 0.9% in July while sales only increased 0.6%. Auto inventories, already bloated, increased 1.8%. Wall Street took the inventory rise as being bullish. Maybe that’s because they’ve not run a business. When inventory production outpaces sales for two consecutive months, that spells potential problems. Has Wall Street ever heard of just-in-time inventories? If not, Wal-Mart can explain it. Bloated inventories will create price reductions and production cutbacks. That’s the story in China’s auto market.
Sluggish sales in North America and Europe will cause Coca Cola to miss second half estimates by a wide margin.
The state of Washington lost 6,800 jobs in August and the unemployment rate rose to 6.2% from July’s 6%. In February 2004, the rate was also 6.2%. That’s six months without an improvement.
August factory capacity utilization was unchanged at 77.3%. There is plenty of slack in this economy.
H. Ross Perot: "If you see a snake, just kill it. Don’t appoint a committee on a snake."
H. Ross Perot: "If we did nit have such a thing as an airline industry today, we would probably create something the size of NASA to make one."
The API stated that crude inventories fell by 2.3 million barrels in the week ended Spt. 10 while the Energy Dept reported a 7.1 million barrel drop. Every day gas prices remain at high levels is another day of pressure on consumer cash flow.
After Associated Ban-Corp completes the acquisition of First Federal Capital, about 425 positions will be cut.
A Goldman Sachs survey indicated softening corporate spending on technology.
According to the Generic Pharmaceutical Assoc., generics represent 51% of the total prescriptions dispensed in the U.S., but represents less than 8% of all dollars spent on prescription drugs.
It may not be readily apparent, but we are facing a recession right in the face. The consumer has started the ball rolling. Exports into the U.S. are feeling the pinch.
William McChesney Martin: "The Fed’s mission is to take away the punch bowl just when the party gets going." That statement was made several decades ago. Today the punch bowl is on empty and the Fed’s grasp of the economy has long since been rinsed down the drain.
The National Intelligence Council (that's funny) provided a pessimistic assessment about the future security and stability of Iraq.
Wednesday, September 15, 2004
9/15/04 Ivan Comes Packing
From Florida to Louisiana, millions wait for the arrival of Ivan. Meanwhile, Royal Dutch Shell evacuated 850 employees at its exploration and production facilities in the eastern and central Gulf of Mexico, and this will impact 445,000 barrels of oil and 1.443 billion cubic feet of gas per day.
Japan is having its worst typhoon season on record.
Of 45 million Americans without health insurance, 60% work in small businesses.
Xilinx cuts its second quarter revenue outlook as well as its gross margin forecast. The company stated that sales in the Asia Pacific region will be down double digits from the first quarter.
Oracle’s application software sales declined 36% in the quarter. PeopleSoft is in that business.
According to the Commerce Dept, the U.S. current account deficit widened to a record $166.2 billion in the second quarter from $147.2 billion in the first quarter and that’s with a weak U.S. dollar. The deficit increased to a record 5.7% of GDP during the quarter. If we include the other half of the twin tower deficits, then the deficits amount to 10% of our GDP, and that is enough to topple our economic well being.
Lakshman Achuthan, Economic Cycle Research Institute managing director: "The numbers show that retail sales are in a clear cyclical downtrend." Just a reminder that we are a consumer-based economy.
North Carolina has lost 160,000 manufacturing jobs under Bush. A GOP presidential nominee hasn’t lost North Carolina since 1976. Edwards is the first North Carolinian on a national ticket in 140 years.
The Pension Benefit Guaranty Corp. pays benefits to about 1 million Americans and insures private pensions for approximately 43 million more. In a 29-page report by the Center On Federal Financial Institutions, the analysis revealed that the PBGC will run out of money in 2020 if current financial conditions persist. The agency’s programs ended 2003 with about $35 billion of assets, according to its annual report.
The recent study by the Center for Economic and Policy Research stated that between March 2001 and July 2004 the state of Pennsylvania lost over 81,000 jobs, or 1.4% of the total number of jobs in the state. During that three year time period, nearly 1 in 20 Pennsylvania workers lost a long-term job compared with about 1 in 25 in the nation as a whole.
Herbert Hoover: "There are only three ways to meet unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation."
George W. Bush: "Natural gas is hemispheric. I like to call it hemispheric in nature because it is a product that we can find in our neighborhoods."
Wyeth is closing its West Chester, PA plant and 200 employees will lose their jobs. Foremost Dairies will close its plant in Hawaii. The company provides 25% of the state’s milk supply, and 120 workers will be out of jobs.
The state of Oklahoma remains more than 50,000 jobs, or 3.6%, below the June 2001 peak in seasonally adjusted employment.
The Center for Urban Economic Development at the University of Illinois-Chicago released a study yesterday showing that more than 403,000 U.S. information technology jobs have disappeared since March 2001. The report stated "the gap between the ‘two economies’…is especially pronounced in the information techology industry, where job dislocations due to ‘offshoring’ have contributed to an already hard-hit IT industry."
Grant Aldonas, U.S. undersecretary of commerce, stated he told China to expect American textile makers to seek new limits on Chinese imports as soon as next week.
In 1999, according to the Labor Dept, the average household health expenditure was $1,959, or 4.5% of income. In 2002, it had risen to $2,350 a year, or 4.8% of its income. In fact, in 2002, healthcare spending exceeded federal taxes as a percentage of household income. In late November 2004, the figures will be released for 2003. The percentages will have risen once again, and most likely equate to 5% of the average household income. It should be noted that, even with the rising cost of gasoline, nearly twice as much is spent on healthcare than on gas by the average household. When analyzing the slowing of retail sales, the key ingredient not mentioned is rising healthcare expenditures as a percentage of the average household income. Between healthcare and gas, the average consumer has no choice but to cut back. After accounting for inflation, wages and salaries and benefits are falling for the paycheck-to-paycheck consumer. The numbers work against a consumer-based economy. Going against those statistics will bring you a lot of investor hurt.
From Florida to Louisiana, millions wait for the arrival of Ivan. Meanwhile, Royal Dutch Shell evacuated 850 employees at its exploration and production facilities in the eastern and central Gulf of Mexico, and this will impact 445,000 barrels of oil and 1.443 billion cubic feet of gas per day.
Japan is having its worst typhoon season on record.
Of 45 million Americans without health insurance, 60% work in small businesses.
Xilinx cuts its second quarter revenue outlook as well as its gross margin forecast. The company stated that sales in the Asia Pacific region will be down double digits from the first quarter.
Oracle’s application software sales declined 36% in the quarter. PeopleSoft is in that business.
According to the Commerce Dept, the U.S. current account deficit widened to a record $166.2 billion in the second quarter from $147.2 billion in the first quarter and that’s with a weak U.S. dollar. The deficit increased to a record 5.7% of GDP during the quarter. If we include the other half of the twin tower deficits, then the deficits amount to 10% of our GDP, and that is enough to topple our economic well being.
Lakshman Achuthan, Economic Cycle Research Institute managing director: "The numbers show that retail sales are in a clear cyclical downtrend." Just a reminder that we are a consumer-based economy.
North Carolina has lost 160,000 manufacturing jobs under Bush. A GOP presidential nominee hasn’t lost North Carolina since 1976. Edwards is the first North Carolinian on a national ticket in 140 years.
The Pension Benefit Guaranty Corp. pays benefits to about 1 million Americans and insures private pensions for approximately 43 million more. In a 29-page report by the Center On Federal Financial Institutions, the analysis revealed that the PBGC will run out of money in 2020 if current financial conditions persist. The agency’s programs ended 2003 with about $35 billion of assets, according to its annual report.
The recent study by the Center for Economic and Policy Research stated that between March 2001 and July 2004 the state of Pennsylvania lost over 81,000 jobs, or 1.4% of the total number of jobs in the state. During that three year time period, nearly 1 in 20 Pennsylvania workers lost a long-term job compared with about 1 in 25 in the nation as a whole.
Herbert Hoover: "There are only three ways to meet unpaid bills of a nation. The first is taxation. The second is repudiation. The third is inflation."
George W. Bush: "Natural gas is hemispheric. I like to call it hemispheric in nature because it is a product that we can find in our neighborhoods."
Wyeth is closing its West Chester, PA plant and 200 employees will lose their jobs. Foremost Dairies will close its plant in Hawaii. The company provides 25% of the state’s milk supply, and 120 workers will be out of jobs.
The state of Oklahoma remains more than 50,000 jobs, or 3.6%, below the June 2001 peak in seasonally adjusted employment.
The Center for Urban Economic Development at the University of Illinois-Chicago released a study yesterday showing that more than 403,000 U.S. information technology jobs have disappeared since March 2001. The report stated "the gap between the ‘two economies’…is especially pronounced in the information techology industry, where job dislocations due to ‘offshoring’ have contributed to an already hard-hit IT industry."
Grant Aldonas, U.S. undersecretary of commerce, stated he told China to expect American textile makers to seek new limits on Chinese imports as soon as next week.
In 1999, according to the Labor Dept, the average household health expenditure was $1,959, or 4.5% of income. In 2002, it had risen to $2,350 a year, or 4.8% of its income. In fact, in 2002, healthcare spending exceeded federal taxes as a percentage of household income. In late November 2004, the figures will be released for 2003. The percentages will have risen once again, and most likely equate to 5% of the average household income. It should be noted that, even with the rising cost of gasoline, nearly twice as much is spent on healthcare than on gas by the average household. When analyzing the slowing of retail sales, the key ingredient not mentioned is rising healthcare expenditures as a percentage of the average household income. Between healthcare and gas, the average consumer has no choice but to cut back. After accounting for inflation, wages and salaries and benefits are falling for the paycheck-to-paycheck consumer. The numbers work against a consumer-based economy. Going against those statistics will bring you a lot of investor hurt.
Tuesday, September 14, 2004
9/14/04 A Lesson In Branding
Pepe Escobar of the Hong Kong Asia Times: "President Bush’s crusade is a failure. ..Al Qaeda, from a business point of view, is a major success: it is a global brand and a global movement…Bin Laden is laughing. Bush’s crusade has legitimized an obscure sect as a worldwide symbol of political revolt. How could bin Laden not vote for Bush?"
The New Investors Business Daily poll shows the Bush-Kerry race tied and that the RNC bounce is fading. If investors have been pouring money into the market because they consider a Bush victory a lock, maybe they had better think twice. It’s tough to win when you have accomplished mostly negative results.
Ivan is about 500 miles south of Pensacola with top sustained winds remaining at 160 mph. The last time 3 storms hit Florida in such a short stretch of time was 1964, but those storms did not pack the same punch. Florida is the fourth-biggest state in the nation as measured by population, economic output, and worker payrolls.
It is new product day on the corporate headquarters campus at Microsoft. If any of the products are as successful at hotmail, they will have lots to cheer. There are 330 million registered hotmail users just in the U.S.
Secretary of State Powell: Regarding WMD in Iraq, he stated "I think it’s unlikely we will find any stockpiles."
LSI Logic cut its third quarter outlook citing customer inventory build-up.
Economist Arindrajit Dube with UC Berkeley’s Institute for Industrial Relations stated that, when the unemployment rate and the payroll number paint different pictures, the relationship between wage growth and productivity may be the best indicator of labor market health. Citing Labor Dept figures, Dube stated productivity grew 4% from August 2003 to August 2004, but wages after inflation actually fell during that period. He said " that is a symptom of a weak labor market."
Heating oil for October delivery is $1.206 per gallon.
OPEC is currently producing at the max- at 29.92 million barrels per day in August. In my view, with crude trading at $44.45 a barrel, and the average price on a national level for regular unleaded gas around $1.85, gas at the pump is probably underpriced by about 10 to 20 cents per gallon.
Let us not forget that Bush has made the decision to top off the Strategic Oil Reserve, which stands at 97% of capacity. The topping off will begin monthly on October 1, and continue for about eight months.
According to the Oil and Gas Journal, the U.S. has the 11th largest proved oil reserves in the world, but the U.S. is the #1 energy consumer and net importer.
Delphi closed its Flint, Michigan plant and 450 were laid off. In 2004, they have eliminated 4,925 jobs and the goal is to cut close to 6,000 by year-end. Johnson Controls closed a sun visor plant in Holland, Michigan and 800 jobs went to Mexico. Funny that Bush was in Michigan yesterday but never mentioned that.
In 2000, Bush won Ohio by 3.5 percentage points. One key reason was he garnered 59% of the vote in places like Seneca County. When Bush took office in 2001, Seneca County had 7% unemployment. Today it has risen to 10.2% and that level represents a significant threshold of pain.
John Kingston, global director of oil at Platts Survey, stated "while consumers can certainly feel encouraged by the continuing surge in OPEC output, that upward movement keeps bringing the world closer to 100% of capacity utilization. This growth in output is not showing signs of building significant amounts of inventory, and it raises the question of where the spare supply is going to come from should there be a disruption or a colder than average winter. It is important to note that we are about to begin the fourth quarter-traditionally the period of highest global demand for oil."
In order to reach a "neutral" level, San Francisco Fed’s Yellen stated the federal funds target would need to rise to between 3.5% and 4.5%, Cleveland Fed’s Pianalto used a wider range of 3% to 5%. Meanwhile, 10-year treasury notes are at 4.15%. We’ll see whether Fed governors or the market make the final determination.
Pepe Escobar of the Hong Kong Asia Times: "President Bush’s crusade is a failure. ..Al Qaeda, from a business point of view, is a major success: it is a global brand and a global movement…Bin Laden is laughing. Bush’s crusade has legitimized an obscure sect as a worldwide symbol of political revolt. How could bin Laden not vote for Bush?"
The New Investors Business Daily poll shows the Bush-Kerry race tied and that the RNC bounce is fading. If investors have been pouring money into the market because they consider a Bush victory a lock, maybe they had better think twice. It’s tough to win when you have accomplished mostly negative results.
Ivan is about 500 miles south of Pensacola with top sustained winds remaining at 160 mph. The last time 3 storms hit Florida in such a short stretch of time was 1964, but those storms did not pack the same punch. Florida is the fourth-biggest state in the nation as measured by population, economic output, and worker payrolls.
It is new product day on the corporate headquarters campus at Microsoft. If any of the products are as successful at hotmail, they will have lots to cheer. There are 330 million registered hotmail users just in the U.S.
Secretary of State Powell: Regarding WMD in Iraq, he stated "I think it’s unlikely we will find any stockpiles."
LSI Logic cut its third quarter outlook citing customer inventory build-up.
Economist Arindrajit Dube with UC Berkeley’s Institute for Industrial Relations stated that, when the unemployment rate and the payroll number paint different pictures, the relationship between wage growth and productivity may be the best indicator of labor market health. Citing Labor Dept figures, Dube stated productivity grew 4% from August 2003 to August 2004, but wages after inflation actually fell during that period. He said " that is a symptom of a weak labor market."
Heating oil for October delivery is $1.206 per gallon.
OPEC is currently producing at the max- at 29.92 million barrels per day in August. In my view, with crude trading at $44.45 a barrel, and the average price on a national level for regular unleaded gas around $1.85, gas at the pump is probably underpriced by about 10 to 20 cents per gallon.
Let us not forget that Bush has made the decision to top off the Strategic Oil Reserve, which stands at 97% of capacity. The topping off will begin monthly on October 1, and continue for about eight months.
According to the Oil and Gas Journal, the U.S. has the 11th largest proved oil reserves in the world, but the U.S. is the #1 energy consumer and net importer.
Delphi closed its Flint, Michigan plant and 450 were laid off. In 2004, they have eliminated 4,925 jobs and the goal is to cut close to 6,000 by year-end. Johnson Controls closed a sun visor plant in Holland, Michigan and 800 jobs went to Mexico. Funny that Bush was in Michigan yesterday but never mentioned that.
In 2000, Bush won Ohio by 3.5 percentage points. One key reason was he garnered 59% of the vote in places like Seneca County. When Bush took office in 2001, Seneca County had 7% unemployment. Today it has risen to 10.2% and that level represents a significant threshold of pain.
John Kingston, global director of oil at Platts Survey, stated "while consumers can certainly feel encouraged by the continuing surge in OPEC output, that upward movement keeps bringing the world closer to 100% of capacity utilization. This growth in output is not showing signs of building significant amounts of inventory, and it raises the question of where the spare supply is going to come from should there be a disruption or a colder than average winter. It is important to note that we are about to begin the fourth quarter-traditionally the period of highest global demand for oil."
In order to reach a "neutral" level, San Francisco Fed’s Yellen stated the federal funds target would need to rise to between 3.5% and 4.5%, Cleveland Fed’s Pianalto used a wider range of 3% to 5%. Meanwhile, 10-year treasury notes are at 4.15%. We’ll see whether Fed governors or the market make the final determination.
Monday, September 13, 2004
9/13/04 Between Bare Tolerance And Outright Hostility
A senior U.S. diplomat in Baghdad: "We're dealing with a population that hovers between bare tolerance and outright hostility. The idea of a functioning democracy here is crazy. We thought there would be a reprieve after sovereignty, but all hell us breaking loose." In August, there were an average of 87 attacks per day on U.S. troops. The attacks are taking place over an increasingly larger geographical area. You should seriously ask yourself who is winning this war. This is Bush's Viet Nam, and thousands and thousands of our troops will die and be wounded before the fighting ends. If you believe we invaded to rid the world of Saddam, then you need to increase your daily dosage of Prozac.
One third of U.S. oil production is located in the Gulf of Mexico. Yesterday, with Ivan approaching, Shell Oil shut down production at two sub-sea wells and took about 150 staff members off platforms in the eastern part of the Gulf.
The 2005 Old Farmer's Almanac calls for this winter to have above average snowfall and colder than normal temperatures.
Ffe Governor Susan Bies: "Our main direction is clearly up, but there's no urgency. We're not hitting all cylinders yet, and that gives us a little bit of time." We're not even close to hitting on all cylinders. This is not a Roger Federer economy.
In August 2002, U.S. Air filed for bankruptcy protection and emerged from bankruptcy in March 2003. Yesterday tey filed again for bankruptcy protetion and seek $800 million in concessions from their employees, and they number 28,000. The airline stated employees will be paid and their benefits will continue. For how long though? In my view, there are too many airlines, too many auto companies, and so on. It's only a matter of time until the less efficient disappear. It is the survival of the fittest. Hopefully, the employees impacted will have viable alternatives for earning a living. That concerns me greatly.
GM's CEO: "We've been running at the limits on inventory." GM is carrying an average of 85 days of supply of light trucks. They may have to park some of these vehicles in the Mohave next to the mothballed jets.
A senior U.S. diplomat in Baghdad: "We're dealing with a population that hovers between bare tolerance and outright hostility. The idea of a functioning democracy here is crazy. We thought there would be a reprieve after sovereignty, but all hell us breaking loose." In August, there were an average of 87 attacks per day on U.S. troops. The attacks are taking place over an increasingly larger geographical area. You should seriously ask yourself who is winning this war. This is Bush's Viet Nam, and thousands and thousands of our troops will die and be wounded before the fighting ends. If you believe we invaded to rid the world of Saddam, then you need to increase your daily dosage of Prozac.
One third of U.S. oil production is located in the Gulf of Mexico. Yesterday, with Ivan approaching, Shell Oil shut down production at two sub-sea wells and took about 150 staff members off platforms in the eastern part of the Gulf.
The 2005 Old Farmer's Almanac calls for this winter to have above average snowfall and colder than normal temperatures.
Ffe Governor Susan Bies: "Our main direction is clearly up, but there's no urgency. We're not hitting all cylinders yet, and that gives us a little bit of time." We're not even close to hitting on all cylinders. This is not a Roger Federer economy.
In August 2002, U.S. Air filed for bankruptcy protection and emerged from bankruptcy in March 2003. Yesterday tey filed again for bankruptcy protetion and seek $800 million in concessions from their employees, and they number 28,000. The airline stated employees will be paid and their benefits will continue. For how long though? In my view, there are too many airlines, too many auto companies, and so on. It's only a matter of time until the less efficient disappear. It is the survival of the fittest. Hopefully, the employees impacted will have viable alternatives for earning a living. That concerns me greatly.
GM's CEO: "We've been running at the limits on inventory." GM is carrying an average of 85 days of supply of light trucks. They may have to park some of these vehicles in the Mohave next to the mothballed jets.
Sunday, September 12, 2004
9/12/04 The Tax Holiday On Foreign-Earned Profits
If one steps back and views the global economic landscape, it would be clear that profits generated outside our borders are growing much more rapidly than those from domestic operations. A prime example would be the auto results for GM in China compared with those in the U.S. Most Americans don’t realize that those foreign profits remain overseas and are not taxed. Foreign subsidiaries of U.S. companies are holding an estimated $500 billion in cash and other liquid assets. Why? Tax provisions permit U.S. corporations to defer payment on profits made outside the U.S. so long as the profits are not brought back into our country. This stimulates the building of new plants outside our borders as well as the hiring of additional employees. It should be noted that many products made in these overseas plants are, in fact, sold in the U.S. In my view, this situation bears heavily on the election debate and focuses on the untapped ability to stimulate our economy and provide new jobs. Bush wants to keep the status quo. Kerry has a plan that makes excellent sense and is most timely. Kerry’s plan would provide corporations with a one-year window to bring those foreign profits earned over the years back to the U.S. at a tax rate of 10%. After year one, those foreign earnings would be taxed at the same corporate rate as domestic earnings, and that would be true whether they remained overseas or returned to the U.S. In a report written just last year, J.P. Morgan Chase Bank estimated that at least $300 billion could be brought back to the U.S. and 400,000 jobs would be created.
With the rising federal budget deficit, there will not be a $20 billion bailout to help the states cover Medicaid. This year the states’ share of their Medicaid costs will grow 4.6%. Next year it will increase 12%. This will create budget gaps in about 33 states for fiscal 2005, which started on July 1 for all but four states.
Mary McCarthy: "If a politician tells you he’s going to make a ‘realistic decision," you immediately understand that he’s resolved to do something bad."
The Economic Report of the President for 2004 forecast that the number of payroll jobs would rise by at least 300,000 each month in election year. When was the last time Bush didn’t "misspeak" to the American people?
On Sept. 9, with no advance warning, Shasta Regional Medical Center in Shasta, CA announced plans to begin massive layoffs by issuing a list of more than 50 names of healthcare workers slated to lose their jobs. The hospital then began meeting with the individual employees one by one to inform them of their decision. Management had refused to meet with the workers’ union, SEIU 250, which has 100,000 members and is the largest healthcare union in the western U.S.
Martin Barnes, managing editor of the Bank Credit Analyst: "If you stand back and take a structural view of the world, deflation is still a bigger threat than inflation. It is still a highly competitive world and there is still the whole Asia supply story out there. Technology is still a disinflationary force in the sense that it encourages more competition and pushes prices down. The Internet is a true force for competition and low prices…Even though the Fed has had a very stimulative policy for some time now, they haven’t really been able to create a whole lot of inflation yet. Inflation popped up in asset prices and in the housing sector in some markets, but despite their best efforts inflation has been very slow to come back. That tells you there is a deflationary tone to the world."
If one steps back and views the global economic landscape, it would be clear that profits generated outside our borders are growing much more rapidly than those from domestic operations. A prime example would be the auto results for GM in China compared with those in the U.S. Most Americans don’t realize that those foreign profits remain overseas and are not taxed. Foreign subsidiaries of U.S. companies are holding an estimated $500 billion in cash and other liquid assets. Why? Tax provisions permit U.S. corporations to defer payment on profits made outside the U.S. so long as the profits are not brought back into our country. This stimulates the building of new plants outside our borders as well as the hiring of additional employees. It should be noted that many products made in these overseas plants are, in fact, sold in the U.S. In my view, this situation bears heavily on the election debate and focuses on the untapped ability to stimulate our economy and provide new jobs. Bush wants to keep the status quo. Kerry has a plan that makes excellent sense and is most timely. Kerry’s plan would provide corporations with a one-year window to bring those foreign profits earned over the years back to the U.S. at a tax rate of 10%. After year one, those foreign earnings would be taxed at the same corporate rate as domestic earnings, and that would be true whether they remained overseas or returned to the U.S. In a report written just last year, J.P. Morgan Chase Bank estimated that at least $300 billion could be brought back to the U.S. and 400,000 jobs would be created.
With the rising federal budget deficit, there will not be a $20 billion bailout to help the states cover Medicaid. This year the states’ share of their Medicaid costs will grow 4.6%. Next year it will increase 12%. This will create budget gaps in about 33 states for fiscal 2005, which started on July 1 for all but four states.
Mary McCarthy: "If a politician tells you he’s going to make a ‘realistic decision," you immediately understand that he’s resolved to do something bad."
The Economic Report of the President for 2004 forecast that the number of payroll jobs would rise by at least 300,000 each month in election year. When was the last time Bush didn’t "misspeak" to the American people?
On Sept. 9, with no advance warning, Shasta Regional Medical Center in Shasta, CA announced plans to begin massive layoffs by issuing a list of more than 50 names of healthcare workers slated to lose their jobs. The hospital then began meeting with the individual employees one by one to inform them of their decision. Management had refused to meet with the workers’ union, SEIU 250, which has 100,000 members and is the largest healthcare union in the western U.S.
Martin Barnes, managing editor of the Bank Credit Analyst: "If you stand back and take a structural view of the world, deflation is still a bigger threat than inflation. It is still a highly competitive world and there is still the whole Asia supply story out there. Technology is still a disinflationary force in the sense that it encourages more competition and pushes prices down. The Internet is a true force for competition and low prices…Even though the Fed has had a very stimulative policy for some time now, they haven’t really been able to create a whole lot of inflation yet. Inflation popped up in asset prices and in the housing sector in some markets, but despite their best efforts inflation has been very slow to come back. That tells you there is a deflationary tone to the world."
Saturday, September 11, 2004
9/11/04 2,749
Mark Twain: "Each nation knowing it has the only religion and the only sane system of government, each despising all the others, each an ass and not suspecting it."
Viktor Frankl: " We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken away from a man but one thing: the last of the human freedoms- to choose one’s attitude in any given set of circumstances, to choose one’s own way."
Henry Miller: "The world dies over and over again, but the skeleton always gets up and walks."
So many thoughts rushed through my mind on Sept. 11, 2001. In the darkness of night I recalled the words of Will Durant that "most of us spend too much time on the last twenty-four hours and too little time on the last six thousand years." My memory is pretty good but sometimes I forget details over a span of six thousand years. The point is that the terrorist attack by al-Qaeda did not just happen over night. Their hatred for the U.S. and Israel and others has been building for generations. It will not be eradicated through the elimination of bin Laden and al-Zawahiri. Through the multiplication of deadly cells, al-Qaeda has grown around the globe into a deadly force and is slowly morphing into a political party.
Hopefully, each and every day we will remember the 2,749 who perished in 9/11. We must learn from our mistakes. This terrorist attack could have been avoided. The warnings had been issued and ignored. That will not return the fallen to their loved ones and to their nation. We must think smarter. All terrorists are not Muslims. One half of our populace believes that Iraq conspired with al-Qaeda in the 9/11 attacks. Iraq is not the enemy. In fact, attacking Iraq only served the purposes of al-Qaeda. Without that invasion, there would not have been the Abu Ghuraib incidents of raping Muslim women and humiliating Muslim men. Those acts alone made our country more prone to terrorist attacks and increased the hatred for the U.S. in the eyes of Muslim nations.
It is despicable that 9/11 brought with it Homeland Security and the violation of the constitutional rights of all Americans. The President has assumed the almighty powers of Carnack the Magnificent. He is all knowing and all powerful and only he can determine who is an enemy combatant and take away your right to confer with lawyers and hold you for months in captivity-- all in the name of the terror card. We must think smarter. We must fight for our constitutional rights. A great many more Americans than 2,749 died fighting to protect those rights and those freedoms. We might consider the words of Bertrand Russell: "the whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts." We need to protect the memories of the 2,749. We need to protect our country from both terrorists and those who terrorize our rights in the name fighting threats. We must protect fellow Americans from those that swagger, which often masks a sign of insecurity and the daily stench of the mideast sky streaked with the high price of evil.
Mark Twain: "Each nation knowing it has the only religion and the only sane system of government, each despising all the others, each an ass and not suspecting it."
Viktor Frankl: " We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken away from a man but one thing: the last of the human freedoms- to choose one’s attitude in any given set of circumstances, to choose one’s own way."
Henry Miller: "The world dies over and over again, but the skeleton always gets up and walks."
So many thoughts rushed through my mind on Sept. 11, 2001. In the darkness of night I recalled the words of Will Durant that "most of us spend too much time on the last twenty-four hours and too little time on the last six thousand years." My memory is pretty good but sometimes I forget details over a span of six thousand years. The point is that the terrorist attack by al-Qaeda did not just happen over night. Their hatred for the U.S. and Israel and others has been building for generations. It will not be eradicated through the elimination of bin Laden and al-Zawahiri. Through the multiplication of deadly cells, al-Qaeda has grown around the globe into a deadly force and is slowly morphing into a political party.
Hopefully, each and every day we will remember the 2,749 who perished in 9/11. We must learn from our mistakes. This terrorist attack could have been avoided. The warnings had been issued and ignored. That will not return the fallen to their loved ones and to their nation. We must think smarter. All terrorists are not Muslims. One half of our populace believes that Iraq conspired with al-Qaeda in the 9/11 attacks. Iraq is not the enemy. In fact, attacking Iraq only served the purposes of al-Qaeda. Without that invasion, there would not have been the Abu Ghuraib incidents of raping Muslim women and humiliating Muslim men. Those acts alone made our country more prone to terrorist attacks and increased the hatred for the U.S. in the eyes of Muslim nations.
It is despicable that 9/11 brought with it Homeland Security and the violation of the constitutional rights of all Americans. The President has assumed the almighty powers of Carnack the Magnificent. He is all knowing and all powerful and only he can determine who is an enemy combatant and take away your right to confer with lawyers and hold you for months in captivity-- all in the name of the terror card. We must think smarter. We must fight for our constitutional rights. A great many more Americans than 2,749 died fighting to protect those rights and those freedoms. We might consider the words of Bertrand Russell: "the whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts." We need to protect the memories of the 2,749. We need to protect our country from both terrorists and those who terrorize our rights in the name fighting threats. We must protect fellow Americans from those that swagger, which often masks a sign of insecurity and the daily stench of the mideast sky streaked with the high price of evil.
Thursday, September 09, 2004
9/10/04 Big Day For Layoffs
Judge Walker, to my surprise, is permitting Oracle to proceed with the acquisition of PeopleSoft. If successful, Oracle has stated they would layoff 6,000 PeopleSoft employees. Alaska Air is letting go 900 workers. San Jose Medical Center is closing Dec. 9 and at least 450 workers will lose their jobs. Within the next three years. EDS may cut up to 17% of its workforce or 20,000 jobs. Oneida is closing its Sherrill, N.Y. plant and cutting 500 jobs. Dean Foods will close its Benton Harbor, MI plant but did not mention the number to lose their jobs.
George Akerlof, winner of the 2001 Nobel Prize in Economics: "I think this is the worst government the U.S. has ever had in its more than 200 years of history. It has engaged in extraordinarily irresponsible policies not only in foreign and economic but also in social and environmental policy."
According to Kaiser Family Foundation, health premiums rose five times faster than U.S. workers' salaries this year. In 2003, 15.6% of the population went without health insurance. In 2004, 61% of the people received health coverage at work, down from 65% in 2001.
U.S. gasoline supplies were down 2.5 million barrels last week, according to the Energy Dept. For the week ended Sept. 3, crude supplies were down 1.4 million barrels.
Auto inventories rose 2.3% in July, their largest monthly gain since December 2003.
Stocks on hand at wholesalers rose 1.3% in July. With the strength in household spending suspect, higher inventories most likely will lead to increased promotional activities on the part of retailers.
In 2000, 58% of working women voted for Gore and 39% for Bush. Nearly 8 million more women voted in 2000 than men.
Herbert Hoover: "Free speech does not live many hours after free industry and free commerce die." Our freedoms dwindle with the escalation of twin tower deficits. We answer to China and Japan as they help fund our government's irresponsible spending habits. The Administration and the Congress are no better than those strung out on heroin.
Herbert Hoover tried in vain to hang on to "our American system" and attempted to preserve the foundation of our liberties. FDR was committed to government intervention in the economy, and with his victory in 1932, our way of life has not been the same.
Since Bush took office, jobs have been lost and incomes have fallen and continue to fall.
The House voted to overturn the Labor Dept's new overtime rules.
After reporting disappointing earnings for the past six months, Alcoa warned that results for this quarter would fall far short of estimates.
AutoNation cut its 2004 outlook. About 30% of its operating profits are generated in Florida. The state accounts for 8% of Ford's total U.S. sales. Ivan is expected to reach Florida on Sunday.
The PPI dipped 0.1% in August. Our imports fell in July, the first time in nearly a year. This is another sign of the consumer pulling back on spending.
Judge Walker, to my surprise, is permitting Oracle to proceed with the acquisition of PeopleSoft. If successful, Oracle has stated they would layoff 6,000 PeopleSoft employees. Alaska Air is letting go 900 workers. San Jose Medical Center is closing Dec. 9 and at least 450 workers will lose their jobs. Within the next three years. EDS may cut up to 17% of its workforce or 20,000 jobs. Oneida is closing its Sherrill, N.Y. plant and cutting 500 jobs. Dean Foods will close its Benton Harbor, MI plant but did not mention the number to lose their jobs.
George Akerlof, winner of the 2001 Nobel Prize in Economics: "I think this is the worst government the U.S. has ever had in its more than 200 years of history. It has engaged in extraordinarily irresponsible policies not only in foreign and economic but also in social and environmental policy."
According to Kaiser Family Foundation, health premiums rose five times faster than U.S. workers' salaries this year. In 2003, 15.6% of the population went without health insurance. In 2004, 61% of the people received health coverage at work, down from 65% in 2001.
U.S. gasoline supplies were down 2.5 million barrels last week, according to the Energy Dept. For the week ended Sept. 3, crude supplies were down 1.4 million barrels.
Auto inventories rose 2.3% in July, their largest monthly gain since December 2003.
Stocks on hand at wholesalers rose 1.3% in July. With the strength in household spending suspect, higher inventories most likely will lead to increased promotional activities on the part of retailers.
In 2000, 58% of working women voted for Gore and 39% for Bush. Nearly 8 million more women voted in 2000 than men.
Herbert Hoover: "Free speech does not live many hours after free industry and free commerce die." Our freedoms dwindle with the escalation of twin tower deficits. We answer to China and Japan as they help fund our government's irresponsible spending habits. The Administration and the Congress are no better than those strung out on heroin.
Herbert Hoover tried in vain to hang on to "our American system" and attempted to preserve the foundation of our liberties. FDR was committed to government intervention in the economy, and with his victory in 1932, our way of life has not been the same.
Since Bush took office, jobs have been lost and incomes have fallen and continue to fall.
The House voted to overturn the Labor Dept's new overtime rules.
After reporting disappointing earnings for the past six months, Alcoa warned that results for this quarter would fall far short of estimates.
AutoNation cut its 2004 outlook. About 30% of its operating profits are generated in Florida. The state accounts for 8% of Ford's total U.S. sales. Ivan is expected to reach Florida on Sunday.
The PPI dipped 0.1% in August. Our imports fell in July, the first time in nearly a year. This is another sign of the consumer pulling back on spending.
9/9/04 Muted Economic Growth, Household Spending, and Inflation
The Fed beige book: "Several districts indicated that the pace has slowed since their last reports... household spending was reported to have softened in many parts of the nation... wage pressures remain modest... consumer prices were generally flat or up modestly."
Greenspan: "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased."
The story remains the same. The money continues to be made owning 10 year Treasury bonds. The yield yesterday wa 4.16%.
Cisco's John Chambers stated he expected most of his company's competitors to be Asian in 5 years time. That will translate into lower prices and smaller margins for Cisco.
Sara Lee will close its bakery in Ft. Payne, Alabama, and about 80 workers will be impacted. The Walker Systems plant in Williamstown, W VA is closing and 235 hourly and 75 salaried workers will be effected. Dean Foods will close its St. Joseph, MI plant and 45 workers will lose their jobs.
Retired Army LT Colonel Carlo D'Este: "There is no visible light at the end of the tunnel, nor has the Bush Administration articulated a viable exit strategy, without which the war will continue indefinitely- that is, years."
Lt. Col. Jerry Killian's Aug. 1, 1972 memo: "On this date I ordered that 1st LT. Bush be suspended from flight status due to failure to perform to USAF/TexANG standards and failure to meet annual physical examination...as ordered." On Aug. 18, 1973 Killian wrote "Bush was not here during rating period and I don't have any comments from 187th in Alabama. I will not rate." This is the real picture of this nation's Commander in Chief: does not follow orders, is suspended, and is not rated. His next in line, Cheney, had five deferments and never served. It's no wonder there is "no light at the end of the tunnel" in Iraq.
Export prices fell 0.5% in August compared with a revised 0.5% rise in July. Lower export prices combined with higher import prices for crude can do a number on a company's net profit margins.
The number of former workers continuing to receive state unemployment benefits rose by 20,000 to 2.9 million in the week ending Aug. 29.
The Fed beige book: "Several districts indicated that the pace has slowed since their last reports... household spending was reported to have softened in many parts of the nation... wage pressures remain modest... consumer prices were generally flat or up modestly."
Greenspan: "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased."
The story remains the same. The money continues to be made owning 10 year Treasury bonds. The yield yesterday wa 4.16%.
Cisco's John Chambers stated he expected most of his company's competitors to be Asian in 5 years time. That will translate into lower prices and smaller margins for Cisco.
Sara Lee will close its bakery in Ft. Payne, Alabama, and about 80 workers will be impacted. The Walker Systems plant in Williamstown, W VA is closing and 235 hourly and 75 salaried workers will be effected. Dean Foods will close its St. Joseph, MI plant and 45 workers will lose their jobs.
Retired Army LT Colonel Carlo D'Este: "There is no visible light at the end of the tunnel, nor has the Bush Administration articulated a viable exit strategy, without which the war will continue indefinitely- that is, years."
Lt. Col. Jerry Killian's Aug. 1, 1972 memo: "On this date I ordered that 1st LT. Bush be suspended from flight status due to failure to perform to USAF/TexANG standards and failure to meet annual physical examination...as ordered." On Aug. 18, 1973 Killian wrote "Bush was not here during rating period and I don't have any comments from 187th in Alabama. I will not rate." This is the real picture of this nation's Commander in Chief: does not follow orders, is suspended, and is not rated. His next in line, Cheney, had five deferments and never served. It's no wonder there is "no light at the end of the tunnel" in Iraq.
Export prices fell 0.5% in August compared with a revised 0.5% rise in July. Lower export prices combined with higher import prices for crude can do a number on a company's net profit margins.
The number of former workers continuing to receive state unemployment benefits rose by 20,000 to 2.9 million in the week ending Aug. 29.
Wednesday, September 08, 2004
9/8/04 Show Me The High-Paying JobsMissouri endured the worst job losses in the nation in July as the state lost 51,800 positions or 1.9% of its seasonally adjusted non-farm payroll. In St. Louis the unemployment rate rose to 6.5%. If you lived in Missouri, would you vote for Bush?Over the past 12 months, the total non-farm payrolls in Texas and Colorado have risen only 1.1%. That is certainly less than had been anticipated by the Bush Administration.Mark Zandi: "The job market is still very weak. Employers have the upper hand in any negotiation with employees, and that's weighing on compensation, particularly take home pay."In August, the average duration of unemployment without work was 19 weeks, compared with 18.6 weeks in July. This is mission accomplished?Peter Morici, an economist and professor of international business at the University of Maryland, stated "more workers will be compelled to accept positions without health benefits, and benefit packages, generally, will continue to deteriorate."The survey by Challenger, Gray, & Christmas found employers announced plans to cut 74,150 jobs in August, up 6.6% from July's announced layoffs. At the same time, employers announced plans to hire 132,105 workers in the weeks and months ahead, of which 83,450 would come from retailers and reflect the upcoming holiday season. They stated "many of those jobs may disappear by February." Importantly, Challenger added "there probably has never been a time when companies were this cautious to add workers in a recovery. There is undoubtedly a lot of concern about the fragile state of this recovery."Herbert Hoover on Sept. 17, 1928: "This recovery and this stability are no accident. It has not been achieved by luck. Were it not for sound governmental policies and wise leadership, employment conditions in America would be similar to those existing in many other parts of the world."George W. Bush on Aug. 9, 2004: "Let me put it to you bluntly. In a changing world, we want more people to have control over your own life."George W. Bush on Feb. 19, 2004: "Recession means that people's incomes, at the employer level, are going down, basically, relative to costs, people are getting laid off." Hoover could not have said it better.Since invading Iraq in March 2003, there have been a total of 1,002 military deaths. Every evening Bush and Cheney go to bed, I hope they see blood on their hands. They are personally responsible for sending our troops into harms way and invading Iraq and for "misspeaking" about the WMD. They went to the Congress for authorization to invade, and that authorization should never have taken place without a strong coalition of foreign nations accompanied by superior intelligence. In addition to the fallen 1,002, which grows each day, we have almost 7,000 wounded troops, and that does not include those impacted psychologically by the horrors of war. To re-elect these two would be to risk nightmares from blood on your hands. That's what your vote will get you.Delta Airlines will cut up to 10% of their workforce or 7,000 jobs in 18 months in an effort to avoid filing for bankruptcy.Ford will end the second of its two production shifts at its suburban St. Louis assembly plant effective Jan. 3, 2005. A total of 800 jobs will be eliminated.Alcan will close its Mays Landing, N.J. plastics manufacturing plant on October 3, and 74 jobs will be cut.
9/8/04 Show Me The High-Paying JobsMissouri endured the worst job losses in the nation in July as the state lost 51,800 positions or 1.9% of its seasonally adjusted non-farm payroll. In St. Louis the unemployment rate rose to 6.5%. If you lived in Missouri, would you vote for Bush?Over the past 12 months, the total non-farm payrolls in Texas and Colorado have risen only 1.1%. That is certainly less than had been anticipated by the Bush Administration.Mark Zandi: "The job market is still very weak. Employers have the upper hand in any negotiation with employees, and that's weighing on compensation, particularly take home pay."In August, the average duration of unemployment without work was 19 weeks, compared with 18.6 weeks in July. This is mission accomplished?Peter Morici, an economist and professor of international business at the University of Maryland, stated "more workers will be compelled to accept positions without health benefits, and benefit packages, generally, will continue to deteriorate."The survey by Challenger, Gray, & Christmas found employers announced plans to cut 74,150 jobs in August, up 6.6% from July's announced layoffs. At the same time, employers announced plans to hire 132,105 workers in the weeks and months ahead, of which 83,450 would come from retailers and reflect the upcoming holiday season. They stated "many of those jobs may disappear by February." Importantly, Challenger added "there probably has never been a time when companies were this cautious to add workers in a recovery. There is undoubtedly a lot of concern about the fragile state of this recovery."Herbert Hoover on Sept. 17, 1928: "This recovery and this stability are no accident. It has not been achieved by luck. Were it not for sound governmental policies and wise leadership, employment conditions in America would be similar to those existing in many other parts of the world."George W. Bush on Aug. 9, 2004: "Let me put it to you bluntly. In a changing world, we want more people to have control over your own life."George W. Bush on Feb. 19, 2004: "Recession means that people's incomes, at the employer level, are going down, basically, relative to costs, people are getting laid off." Hoover could not have said it better.Since invading Iraq in March 2003, there have been a total of 1,002 military deaths. Every evening Bush and Cheney go to bed, I hope they see blood on their hands. They are personally responsible for sending our troops into harms way and invading Iraq and for "misspeaking" about the WMD. They went to the Congress for authorization to invade, and that authorization should never have taken place without a strong coalition of foreign nations accompanied by superior intelligence. In addition to the fallen 1,002, which grows each day, we have almost 7,000 wounded troops, and that does not include those impacted psychologically by the horrors of war. To re-elect these two would be to risk nightmares from blood on your hands. That's what your vote will get you.Delta Airlines will cut up to 10% of their workforce or 7,000 jobs in 18 months in an effort to avoid filing for bankruptcy.Ford will end the second of its two production shifts at its suburban St. Louis assembly plant effective Jan. 3, 2005. A total of 800 jobs will be eliminated.Alcan will close its Mays Landing, N.J. plastics manufacturing plant on October 3 and 74 jobs will be cut.
Tuesday, September 07, 2004
9/8/04 Show Me The High-Paying Jobs
Missouri endured the worst job losses in the nation in July as the state lost 51,800 positions or 1.9% of its seasonally adjusted non-farm payroll. In St. Louis the unemployment rate rose to 6.5%. If you lived in Missouri, would you vote for Bush?
Over the past 12 months, the total non-farm payrolls in Texas and Colorado have risen only 1.1%. That is certainly less than had been anticipated by the Bush Administration.
Mark Zandi: "The job market is still very weak. Employers have the upper hand in any negotiation with employees, and that's weighing on compensation, particularly take home pay."
In August, the average duration of unemployment without work was 19 weeks, compared with 18.6 weeks in July. This is mission accomplished?
Peter Morici, an economist and professor of international business at the University of Maryland, stated "more workers will be compelled to accept positions without health benefits, and benefit packages, generally, will continue to deteriorate."
The survey by Challenger, Gray, & Christmas found employers announced plans to cut 74,150 jobs in August, up 6.6% from July's announced layoffs. At the same time, employers announced plans to hire 132,105 workers in the weeks and months ahead, of which 83,450 would come from retailers and reflect the upcoming holiday season. They stated "many of those jobs may disappear by February." Importantly, Challenger added "there probably has never been a time when companies were this cautious to add workers in a recovery. There is undoubtedly a lot of concern about the fragile state of this recovery."
Herbert Hoover on Sept. 17, 1928: "This recovery and this stability are no accident. It has not been achieved by luck. Were it not for sound governmental policies and wise leadership, employment conditions in America would be similar to those existing in many other parts of the world."
George W. Bush on Aug. 9, 2004: "Let me put it to you bluntly. In a changing world, we want more people to have control over your own life."
George W. Bush on Feb. 19, 2004: "Recession means that people's incomes, at the employer level, are going down, basically, relative to costs, people are getting laid off." Hoover could not have said it better.
Since invading Iraq in March 2003, there have been a total of 1,002 military deaths. Every evening Bush and Cheney go to bed, I hope they see blood on their hands. They are personally responsible for sending our troops into harms way and invading Iraq and for "misspeaking" about the WMD. They went to the Congress for authorization to invade, and that authorization should never have taken place without a strong coalition of foreign nations accompanied by superior intelligence. In addition to the fallen 1,002, which grows each day, we have almost 7,000 wounded troops, and that does not include those impacted psychologically by the horrors of war. To re-elect these two would be to risk nightmares from blood on your hands. That's what your vote will get you.
Delta Airlines will cut up to 10% of their workforce or 7,000 jobs in 18 months in an effort to avoid filing for bankruptcy.
Ford will end the second of its two production shifts at its suburban St. Louis assembly plant effective Jan. 3, 2005. A total of 800 jobs will be eliminated.
Alcan will close its Mays Landing, N.J. plastics manufacturing plant on October 3 and 74 jobs will be cut.
Missouri endured the worst job losses in the nation in July as the state lost 51,800 positions or 1.9% of its seasonally adjusted non-farm payroll. In St. Louis the unemployment rate rose to 6.5%. If you lived in Missouri, would you vote for Bush?
Over the past 12 months, the total non-farm payrolls in Texas and Colorado have risen only 1.1%. That is certainly less than had been anticipated by the Bush Administration.
Mark Zandi: "The job market is still very weak. Employers have the upper hand in any negotiation with employees, and that's weighing on compensation, particularly take home pay."
In August, the average duration of unemployment without work was 19 weeks, compared with 18.6 weeks in July. This is mission accomplished?
Peter Morici, an economist and professor of international business at the University of Maryland, stated "more workers will be compelled to accept positions without health benefits, and benefit packages, generally, will continue to deteriorate."
The survey by Challenger, Gray, & Christmas found employers announced plans to cut 74,150 jobs in August, up 6.6% from July's announced layoffs. At the same time, employers announced plans to hire 132,105 workers in the weeks and months ahead, of which 83,450 would come from retailers and reflect the upcoming holiday season. They stated "many of those jobs may disappear by February." Importantly, Challenger added "there probably has never been a time when companies were this cautious to add workers in a recovery. There is undoubtedly a lot of concern about the fragile state of this recovery."
Herbert Hoover on Sept. 17, 1928: "This recovery and this stability are no accident. It has not been achieved by luck. Were it not for sound governmental policies and wise leadership, employment conditions in America would be similar to those existing in many other parts of the world."
George W. Bush on Aug. 9, 2004: "Let me put it to you bluntly. In a changing world, we want more people to have control over your own life."
George W. Bush on Feb. 19, 2004: "Recession means that people's incomes, at the employer level, are going down, basically, relative to costs, people are getting laid off." Hoover could not have said it better.
Since invading Iraq in March 2003, there have been a total of 1,002 military deaths. Every evening Bush and Cheney go to bed, I hope they see blood on their hands. They are personally responsible for sending our troops into harms way and invading Iraq and for "misspeaking" about the WMD. They went to the Congress for authorization to invade, and that authorization should never have taken place without a strong coalition of foreign nations accompanied by superior intelligence. In addition to the fallen 1,002, which grows each day, we have almost 7,000 wounded troops, and that does not include those impacted psychologically by the horrors of war. To re-elect these two would be to risk nightmares from blood on your hands. That's what your vote will get you.
Delta Airlines will cut up to 10% of their workforce or 7,000 jobs in 18 months in an effort to avoid filing for bankruptcy.
Ford will end the second of its two production shifts at its suburban St. Louis assembly plant effective Jan. 3, 2005. A total of 800 jobs will be eliminated.
Alcan will close its Mays Landing, N.J. plastics manufacturing plant on October 3 and 74 jobs will be cut.
9/7/04 The "Joyless Recovery"
John Challenger: "The voters will draw their conclusion about the overall strength in the economy based almost entirely on whether they and/or their neighbors will be out of work."
Grand Vehicle Works, which makes bodies for walk-in trucks such as the ones UPS uses, will close its Union City, Indiana plant in October. About 120 people will be impacted.
John Silvia, chief economist for Wachovia Securities: "When we want rugs, curtains, carpets, and textiles, we go to the store to buy them, and in the past they would come from NC, SC, and GA. But now they come from China. We have to figure out how to get people back to work in a globally competitive environment."
Alitalia to lay off 5,000 workers.
According to the Census Bureau, in 1969, Michigan's median income was 18% above the national average. By 2003, the figure was less than 4% above the national average and still dropping. Over the past 12 onths, Michigan's average weekly wages grew less than 1% while inflation has been running over twice that rate. The state's 6.8% unemployment rate in July ties it with Oregon for the nation's second worst behind Alaska.
It is customary for paychecks to grow as an economy grows after a recession. It has been three years since the recession ended, and under Bush, this has not taken place and that's one reason some economists call this a "joyless economy." Only a masochist would want another four joyless years.
Arizona Republic's E.J. Montini: "Only 20% of all eligible voters are expected to cast a ballot in our city... almost 3,000 were killed in N.Y., Washington D.C., and Pennsylvania, and 80% of us have nothing to say about who will run the show. More than 1,000 U.S. service members have died in Afghanistan and Iraq, where we hope to spread democracy, while democracy reaches one in five of us here."
John Challenger: "The voters will draw their conclusion about the overall strength in the economy based almost entirely on whether they and/or their neighbors will be out of work."
Grand Vehicle Works, which makes bodies for walk-in trucks such as the ones UPS uses, will close its Union City, Indiana plant in October. About 120 people will be impacted.
John Silvia, chief economist for Wachovia Securities: "When we want rugs, curtains, carpets, and textiles, we go to the store to buy them, and in the past they would come from NC, SC, and GA. But now they come from China. We have to figure out how to get people back to work in a globally competitive environment."
Alitalia to lay off 5,000 workers.
According to the Census Bureau, in 1969, Michigan's median income was 18% above the national average. By 2003, the figure was less than 4% above the national average and still dropping. Over the past 12 onths, Michigan's average weekly wages grew less than 1% while inflation has been running over twice that rate. The state's 6.8% unemployment rate in July ties it with Oregon for the nation's second worst behind Alaska.
It is customary for paychecks to grow as an economy grows after a recession. It has been three years since the recession ended, and under Bush, this has not taken place and that's one reason some economists call this a "joyless economy." Only a masochist would want another four joyless years.
Arizona Republic's E.J. Montini: "Only 20% of all eligible voters are expected to cast a ballot in our city... almost 3,000 were killed in N.Y., Washington D.C., and Pennsylvania, and 80% of us have nothing to say about who will run the show. More than 1,000 U.S. service members have died in Afghanistan and Iraq, where we hope to spread democracy, while democracy reaches one in five of us here."
Monday, September 06, 2004
9/6/04 The Case Of The Disappearing Consumer
You are probably thinking I'm either joking or being a bit dramatic. Actually, I'm quite serious. I make a point of studying Wal-Mart. I've been doing it for three decades. Everyone knows the consumer is feeling pinched from higher gasoline prices and a challenging, at best, job market. Everyone knows that, according to the BLS, 80% of wages for non-farm workers fell in the past three months. It's not just that sales at Wal-Mart continue to be disappointing but the recent trend has been strength in food and health and beauty products rather than general merchandise, and the latter takes up the majority of the floor space in their stores. In fact, the sale of general merchandise was down in August at Wal-Mart. When was the last time this occurred? I couldn't begin to tell you. Obviously, it was a very long time ago. Economists will focus on the latest jobs report. In my view, they are missing the real story, and that can be found at Wal-Mart.
Ford is delaying shipment of three new vehicles. Ford Division dealer pretax profits are down 8% through July.
A car bomb near Falluja killed 7 American marines. According to the Pentagon, the death toll for U.S. personnel has reached at least 985 since we invaded Iraq.
Stephen Klineberg, a Rice University sociology professor and director of the Houston Area Survey for 23 years on the economy and social issues: "The old blue-collar path to economic security has disappeared. We've lost all those blue-collar jobs where you can leave high school with a diploma and earn a middle-class wage. Never again. We have a two-tiered emerging hourglass economy. There really are two Americas out there."
In July 2004, Pennsylvania had 81,300 fewer jobs than when the recession began in March 2001. The state's job creation performance after the 2001 recession is the fourth worst since WW II. In July 2004, the state had 151,600 fewer manufacturing jobs than when the recession started, an 18% loss. The average wage of production workers was lower in July 2004 than in any of the previous three years. It is a dollar lower than the national average. Employment in the state's high-wage industries has fallen 5.6% over the last three years while employment in low-wage industries has grown by 2.9%. If you lived in Pennsylvania, would you vote for Bush?
According to the BLS, ex-factory workers are the least likely of all workers to find new full-time jobs, and a third of them will eventually accept work for less pay, often 20% less, with less generous benefits. Over the last five years, about 210,000 Michigan factory workers have lost their jobs. Do you think they'll be voting for Bush? Three years ago, Michigan Works, the state agency that helps people find jobs, put 69 different factory jobs on its "declining occupation list," which is about half of the 140 careers that are waning in Michigan.
Herbert Hoover: "About the time we think we can make ends meet, somebody moves the ends."
Bush: "I know how hard it is to put food on your family." Hoover couldn't have said it better.
You are probably thinking I'm either joking or being a bit dramatic. Actually, I'm quite serious. I make a point of studying Wal-Mart. I've been doing it for three decades. Everyone knows the consumer is feeling pinched from higher gasoline prices and a challenging, at best, job market. Everyone knows that, according to the BLS, 80% of wages for non-farm workers fell in the past three months. It's not just that sales at Wal-Mart continue to be disappointing but the recent trend has been strength in food and health and beauty products rather than general merchandise, and the latter takes up the majority of the floor space in their stores. In fact, the sale of general merchandise was down in August at Wal-Mart. When was the last time this occurred? I couldn't begin to tell you. Obviously, it was a very long time ago. Economists will focus on the latest jobs report. In my view, they are missing the real story, and that can be found at Wal-Mart.
Ford is delaying shipment of three new vehicles. Ford Division dealer pretax profits are down 8% through July.
A car bomb near Falluja killed 7 American marines. According to the Pentagon, the death toll for U.S. personnel has reached at least 985 since we invaded Iraq.
Stephen Klineberg, a Rice University sociology professor and director of the Houston Area Survey for 23 years on the economy and social issues: "The old blue-collar path to economic security has disappeared. We've lost all those blue-collar jobs where you can leave high school with a diploma and earn a middle-class wage. Never again. We have a two-tiered emerging hourglass economy. There really are two Americas out there."
In July 2004, Pennsylvania had 81,300 fewer jobs than when the recession began in March 2001. The state's job creation performance after the 2001 recession is the fourth worst since WW II. In July 2004, the state had 151,600 fewer manufacturing jobs than when the recession started, an 18% loss. The average wage of production workers was lower in July 2004 than in any of the previous three years. It is a dollar lower than the national average. Employment in the state's high-wage industries has fallen 5.6% over the last three years while employment in low-wage industries has grown by 2.9%. If you lived in Pennsylvania, would you vote for Bush?
According to the BLS, ex-factory workers are the least likely of all workers to find new full-time jobs, and a third of them will eventually accept work for less pay, often 20% less, with less generous benefits. Over the last five years, about 210,000 Michigan factory workers have lost their jobs. Do you think they'll be voting for Bush? Three years ago, Michigan Works, the state agency that helps people find jobs, put 69 different factory jobs on its "declining occupation list," which is about half of the 140 careers that are waning in Michigan.
Herbert Hoover: "About the time we think we can make ends meet, somebody moves the ends."
Bush: "I know how hard it is to put food on your family." Hoover couldn't have said it better.
Saturday, September 04, 2004
9/5/04 Herbert Hoover Is Bush's Ghost Speech WriterAugust 11, 1928 in Hoover's speech accepting the Republican nomination: "Unemployment in the sense of distress is widely disappearing...We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing among us."October 28, 1928 Herbert Hoover's Campaign Address in Madison Square Garden: "Prosperity is no idle expression. It is a job for every worker, it is the safety and safeguard of every business and every home. A continuation of the Republican party is fundamentally necessary to the future advancement of this progress and to the further building of this prosperity."During Hoover's prseidency, there were productivity gains but these were not accompanied by proportionate gains in purchasing power. Wage gains did not keep up with gains in profits. Income inequality grew wider. As the rich got richer, speculation followed. Many paycheck-to-paycheck workers purchased goods on the installment plan, and their buying exceeded their ability to pay in many cases. A downturn developed in the auto industry, durable goods, and construction. The bubble finally burst.If you lived in Ohio, and your state had lost 230,000 jobs since Bush was elected, would you vote for him?If the population is growing at the rate of 220,000 per month, and 144,000 jobs supposedly are created in August, by definition the labor participation rate will fall.It would be wise for investors to consider the circumstances at Intel, and to go to school, as it were, on other sectors in the economy. My main point is focusing on the ability of companies to manage excess production capacity with the knowledge that profit margins could be hurt. In the case of Intel we're talking a couple of percentage points. We should take a closer look, for example, at the domestic auto industry. Production cutbacks have been announced by GM and Ford. Are more to follow? What will the impact of less production combined with average vehicle incentives of $4,200 mean to profit margins? What other industries are dependent on auto production? How will their margins be impacted? If back-to-school sales are disappointing, and wages and benefits continue to trail inflation, will upcoming holiday sales also be below expectations? We are an economy dependent on the consumer. Where will the money come from to buy large ticket items, such as, laptop computers?Instead of driving 60mph on the investor highway, one might consider downshifting in order to be more in synch with the economic slowdown. Jamming on the brakes is quite unnecessary. Anticipate the caution lights ahead. Plenty of companies will be providing warnings on quarterly revenues and earnings. If the great ones like Intel and Wal-Mart are running into headwinds, how about the also-rans? There will always be plenty of money managers who will tell you that this time it is different. They will tell you the poorhouse is a thing of the past. As long as the spectre of margin calls exists, nothing has changed. We only need to fear complacency and the words of the politicians born with silver spoons in their mouths and their heads up their butts.Linda Davies: "The job of a derivatives trader is like that of a bookie once removed, taking bets on people making bets."Walter Dolde: "A common misconception about risk management in some quarters is that the use of derivative securities constitutes speculation- that is, the addition of financial risk to the business risk of a firm's operations. Some think that condom use increases risk."Since 1994, federal law has required government departments to make financial audits...the Defense Department has never complied with this requirement. Its records are in such disarray that they cannot be audited. If government officials are violating federal law, then bring a court action against them.Henry Hazlitt: "The 'private sector' of the economy is, in fact, the voluntary sector, and... the 'public sector' is, in fact, the coercive sector."September 4, 2004 Bush speaking at the Erie Veterans Memorial Stadium: "Over the next four years we'll continue to work hard to reform systems that need to be changed so that American people can realize their dreams. We'll spread ownership and opportunity to every corner of this country." Herbert Hoover could not have said it better.Alexander Hamilton: "The violent destruction of life and prosperity incident to war, the continual effort and alarm attendant on a state of continual danger, will compel nations the most attached to liberty to resort for repose and security to institutions which have a tendency to destroy their civil and political rights. To be more safe, they at length become willing to run the risk of being less free. " That is a risk I am not willing to take, and certainly not for another four years.
Friday, September 03, 2004
9/4/04 Failed Policies Of The Present
Before proceeding with an analysis describing where I went wrong with my payrolls projection, I would like to indulge readers of this blog with some observations. The Labor Dept states, that since January, industries in the lowest 20% for annual salaries have created 477,000 jobs and industries in the top 20% for pay have exhibited zero job growth. In addition, those laid off and then finding another job, report that 57% are earning less than before. Between 2002 and 2012, the Labor Dept expects the economy to create more than 7.5 million jobs; however, almost 6 million of those new jobs will be low-wage jobs. Just 38% of low-wage workers receive health insurance from their employer compared to 69% of higher-wage workers. Bush promised that his economic plan would create 5.5 million new jobs by the end of 2004. He will wind up 4 million jobs short of that figure. Voters in November need to hold this country’s chief executive accountable. Bush offers promises but his execution is a miserable failure. An example of the job market and employment figures is the Bank of America. They laid off 1,365 former FleetBoston workers in New England and hired 600 part-time workers. The result is a reported net loss of 765 jobs. It’s important to distinguish between full-time and part-time as well as low-paying and higher-paying jobs. Yesterday I mentioned Intel and their lowered forecast for this quarter. Under the radar screen, Microsoft cut 93 positions in their windows server area. The jobs are not being outsourced and are not being replaced on their campus in India. In addition, the company is not hiring contractors but rather only individuals for project positions which last a month to six weeks. Cypress Semiconductor lowered its third quarter guidance due to ongoing softness in customer orders and the specific slowdown in the networking and wireless infrastructure business. I should mention that Florida is the second largest market behind California for new cars. Starting in January, for 39 million Americans, Medicare premiums will increase over 17%.
The Arizona Republic’s Robert Robb: “The Medicare prescription drug plan he signed made its long-term finances less secure, not more. And Medicare reform didn’t make it into Bush’s second-term agenda... Bush says his reforms move towards empowering people and giving them more choices... but will Bush truly fight for these reforms... on this front there’s reason to doubt his resolve.”
Roger Altman: “Over the past three months, the percentage of Americans who are working has fallen.” On that note, the Household Survey, which Bush heralded after the July jobs report, indicated a drop of 152,000 in the labor force in August.
The ISM Non-Mfg index in August fell to 58.2% from 64.8% in July. New orders fell to 58.6% from 66.4%, the lowest since June 2003.
The Census Bureau estimates that the U.S. population is growing this year by a rate of about 220,000 per month.
American Greetings management stated they would either close their Plus Mark plant in Franklin, Tenn. or in Greeneville. Plus Mark is a major manufacturer of gift wrap and specialty printing products. The Greeneville plant employs 850 and Franklin 450. Anthem Blue Cross & Blue Shield of Maine is eliminating 70 positions. Philips Medical is cutting 150 jobs at its Bothell, WA site.
How did I underestimate 95,000 jobs being created in August? It was part carelessness. I forgot that 28,000 auto workers returned from annual retooling shutdowns in July. In other manufacturing areas there was little change, as I had previously mentioned, and factory hours and overtime were flat. I had mistakenly thought about 12,000 jobs would be lost due to Hurricane Charley. That was a foolish mistake. The hurricane hit late in the reporting period for most of the survey's respondents. For the storm to have affected payroll employment, people would have had to have been off work for an entire pay period and not paid for the time missed. That leaves 55,000 unexplained jobs. I did not expect 20,000 additions in social assistance. That area had not been growing recently. I ignored rental and leasing and that was 7,000. I underestimated the financial positions by 12,000 hires, and figured that there would not be gains in temp work but 10,000 jobs were created there. I had figured on a pick up of 36,000 healthcare positions and the final count was 42,000.
Importantly, as I had thought, the average work week remained unchanged at 33.8 hours, average hourly earnings only rose by 5 cents, and the labor force participation edged down over the month and the rate has been at or near 66% since late 2003. Finally, there were 534,000 discouraged workers.
Since Bush gave the order to invade Iraq, 976 U.S. troops have been killed in that country while another 6,916 have been wounded, according to the Pentagon.
Thomas Sowell: "Many of the 'abuses' of today were the 'reforms' of yesterday."
According to the monthly Sypherion Employment Report, 48% of respondents believe that fewer jobs are available and 37% believe the economy is getting weaker.
A monthly survey of business leaders by the Santa Clara University Business Index found a sharp drop in business confidence in the Silicon Valley in August and observed "their pessimism about the future casts doubt in the idea that the slowdown is necessarily temporary."
Before proceeding with an analysis describing where I went wrong with my payrolls projection, I would like to indulge readers of this blog with some observations. The Labor Dept states, that since January, industries in the lowest 20% for annual salaries have created 477,000 jobs and industries in the top 20% for pay have exhibited zero job growth. In addition, those laid off and then finding another job, report that 57% are earning less than before. Between 2002 and 2012, the Labor Dept expects the economy to create more than 7.5 million jobs; however, almost 6 million of those new jobs will be low-wage jobs. Just 38% of low-wage workers receive health insurance from their employer compared to 69% of higher-wage workers. Bush promised that his economic plan would create 5.5 million new jobs by the end of 2004. He will wind up 4 million jobs short of that figure. Voters in November need to hold this country’s chief executive accountable. Bush offers promises but his execution is a miserable failure. An example of the job market and employment figures is the Bank of America. They laid off 1,365 former FleetBoston workers in New England and hired 600 part-time workers. The result is a reported net loss of 765 jobs. It’s important to distinguish between full-time and part-time as well as low-paying and higher-paying jobs. Yesterday I mentioned Intel and their lowered forecast for this quarter. Under the radar screen, Microsoft cut 93 positions in their windows server area. The jobs are not being outsourced and are not being replaced on their campus in India. In addition, the company is not hiring contractors but rather only individuals for project positions which last a month to six weeks. Cypress Semiconductor lowered its third quarter guidance due to ongoing softness in customer orders and the specific slowdown in the networking and wireless infrastructure business. I should mention that Florida is the second largest market behind California for new cars. Starting in January, for 39 million Americans, Medicare premiums will increase over 17%.
The Arizona Republic’s Robert Robb: “The Medicare prescription drug plan he signed made its long-term finances less secure, not more. And Medicare reform didn’t make it into Bush’s second-term agenda... Bush says his reforms move towards empowering people and giving them more choices... but will Bush truly fight for these reforms... on this front there’s reason to doubt his resolve.”
Roger Altman: “Over the past three months, the percentage of Americans who are working has fallen.” On that note, the Household Survey, which Bush heralded after the July jobs report, indicated a drop of 152,000 in the labor force in August.
The ISM Non-Mfg index in August fell to 58.2% from 64.8% in July. New orders fell to 58.6% from 66.4%, the lowest since June 2003.
The Census Bureau estimates that the U.S. population is growing this year by a rate of about 220,000 per month.
American Greetings management stated they would either close their Plus Mark plant in Franklin, Tenn. or in Greeneville. Plus Mark is a major manufacturer of gift wrap and specialty printing products. The Greeneville plant employs 850 and Franklin 450. Anthem Blue Cross & Blue Shield of Maine is eliminating 70 positions. Philips Medical is cutting 150 jobs at its Bothell, WA site.
How did I underestimate 95,000 jobs being created in August? It was part carelessness. I forgot that 28,000 auto workers returned from annual retooling shutdowns in July. In other manufacturing areas there was little change, as I had previously mentioned, and factory hours and overtime were flat. I had mistakenly thought about 12,000 jobs would be lost due to Hurricane Charley. That was a foolish mistake. The hurricane hit late in the reporting period for most of the survey's respondents. For the storm to have affected payroll employment, people would have had to have been off work for an entire pay period and not paid for the time missed. That leaves 55,000 unexplained jobs. I did not expect 20,000 additions in social assistance. That area had not been growing recently. I ignored rental and leasing and that was 7,000. I underestimated the financial positions by 12,000 hires, and figured that there would not be gains in temp work but 10,000 jobs were created there. I had figured on a pick up of 36,000 healthcare positions and the final count was 42,000.
Importantly, as I had thought, the average work week remained unchanged at 33.8 hours, average hourly earnings only rose by 5 cents, and the labor force participation edged down over the month and the rate has been at or near 66% since late 2003. Finally, there were 534,000 discouraged workers.
Since Bush gave the order to invade Iraq, 976 U.S. troops have been killed in that country while another 6,916 have been wounded, according to the Pentagon.
Thomas Sowell: "Many of the 'abuses' of today were the 'reforms' of yesterday."
According to the monthly Sypherion Employment Report, 48% of respondents believe that fewer jobs are available and 37% believe the economy is getting weaker.
A monthly survey of business leaders by the Santa Clara University Business Index found a sharp drop in business confidence in the Silicon Valley in August and observed "their pessimism about the future casts doubt in the idea that the slowdown is necessarily temporary."
Thursday, September 02, 2004
9/3/04 Down For The Count
This is being written prior to the release of the non-farm payrolls report. Few know that I have owned a recruiting company, and that experience might give me a small leg up when analyzing employment numbers and projections. Early Thursday morning the Monster August Employment Index was posted on the Monster website. Traders jumped on that number and stocks were off to the races while bond prices tanked. Their August index rose to 145 from July's 134. In July there had been a slight dip. This index does not have a long history, but that doesn't prevent hedge funds from making a straight line between the index and non-farm payroll gains. In other words, the index cemented the forecast for job gains of at least 150,000 in August. Unfortunately, many have short memories. This same index increased from May's 128 to June's 136, and non-farm payrolls were quite disappointing in June. I know a lot of folks hope my projection is way wrong. I don't believe the number will be negative, but I do believe the gains will be less than 50,000.
Yesterday there was a great deal of interesting information. Target's same-store sales for August rose 1.8%. Wal-Mart reduced their estimate for Sept. comp sales to a range of 2 to 4%. With Frances on the way that estimate could be suspect. Intel reduced its revenue projections for the quarter as well as their profit margins and the stock dropped to a 15-month low.
Initial first-time jobless claims in the week ending August 28 rose 19,000 to 362,000. Hurricane Charley accounted for a "little less than half" of the increase, according to the Labor Dept.
According to the BLS, real hourly compensation fell 1% in the second quarter of 2004, after falling 0.8% in the first quarter of this year. The second quarter decline was the largest since hourly compensation fell 1.6% in the second quarter of 2000. I don't envision improvement for this third quarter. In my view, real hourly compensation declines will determine this election.
U.S. second quarter productivity was revised downward from 2.9% to 2.5%.
PaylessShoeSource will sell as well as close some stores and that will cause layoffs. Continental Air will cut about 425 management and clerical jobs. Ford may close or mothball production at its Land Rover plant and 8,000 wrkers will be impacted.
According to the Census Bureau, property taxes have had a 5.7% annual increase for each of the last five years.
Ex civilian aircraft, July factory orders fell 0.4%
Unit labor costs were revised downward to 1.8% from 1.9%.
In sum, except for special cases, I see no reason for companies to hire permanent workers. Top line growth is suspect and clearly grinding to a halt. Productivity gains are on the decline. Benefit costs are rising and create caution in the hiring process. The Fed talks a good growth game but the picture I see has a far different look. With the plant closings on the rise, I see a very poor employment number for September- worse than August's. Hurricane Frances will only add to the misery index. I pray for the well-being of those in the area, and that includes my Dad. I hope this holiday weekend is an enjoyable one for all and a safe one.
This is being written prior to the release of the non-farm payrolls report. Few know that I have owned a recruiting company, and that experience might give me a small leg up when analyzing employment numbers and projections. Early Thursday morning the Monster August Employment Index was posted on the Monster website. Traders jumped on that number and stocks were off to the races while bond prices tanked. Their August index rose to 145 from July's 134. In July there had been a slight dip. This index does not have a long history, but that doesn't prevent hedge funds from making a straight line between the index and non-farm payroll gains. In other words, the index cemented the forecast for job gains of at least 150,000 in August. Unfortunately, many have short memories. This same index increased from May's 128 to June's 136, and non-farm payrolls were quite disappointing in June. I know a lot of folks hope my projection is way wrong. I don't believe the number will be negative, but I do believe the gains will be less than 50,000.
Yesterday there was a great deal of interesting information. Target's same-store sales for August rose 1.8%. Wal-Mart reduced their estimate for Sept. comp sales to a range of 2 to 4%. With Frances on the way that estimate could be suspect. Intel reduced its revenue projections for the quarter as well as their profit margins and the stock dropped to a 15-month low.
Initial first-time jobless claims in the week ending August 28 rose 19,000 to 362,000. Hurricane Charley accounted for a "little less than half" of the increase, according to the Labor Dept.
According to the BLS, real hourly compensation fell 1% in the second quarter of 2004, after falling 0.8% in the first quarter of this year. The second quarter decline was the largest since hourly compensation fell 1.6% in the second quarter of 2000. I don't envision improvement for this third quarter. In my view, real hourly compensation declines will determine this election.
U.S. second quarter productivity was revised downward from 2.9% to 2.5%.
PaylessShoeSource will sell as well as close some stores and that will cause layoffs. Continental Air will cut about 425 management and clerical jobs. Ford may close or mothball production at its Land Rover plant and 8,000 wrkers will be impacted.
According to the Census Bureau, property taxes have had a 5.7% annual increase for each of the last five years.
Ex civilian aircraft, July factory orders fell 0.4%
Unit labor costs were revised downward to 1.8% from 1.9%.
In sum, except for special cases, I see no reason for companies to hire permanent workers. Top line growth is suspect and clearly grinding to a halt. Productivity gains are on the decline. Benefit costs are rising and create caution in the hiring process. The Fed talks a good growth game but the picture I see has a far different look. With the plant closings on the rise, I see a very poor employment number for September- worse than August's. Hurricane Frances will only add to the misery index. I pray for the well-being of those in the area, and that includes my Dad. I hope this holiday weekend is an enjoyable one for all and a safe one.
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