10/19/04 Unworthy Of A Wartime President
According to Rreuters, Fed Board Governor Mark Olson stated yesterday that high oil prices were starting to slow U.S. economic growth. Tell that to Greenspan.
Ford’s auto business had a third quarter pre-tax loss of $609 million and their market share dropped to 19.7%.
In the third quarter, according to Challenger, Gray, & Christmas, announced job cuts in the technology sector soared 60% to 54,701, the highest figure in almost a year. According to John Challenger, increased job cutting is not being offset by increased hiring.
According to Robert Half Technology, only 9% of 1400 CIOs surveyed plan to expand their IT staffs in the fourth quarter.
China’s passenger car sales in September fell by more than 2%. It was the fifth straight monthly decline.
According to Editor & Publisher, Kerry leads Bush in newspaper endorsements by a margin of 45 to 30.
Foreign demand for U.S. assets declined in August to the lowest point in 2004.
U.S. chains’ weekly same-store sales were down 0.2%.
The cost of living adjustment for the 47+ million on Social Security will be about 2.5% in January. Meanwhile, Medicare premiums will increase by a record amount in dollar terms of $11.60 per month starting in January, compared with an increase of $7.90 per month this year.
IBM’s CFO: "About 45% of our revenue, and more than half of our profit, comes from annuity-like businesses, such as, long term service contracts, monthly-license charge software, maintenance, and financing contracts…revenue for Global Services is about half of IBM’s revenue…year to date, IBM has spent $4.4 billion to repurchase 47.8 million shares. Through, September, $874 million was paid out in dividends to shareholders. Debt, including Global Financing, totals $22 billion. The tax rate declined from 30% to 28.9% and pre-tax margins from 11.8% to 10.8%."
Texas Instruments stated that, primarily due to an increase in the U.S. tax benefit for export sales, the company’s effective tax rate was reduced to 21%. On September 8, the company estimated the tax rate at 26%. The fourth quarter tax rate is projected at 21%.
Charles Showalter, president of the American Federation of Government Employees National Homeland Security Council: "If President Bush believes that the U.S. is safer today than it was on September 11, he would be very surprised to learn that almost half of our members- front-line employees in the nation’s war on terror- would disagree. He might also be surprised to learn that 64% of those border security professionals believe that they have not been given the tools, training, equipment or support they need to prevent terrorists from entering the country. It is time for this Administration to wake up to reality. We live in a dangerous world and the President has talked a lot, but done very little to make it any safer. Since May, the Bureau of Customs and Border Protection has operated under a hiring freeze, due to mismanagement of funds. The legislation the President has praised in his speech today reduces spending on inspections to $20 million below what he requested."
John Gage, national president of the American Federation of Government Employees, represents some 20,000 employees of the Department of Homeland Security. He stated "on our nation’s borders, officers work with faulty equipment and expired body armor even as they face ever more violence in their daily work…the President takes credit for creating the Department of Homeland Security, which he opposed and held up for months. He congratulates himself for new funds allocated to the Transportation Security Administration, but neglects to note that even as he spoke, his allies are trying to return airport security to the hands of private contractors- just as it was during the attacks of September 11, 2001. Talk about a ‘September 10th attitude.’ The people of New Jersey suffered dearly on September 11th, losing 700 of their citizens in those brutal attacks. For Mr. Bush to exploit their grief by misrepresenting his record is unworthy of a wartime president."
Army LT. Gen. Ricardo S. Sanchez, the top U.S. commander in Iraq, complained last winter about a poor supply situation that threatened the Army troops’ ability to fight. Units were waiting an average of 40 days for critical spare parts, almost three times the Army’s average of 14 days. He wrote about the need to protective inserts to upgrade 36,000 sets of body armor, but the delivery had been twice postponed in the month prior to his writing. Sanchez concluded "I cannot sustain readiness without Army-level intervention…When America puts our troops in combat, I believe they deserve the best training, the best equipment, the full support of our government."
Bush’s performance record is unworthy of a wartime president.
Monday, October 18, 2004
10/18/04 We Had A Theme
A veteran State Dept officer directly involved in Iraq policy stated "we didn't go in with a plan (postwar). We went in with a theory." An Army War College report completed in February 2003, a month before the invasion, stated "the possibility of the United States winning the war and losing the peace in Iraq is real and serious." Douglas Feith, the number 3 official in the State Dept, remarked "we had a theme in our minds, a strategic idea, of liberation rather than occupation, giving them (Iraqis) more authority even at the expense of having things done with greater efficiency by coalition forces." It's no wonder that our invasion has not made the world safer. Postwar themes do not make for careful and effective postwar planning. As we have seen, they make for chaos and killing and maiming.
Presidential election voting begins today in Florida and Colorado. The Miami Herald is endorsing Kerry. The Tampa Tribune won't back either candidate. The Denver papers are split in their support.
According to the Center on Budget and Policy Priorities and the Urban Institute-Brookings Institution Tax Policy Center, households comprising the middle 20% of the income scale receive only 9%, or an average savings of $162, of the recently-passed tax cuts. Households with incomes ranging from $200,000 to $500,000 will receive benefits amounting to $2,390. Meanwhile, the withholding tax ceiling is drawn equally from the same two income groups. That is not a level playing field.
Pete Peterson, former secretary of commerce: "The ultimate test of a moral society is the kind of world it leaves to its children. And so I think about the concept that we're slipping our own kids and grandkids a check for our free lunch, I say we're failing the moral test."
Leonard Pitts Jr., Miami Herald syndicated columnist, writing about this presidential election: "Who cares if rules are broken, who cares if ethics are bent, who cares if lies are told, so long as it helps my guy. Truth is, we should all care. And we should all be appalled at the malleable morality and situational principles of those who do not."
A senior Bush official was reported as telling Ron Suskind that "we're the empire now, and when we act, we create our own reality. And while you're studying that reality- judiciously, as you will- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to study just what we do." Hopefully, the electorate will have something to say about this "empire" and this "reality" and these "actors." They are malignant cancers, and I have studied that subject matter judiciously.
According to a study released today by the Pew Hispanic Center, the wealth gap between Hispanics and whites is growing. In addition, there is a growing wealth gap between blacks and whites. Early on in a recession, the unemployment rate for blacks and Hispanics rises, and those two groups recover late from the recession. This is precisely what took place in the 2001 recession that was proclaimed over in November 2001.
Mark Twain: "If we would learn what the human race really is at bottom, we need only observe it in election times."
A veteran State Dept officer directly involved in Iraq policy stated "we didn't go in with a plan (postwar). We went in with a theory." An Army War College report completed in February 2003, a month before the invasion, stated "the possibility of the United States winning the war and losing the peace in Iraq is real and serious." Douglas Feith, the number 3 official in the State Dept, remarked "we had a theme in our minds, a strategic idea, of liberation rather than occupation, giving them (Iraqis) more authority even at the expense of having things done with greater efficiency by coalition forces." It's no wonder that our invasion has not made the world safer. Postwar themes do not make for careful and effective postwar planning. As we have seen, they make for chaos and killing and maiming.
Presidential election voting begins today in Florida and Colorado. The Miami Herald is endorsing Kerry. The Tampa Tribune won't back either candidate. The Denver papers are split in their support.
According to the Center on Budget and Policy Priorities and the Urban Institute-Brookings Institution Tax Policy Center, households comprising the middle 20% of the income scale receive only 9%, or an average savings of $162, of the recently-passed tax cuts. Households with incomes ranging from $200,000 to $500,000 will receive benefits amounting to $2,390. Meanwhile, the withholding tax ceiling is drawn equally from the same two income groups. That is not a level playing field.
Pete Peterson, former secretary of commerce: "The ultimate test of a moral society is the kind of world it leaves to its children. And so I think about the concept that we're slipping our own kids and grandkids a check for our free lunch, I say we're failing the moral test."
Leonard Pitts Jr., Miami Herald syndicated columnist, writing about this presidential election: "Who cares if rules are broken, who cares if ethics are bent, who cares if lies are told, so long as it helps my guy. Truth is, we should all care. And we should all be appalled at the malleable morality and situational principles of those who do not."
A senior Bush official was reported as telling Ron Suskind that "we're the empire now, and when we act, we create our own reality. And while you're studying that reality- judiciously, as you will- we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors...and you, all of you, will be left to study just what we do." Hopefully, the electorate will have something to say about this "empire" and this "reality" and these "actors." They are malignant cancers, and I have studied that subject matter judiciously.
According to a study released today by the Pew Hispanic Center, the wealth gap between Hispanics and whites is growing. In addition, there is a growing wealth gap between blacks and whites. Early on in a recession, the unemployment rate for blacks and Hispanics rises, and those two groups recover late from the recession. This is precisely what took place in the 2001 recession that was proclaimed over in November 2001.
Mark Twain: "If we would learn what the human race really is at bottom, we need only observe it in election times."
Sunday, October 17, 2004
10/17/04 A Very Different Election
In 2000, nearly 49% of voting-age Americans did not cast ballots. Starting tomorrow, voting will begin. That's right. Not November 2. The final returns will be Nov. 2. In my view, the polls are way off the mark. For example, Latinos compose a quarter of Arizona's population. There has been an enormous number of newly registered Hispanic voters- in the Southwest, Colorado, and Florida. In addition, in Arizona, voter registration is up sharply for Native Americans. We are about to witness a much higher voter turnout. In Florida, voting begins tomorrow and ends on Nov. 2. Once you vote, the vote cannot be changed. It's not like a proxy card in a corporate contest.
Since 1972, studies have shown that participation among voters younger than age 26 has fallen by 13%. According to the U.S. Census Bureau, about 24 million people ages 18 to 24 are eligible to vote this year. Results from the New Voters Project indicate that hundreds of thousands of newly registered youth voters have occurred. It is part of the changing voter landscape.
Voter registration is up for both single and married women. Many single women, who do not fall in the younger than age 26 group, are newly voter registrants. Many are cell phone users only, and polls are not taken of cell phone users only.
Most political analysts focus on Ohio as a key state, and it is. In my view, Colorado, Arizona, Nevada, and New Mexico could become determining states.
Bush: "Over the past four years, I have brought a straightforward approach to the presidency. I tell you what I'm going to do, and I keep my word." Since Bush decided to invade Iraq, at least 1103 U.S. soldiers have been killed and over 7700 wounded. This nation cannot afford Bush's word for another four years. If that happens, you will be able to count the carbs. There will be bread lines. You can go to the bank on that.
The dollar fell to a 7-month low against the euro. Can you imagine how low the dollar would be if Germany's economy did not have 10% plus unemployment?
Barack Obama: "There's not a liberal America and a conservative America. There is the United States of America."
Yesterday, Wal-Mart stated that, the number of people waiting to receive their mid-month paychecks to make purchases, was still pronounced. About 20% of their customers are described as paycheck-to-paycheck.
ISI Group's Ed Hyman, our nation's most accurate economic forecaster, reduced his forecast for 2005 GDP to 2.5% growth due to the impact of surging oil prices.
Steven Weiting, Citigroup economist, thinks that earnings for S&P 500 companies will grow but 6% next year, sharply below the Thomason First Call consensus of 9.4%.
Since August, Alaska Airlines has announced the layoff of 900 managers, mechanics, and aircraft cleaners. The company's CEO stated "they are permanent. We can't count on the economy coming back and fixing them. We have a cost problem that needs to be addresses. That takes tough decisions. No doubt there are more to come." We have a cost problem in federal government. Tough decisions have not been made. Bush has not vetoed one spending bill. Then again, he's the first president with an MBA. The degree could interfere with his ability to think.
The non-partisan Congressional Budget Office projects additional debt of $5.7 trillion should Bush's 2005 budget be enacted. That would increase the national debt to over $13 trillion. Thirteen would be a very unlucky number.
The hurricanes in Florida created massive losses. David Denslow, director of the Economic Analysis program of the Bureau of Economic and Business Research at the University of Florida, stated "total losses to private and public property, according to preliminary estimates, could be between $40 billion and $60 billion." Denslow is a member of Jed Bush's Council of Economic Advisors.
Cyrus McCormick: "Indomitable perseverence in a business properly understood always ensures ultimate success."
Nick Denton is publisher of Gawker Media. He observed "a lot of advertisers want to participate in blogs, but they don't know how."
Bernie Brillstein, Hollywood producer and manager: "You're nobody in this town unless somebody wants you dead."
Ken Langone, a founder of Home Depot and former head ot the NYSE compensation committee, stated of J.P. Morgan Chase's William Harrison, he's "the fucking genius that gave Enron all the money."
In 2000, nearly 49% of voting-age Americans did not cast ballots. Starting tomorrow, voting will begin. That's right. Not November 2. The final returns will be Nov. 2. In my view, the polls are way off the mark. For example, Latinos compose a quarter of Arizona's population. There has been an enormous number of newly registered Hispanic voters- in the Southwest, Colorado, and Florida. In addition, in Arizona, voter registration is up sharply for Native Americans. We are about to witness a much higher voter turnout. In Florida, voting begins tomorrow and ends on Nov. 2. Once you vote, the vote cannot be changed. It's not like a proxy card in a corporate contest.
Since 1972, studies have shown that participation among voters younger than age 26 has fallen by 13%. According to the U.S. Census Bureau, about 24 million people ages 18 to 24 are eligible to vote this year. Results from the New Voters Project indicate that hundreds of thousands of newly registered youth voters have occurred. It is part of the changing voter landscape.
Voter registration is up for both single and married women. Many single women, who do not fall in the younger than age 26 group, are newly voter registrants. Many are cell phone users only, and polls are not taken of cell phone users only.
Most political analysts focus on Ohio as a key state, and it is. In my view, Colorado, Arizona, Nevada, and New Mexico could become determining states.
Bush: "Over the past four years, I have brought a straightforward approach to the presidency. I tell you what I'm going to do, and I keep my word." Since Bush decided to invade Iraq, at least 1103 U.S. soldiers have been killed and over 7700 wounded. This nation cannot afford Bush's word for another four years. If that happens, you will be able to count the carbs. There will be bread lines. You can go to the bank on that.
The dollar fell to a 7-month low against the euro. Can you imagine how low the dollar would be if Germany's economy did not have 10% plus unemployment?
Barack Obama: "There's not a liberal America and a conservative America. There is the United States of America."
Yesterday, Wal-Mart stated that, the number of people waiting to receive their mid-month paychecks to make purchases, was still pronounced. About 20% of their customers are described as paycheck-to-paycheck.
ISI Group's Ed Hyman, our nation's most accurate economic forecaster, reduced his forecast for 2005 GDP to 2.5% growth due to the impact of surging oil prices.
Steven Weiting, Citigroup economist, thinks that earnings for S&P 500 companies will grow but 6% next year, sharply below the Thomason First Call consensus of 9.4%.
Since August, Alaska Airlines has announced the layoff of 900 managers, mechanics, and aircraft cleaners. The company's CEO stated "they are permanent. We can't count on the economy coming back and fixing them. We have a cost problem that needs to be addresses. That takes tough decisions. No doubt there are more to come." We have a cost problem in federal government. Tough decisions have not been made. Bush has not vetoed one spending bill. Then again, he's the first president with an MBA. The degree could interfere with his ability to think.
The non-partisan Congressional Budget Office projects additional debt of $5.7 trillion should Bush's 2005 budget be enacted. That would increase the national debt to over $13 trillion. Thirteen would be a very unlucky number.
The hurricanes in Florida created massive losses. David Denslow, director of the Economic Analysis program of the Bureau of Economic and Business Research at the University of Florida, stated "total losses to private and public property, according to preliminary estimates, could be between $40 billion and $60 billion." Denslow is a member of Jed Bush's Council of Economic Advisors.
Cyrus McCormick: "Indomitable perseverence in a business properly understood always ensures ultimate success."
Nick Denton is publisher of Gawker Media. He observed "a lot of advertisers want to participate in blogs, but they don't know how."
Bernie Brillstein, Hollywood producer and manager: "You're nobody in this town unless somebody wants you dead."
Ken Langone, a founder of Home Depot and former head ot the NYSE compensation committee, stated of J.P. Morgan Chase's William Harrison, he's "the fucking genius that gave Enron all the money."
Saturday, October 16, 2004
10/16/04 A Parliament Of Whores
Yesterday it was Alan Greenspan's turn to calm the markets. He is not terribly concerned about the price of crude oil at $54.93 because a few decades ago the impact on our economy was much greater. Today the rising price has only cut about 0.75% from our GDP growth. He did not discuss the psychological changes that have occurred in the equity markets and the resulting losses running into more than 0.75% of our GDP growth. He didn't mention the thermostats that will be turned down this winter with record high home heating oil prices. Like almost every government employee, he didn't really tell the full story. Then again, back in May, he stated he wasn't concerned about the short term- only the long term. Why should he worry in the short term? His job is secure in the short term. His two-job household is not concerned with making ends meet. His is not a paycheck-to-paycheck home.
P.J. O'Rourke: "Every government is a parliament of whores. The trouble is, in a democracy, the whores are us."
In the year ended June 2004, according to the Labor Dept, the Washington DC area added 82,000 jobs, including 31,000 local govt contracting jobs, more than any other metropolitan area. So much for small govt under a Republican administartion.
Benjamin Franklin: "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
The Bush administration's annual review of foreign exchange policy has been delayed.
Yesterday was the first day of the holy month of Ramadan.
The U.S. Economic Cycle Research Institute stated their weekly leading index fell 1% last week, the slowest growth in 81 weeks. The index has fallen for nine straight weeks, and the ECRI economists remarked the data shows the economy is not reacclerating out of the soft patch. In fact, the opposite is the case.
The October University of Michigan consumer sentiment fell to 87.5 from 94.2 in September.
Capacity utilization in September was unchanged at 77.2%, and U.S. industrial production rose 0.1% in the same period, weaker than expectations.
Many have asked why, if I think the economic news is so bad, how is it possible that consumer spending picked up in September. It's easy to explain: (1) GM, Ford, and Chrysler gave enormous incentives to move cars off dealer lots. Only Chrysler made money from vehicles in the month; and (2) the food and beverage and building materials areas were bolstered by the hurricanes. That's correct. People stocked up before and after the storms. As Wal-Mart stated, hurricanes are a net plus for their business. The same is true for Home Depot and Lowe's.
The Empire State manufacturing index fell to 17.4 in October from 27.3 in September. The new orders index fell to 21.2 in October from 26.2 in the prior month, shipments to to 19.1 from 32.1, the unfilled orders index to MINUS 2.7 from 11.7, the employment index to 17.7 from 20.3, and the workweek index to 4.9 from 17.3. Prices paid rose to a record 59.2 from 52, but prices received fell to 15.0 from 16.3. This report reflects trouble with a capital T.
Sprint to cut 700 jobs.
Standard & Poor's yesterday lowered GM's credit ratings to just above junk level. What happens when profitability dries up at GMAC?
Yesterday the U.S. Conference of Mayors issued their sixth annual metro economies report demonstrating that the nation's 318 metro areas acccount for 85.4% of the nation's GDP and 88.6% of the labor income. In 2003, a total of 109 million workers were employed in metro areas, amounting to 84% of total national employment. Of the world's 100 largest economies, 47 are U.S. metro areas. Tom Cochran, executive director of the U.S. COnference of Mayors, stated "contrary to popular belief, it's not the economy of the 50 states that drives this nation. It's the 318 metro economies- made up of cities- that are the strength of this nation." He reported that the nation still had lost over 1 million jobs since its peak employment level in March 2001.
Alan Greenspan: "Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability, because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances."
During the 12 months ended in September, retail jobs rose by only 94,000.
The Education Dept. estimates that elementary and secondary student population grew by only 160,000 in 2004. This slowing growth will hold down the need for hiring teachers. As such, over the past year, the education sector added but 135,000 jobs.
Frank Luntz, a pollster and president of the Luntz Research Companies: "Asserting that the economy is strong and Iraq a success is simply not credible to the majority of Americans- or to the stubborn 5% who remain uncommitted...It is George W. Bush who should be worried."
Yesterday it was Alan Greenspan's turn to calm the markets. He is not terribly concerned about the price of crude oil at $54.93 because a few decades ago the impact on our economy was much greater. Today the rising price has only cut about 0.75% from our GDP growth. He did not discuss the psychological changes that have occurred in the equity markets and the resulting losses running into more than 0.75% of our GDP growth. He didn't mention the thermostats that will be turned down this winter with record high home heating oil prices. Like almost every government employee, he didn't really tell the full story. Then again, back in May, he stated he wasn't concerned about the short term- only the long term. Why should he worry in the short term? His job is secure in the short term. His two-job household is not concerned with making ends meet. His is not a paycheck-to-paycheck home.
P.J. O'Rourke: "Every government is a parliament of whores. The trouble is, in a democracy, the whores are us."
In the year ended June 2004, according to the Labor Dept, the Washington DC area added 82,000 jobs, including 31,000 local govt contracting jobs, more than any other metropolitan area. So much for small govt under a Republican administartion.
Benjamin Franklin: "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
The Bush administration's annual review of foreign exchange policy has been delayed.
Yesterday was the first day of the holy month of Ramadan.
The U.S. Economic Cycle Research Institute stated their weekly leading index fell 1% last week, the slowest growth in 81 weeks. The index has fallen for nine straight weeks, and the ECRI economists remarked the data shows the economy is not reacclerating out of the soft patch. In fact, the opposite is the case.
The October University of Michigan consumer sentiment fell to 87.5 from 94.2 in September.
Capacity utilization in September was unchanged at 77.2%, and U.S. industrial production rose 0.1% in the same period, weaker than expectations.
Many have asked why, if I think the economic news is so bad, how is it possible that consumer spending picked up in September. It's easy to explain: (1) GM, Ford, and Chrysler gave enormous incentives to move cars off dealer lots. Only Chrysler made money from vehicles in the month; and (2) the food and beverage and building materials areas were bolstered by the hurricanes. That's correct. People stocked up before and after the storms. As Wal-Mart stated, hurricanes are a net plus for their business. The same is true for Home Depot and Lowe's.
The Empire State manufacturing index fell to 17.4 in October from 27.3 in September. The new orders index fell to 21.2 in October from 26.2 in the prior month, shipments to to 19.1 from 32.1, the unfilled orders index to MINUS 2.7 from 11.7, the employment index to 17.7 from 20.3, and the workweek index to 4.9 from 17.3. Prices paid rose to a record 59.2 from 52, but prices received fell to 15.0 from 16.3. This report reflects trouble with a capital T.
Sprint to cut 700 jobs.
Standard & Poor's yesterday lowered GM's credit ratings to just above junk level. What happens when profitability dries up at GMAC?
Yesterday the U.S. Conference of Mayors issued their sixth annual metro economies report demonstrating that the nation's 318 metro areas acccount for 85.4% of the nation's GDP and 88.6% of the labor income. In 2003, a total of 109 million workers were employed in metro areas, amounting to 84% of total national employment. Of the world's 100 largest economies, 47 are U.S. metro areas. Tom Cochran, executive director of the U.S. COnference of Mayors, stated "contrary to popular belief, it's not the economy of the 50 states that drives this nation. It's the 318 metro economies- made up of cities- that are the strength of this nation." He reported that the nation still had lost over 1 million jobs since its peak employment level in March 2001.
Alan Greenspan: "Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability, because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances."
During the 12 months ended in September, retail jobs rose by only 94,000.
The Education Dept. estimates that elementary and secondary student population grew by only 160,000 in 2004. This slowing growth will hold down the need for hiring teachers. As such, over the past year, the education sector added but 135,000 jobs.
Frank Luntz, a pollster and president of the Luntz Research Companies: "Asserting that the economy is strong and Iraq a success is simply not credible to the majority of Americans- or to the stubborn 5% who remain uncommitted...It is George W. Bush who should be worried."
Friday, October 15, 2004
10/15/04 Hitting The Ceiling
A year ago the Congress raised the debt ceiling by about $1 trillion to $7.384 trillion. At the start of Bush's term in office, the ceiling was $6 trillion, and had been stable for several years under Clinton. A year ago I mentioned that, the way Bush spends money coupled with the rising trade deficit, the Treasury would be back asking the Congress to raise the debt limit prior to the end of 2004. The Treasury ate through that $1 trillion and face a debt refunding on November 3, the day after the election. This will be the third time in four years that the Congress has been asked to raise the debt ceiling, a first, and is a true reflection of Bush's fiscal irresponsibility. His spending and that of the Republican controlled Congress is a WMD. You don't have to search in caves for the WMD. It's all around you. We're choking on pork. With conservatives like this, Saddam Hussein almost looks like a saint. Bush is destroying the economic well being of this nation.
Milton Berle: "You can lead a man to Congress, but you can't make him think."
Humphrey Bogart: "They'll nail anyone who ever scratched his ass during the National Anthem."
Hitting oil jumped 5 cents a gallon to $1.55 and crude oil closed at a new high of $54.62 a barrel. Heating oil supplies fell by 2.5 million barrels last week, and are 8% below last year's levels, stated the U.S. Energy Information Administration.
Some believe China's oil imports will jump 20% next year. I question that. On the whole, China's demand for imports eased last month, an indication that country's growth is slowing.
In a Guardian of London Poll, three times as many of their readers support Kerry for president than they do Bush. The Guardian invited their readers to contact voters in Clark County, Ohio, which is 30 miles west of Columbus, about the importance of the Nov. 2 election. For the best four letters, the paper offered a three-day trip to Clark County. The paper paid $25 for a list of all registered voters in Clark County. The Guardian has received thousands of requests for names and addresses so that letters could be written to the registered voters in Clark County.
In August, the U.S. trade deficit increased to a near monthly record of $54 billion. It was the third straight month that the trade defcit exceeded $50 billion. It was the third time ever that the $50 billion level had been topped. It should be noted that this was taking place in August while our exports rose to the second highest level on record. The trade deficit keeps rising even though our dollar has fallen 13% on a trade-weighted basis over the past two years.
Our budget deficit rose to a record $413 billion. Without the assistance of record low interest rates, the deficit would have been even higher.
Lenny Bruce: "The only anonymous donor is the guy who knocks up your daughter."
For the latest week, initial jobless claims rose 15,000 to 352,000. This should not have come as a surprise.
In the third quarter, GM lost money on their vehicle manufacturing operations in the U.S., Europe, and North America. It was the first loss on North American car manufacturing in six years.Their financing arm produced enough earnings to put their disappointing results in the black. What good is it to keep producing vehicles at unrealistically high levels only to sell them at a loss? The stockholders suffer and our GDP becomes overstated. To produce at a loss does not reflect a healthy GDP.
It's hard to understand. Despite the fact that the stock market is down for the past three months, optimism remains high on Wall Street. Company forecasts are reduced on a daily basis, and yet optimism remains high. For example, Lam Research stated that bookings for the fourth quarter will be down 5% to 15% and that demand has tapered off from earlier expectations.The consumer has gone into a shell, and optimism remains high in some corners for the holiday season. With high gas and heating oil prices pressuring consumer cash flow, I figure much of the holiday spending will be for gift cards. In addition, much of the window shopping activity will be driven to the internet rather than to the malls.
Robert Heinlein: "The supreme irony of life is that hardly anyone gets out of it alive."
Even though GM will cut 12,000 jobs in Europe over the next two years, this measure will not be sufficient to produce a profit in their operations there. Since 1999, GM has lost money in Europe.
A year ago the Congress raised the debt ceiling by about $1 trillion to $7.384 trillion. At the start of Bush's term in office, the ceiling was $6 trillion, and had been stable for several years under Clinton. A year ago I mentioned that, the way Bush spends money coupled with the rising trade deficit, the Treasury would be back asking the Congress to raise the debt limit prior to the end of 2004. The Treasury ate through that $1 trillion and face a debt refunding on November 3, the day after the election. This will be the third time in four years that the Congress has been asked to raise the debt ceiling, a first, and is a true reflection of Bush's fiscal irresponsibility. His spending and that of the Republican controlled Congress is a WMD. You don't have to search in caves for the WMD. It's all around you. We're choking on pork. With conservatives like this, Saddam Hussein almost looks like a saint. Bush is destroying the economic well being of this nation.
Milton Berle: "You can lead a man to Congress, but you can't make him think."
Humphrey Bogart: "They'll nail anyone who ever scratched his ass during the National Anthem."
Hitting oil jumped 5 cents a gallon to $1.55 and crude oil closed at a new high of $54.62 a barrel. Heating oil supplies fell by 2.5 million barrels last week, and are 8% below last year's levels, stated the U.S. Energy Information Administration.
Some believe China's oil imports will jump 20% next year. I question that. On the whole, China's demand for imports eased last month, an indication that country's growth is slowing.
In a Guardian of London Poll, three times as many of their readers support Kerry for president than they do Bush. The Guardian invited their readers to contact voters in Clark County, Ohio, which is 30 miles west of Columbus, about the importance of the Nov. 2 election. For the best four letters, the paper offered a three-day trip to Clark County. The paper paid $25 for a list of all registered voters in Clark County. The Guardian has received thousands of requests for names and addresses so that letters could be written to the registered voters in Clark County.
In August, the U.S. trade deficit increased to a near monthly record of $54 billion. It was the third straight month that the trade defcit exceeded $50 billion. It was the third time ever that the $50 billion level had been topped. It should be noted that this was taking place in August while our exports rose to the second highest level on record. The trade deficit keeps rising even though our dollar has fallen 13% on a trade-weighted basis over the past two years.
Our budget deficit rose to a record $413 billion. Without the assistance of record low interest rates, the deficit would have been even higher.
Lenny Bruce: "The only anonymous donor is the guy who knocks up your daughter."
For the latest week, initial jobless claims rose 15,000 to 352,000. This should not have come as a surprise.
In the third quarter, GM lost money on their vehicle manufacturing operations in the U.S., Europe, and North America. It was the first loss on North American car manufacturing in six years.Their financing arm produced enough earnings to put their disappointing results in the black. What good is it to keep producing vehicles at unrealistically high levels only to sell them at a loss? The stockholders suffer and our GDP becomes overstated. To produce at a loss does not reflect a healthy GDP.
It's hard to understand. Despite the fact that the stock market is down for the past three months, optimism remains high on Wall Street. Company forecasts are reduced on a daily basis, and yet optimism remains high. For example, Lam Research stated that bookings for the fourth quarter will be down 5% to 15% and that demand has tapered off from earlier expectations.The consumer has gone into a shell, and optimism remains high in some corners for the holiday season. With high gas and heating oil prices pressuring consumer cash flow, I figure much of the holiday spending will be for gift cards. In addition, much of the window shopping activity will be driven to the internet rather than to the malls.
Robert Heinlein: "The supreme irony of life is that hardly anyone gets out of it alive."
Even though GM will cut 12,000 jobs in Europe over the next two years, this measure will not be sufficient to produce a profit in their operations there. Since 1999, GM has lost money in Europe.
Thursday, October 14, 2004
10/14/04 The Truth
Elvis Presley: "Truth is like the sun. You can shut it out for a time, but it ain't goin' away."
The title of the 8/6/2001 Presidential Daily Briefing by Condi Rice: "Bin Laden determined to attack inside the U.S."
Heating oil hit a record $1.50 a gallon and November crude settled at $53.64 a barrel.
Novellus stated that its orders in September "weakened significantly."
The BLS revised productivity in the second quarter to 1.5% in the business sector and to 2.5% in the nonfarm sector. Real hourly compensation for manufacturing declined 1.5%, the largest quarterly decline since the second quarter of 2000, and unit labor costs dropped 3.5%.
The Conference Board reported that chief executives' confidence declined again, to 63 at the end of the third quarter from 70 in the prior quarter. Both current conditions and expectations softened.
According to the latest Zogby poll, Bush has lost the support of the largest segments of the Arab American populations- Roman Catholics and those born in the U.S.
The API reported that September oil output was at its lowest monthly level in 50 years.
Copper prices fell the most in 16 years in London amid speculation that growth is cooling in China and the U.S. Profit taking certainly did play a role too. In addition, there is the believe that next year's copper production will be sufficent to meet demand.
There have not been any hurricanes in October and hopefully that will continue to be the case. Therefore, in October, no one can blame the lack of hiring on hurricanes. Look around you. How many companies do you see or hear that are hiring? I'm not talking temporary work or seasonal work for the holidays. Go to any state. The layoffs and the plant closings are dwarfing the serious hiring. Analysts missed the point of the Intel report. This company doesn't have a stupid CFO. In a month's time, his projection for their quarterly tax rate wasn't even close. Intel's business in September in the U.S. weakened significantly. That was also true of Novellus. How many other key tech companies had the same experience? Technology is the growth engine in our economy. That engine is sputtering. I Pods can only carry a myriad of songs- not the economy.
Elvis Presley: "Truth is like the sun. You can shut it out for a time, but it ain't goin' away."
The title of the 8/6/2001 Presidential Daily Briefing by Condi Rice: "Bin Laden determined to attack inside the U.S."
Heating oil hit a record $1.50 a gallon and November crude settled at $53.64 a barrel.
Novellus stated that its orders in September "weakened significantly."
The BLS revised productivity in the second quarter to 1.5% in the business sector and to 2.5% in the nonfarm sector. Real hourly compensation for manufacturing declined 1.5%, the largest quarterly decline since the second quarter of 2000, and unit labor costs dropped 3.5%.
The Conference Board reported that chief executives' confidence declined again, to 63 at the end of the third quarter from 70 in the prior quarter. Both current conditions and expectations softened.
According to the latest Zogby poll, Bush has lost the support of the largest segments of the Arab American populations- Roman Catholics and those born in the U.S.
The API reported that September oil output was at its lowest monthly level in 50 years.
Copper prices fell the most in 16 years in London amid speculation that growth is cooling in China and the U.S. Profit taking certainly did play a role too. In addition, there is the believe that next year's copper production will be sufficent to meet demand.
There have not been any hurricanes in October and hopefully that will continue to be the case. Therefore, in October, no one can blame the lack of hiring on hurricanes. Look around you. How many companies do you see or hear that are hiring? I'm not talking temporary work or seasonal work for the holidays. Go to any state. The layoffs and the plant closings are dwarfing the serious hiring. Analysts missed the point of the Intel report. This company doesn't have a stupid CFO. In a month's time, his projection for their quarterly tax rate wasn't even close. Intel's business in September in the U.S. weakened significantly. That was also true of Novellus. How many other key tech companies had the same experience? Technology is the growth engine in our economy. That engine is sputtering. I Pods can only carry a myriad of songs- not the economy.
Wednesday, October 13, 2004
10/13/04 Is Bush's Time Up?
John Edwards: "I guarantee you, George Bush is going to do everything he can to put lipstick on this pig. But no matter how much lipstick you put on it, it's still a pig."
The Crawford, TX Iconoclast: "Kerry Will Restore American Dignity." The Iconoclast majority owner was a fervent supporter of Ronald Reagan.
Germany's Defense Minister stated his country might deploy troops in Iraq if conditions there change.
Gasoline prices rose to $2.03 a gallon, the highest ever for October and the highest price in four months.
Richard Berner, chief U.S. economist at Morgan Stanley: "Higher energy costs may reduce consumer spending on other goods and services by $30 to $40 billion in coming months."
Ethan Harris, chief economist at Lehman Bros: "Consumer spending is going to lag unless you get rapid job growth, and it doesn't look like that's going to happen."
Intel's effective tax rate for the third quarter was 21.4% versus the July expectation of 31% and below the September expectation of 29.5%. In other words, their mix of business changed drastically in a very short time. Higher profits were generated in lower tax jurisdictions, simply put, outside the U.S. In sum, Intel reduced its tax provision for the quarter by $195 million, increasing earnings by 3 cents per share. Gross margins fell to 55.7% from an expected level of 58%, primarily the result of inventory reserve adjustments. The company used cash of $2.5 billion to repurchase 106.3 million shares of stock. Flash memory units were flat. Many analysts believe the report represented good news. I continue to believe long term holders will be rewarded. The short-term is clouded.
In the Iraq war, 1,075 of our U.S. soldiers have been killed and 7,750 wounded. For what?
According to the USDA, farmers will harvest 11.6 billion bushels of corn, 15% more than in 2003, and 3.1 billion bushels of soybeans, up 27% from the prior year. Both would be records.
Late in 1931 and again in Roosevelt's inauguration in 1933, the Fed sensed (incorrectly) that the economy was picking up steam and raised interest rates. After each rate hike the economy fell further. In the 1930s, foreigners did not own vast amounts of our Treasury bonds, stocks, and real estate.
The Bank of International Settlements: "Given the current low level of inflation and the uncertainty of forecasts, the episodes of declining prices... cannot be ruled out...most advanced industrial economies might be one deep recession away from experiencing deflation."
According to congressional estimates, Joseph Abate, Lehman Bros economist, stated the cost of the full Bush economic package would exceed 2.2 trillion dollars over the next decade while Kerry's plan would likely increase debt by 1.1 trillion dollars over the same period. Both results are unsatisfactory; however, Bush played the fear card when he stated the Kerry plan would lead to increased taxes. Bush's package creates twice the debt and is the greater danger to our economic well being and will lead to lower living standards. He has nothing left in his arsenal but the fear card. It's a transparent nothing.
Billy Graham: "When wealth is lost, nothing is lost; when health is lost, something is lost. When charcter is lost, all is lost."
Norway is the world's third largest oil exporter. Yesterday they were facing a rig strike.
John Edwards: "I guarantee you, George Bush is going to do everything he can to put lipstick on this pig. But no matter how much lipstick you put on it, it's still a pig."
The Crawford, TX Iconoclast: "Kerry Will Restore American Dignity." The Iconoclast majority owner was a fervent supporter of Ronald Reagan.
Germany's Defense Minister stated his country might deploy troops in Iraq if conditions there change.
Gasoline prices rose to $2.03 a gallon, the highest ever for October and the highest price in four months.
Richard Berner, chief U.S. economist at Morgan Stanley: "Higher energy costs may reduce consumer spending on other goods and services by $30 to $40 billion in coming months."
Ethan Harris, chief economist at Lehman Bros: "Consumer spending is going to lag unless you get rapid job growth, and it doesn't look like that's going to happen."
Intel's effective tax rate for the third quarter was 21.4% versus the July expectation of 31% and below the September expectation of 29.5%. In other words, their mix of business changed drastically in a very short time. Higher profits were generated in lower tax jurisdictions, simply put, outside the U.S. In sum, Intel reduced its tax provision for the quarter by $195 million, increasing earnings by 3 cents per share. Gross margins fell to 55.7% from an expected level of 58%, primarily the result of inventory reserve adjustments. The company used cash of $2.5 billion to repurchase 106.3 million shares of stock. Flash memory units were flat. Many analysts believe the report represented good news. I continue to believe long term holders will be rewarded. The short-term is clouded.
In the Iraq war, 1,075 of our U.S. soldiers have been killed and 7,750 wounded. For what?
According to the USDA, farmers will harvest 11.6 billion bushels of corn, 15% more than in 2003, and 3.1 billion bushels of soybeans, up 27% from the prior year. Both would be records.
Late in 1931 and again in Roosevelt's inauguration in 1933, the Fed sensed (incorrectly) that the economy was picking up steam and raised interest rates. After each rate hike the economy fell further. In the 1930s, foreigners did not own vast amounts of our Treasury bonds, stocks, and real estate.
The Bank of International Settlements: "Given the current low level of inflation and the uncertainty of forecasts, the episodes of declining prices... cannot be ruled out...most advanced industrial economies might be one deep recession away from experiencing deflation."
According to congressional estimates, Joseph Abate, Lehman Bros economist, stated the cost of the full Bush economic package would exceed 2.2 trillion dollars over the next decade while Kerry's plan would likely increase debt by 1.1 trillion dollars over the same period. Both results are unsatisfactory; however, Bush played the fear card when he stated the Kerry plan would lead to increased taxes. Bush's package creates twice the debt and is the greater danger to our economic well being and will lead to lower living standards. He has nothing left in his arsenal but the fear card. It's a transparent nothing.
Billy Graham: "When wealth is lost, nothing is lost; when health is lost, something is lost. When charcter is lost, all is lost."
Norway is the world's third largest oil exporter. Yesterday they were facing a rig strike.
Tuesday, October 12, 2004
10/12/04 Families Left Behind
A recent non-partisan study funded by Annie E. Casey, Ford and Rockefeller foundations paints a portrait of working low-income families. The study concluded that one out of every four working families earns such a low wage that they struggle to survive financially, and that "one emergency- a broken down car, rent increase, or serious illness- can disrupt the families’ precarious equilibrium and plunge them into financial chaos. We are talking about 9.2 million families including 20 million children. Their breadwinners work an average of 1.2 jobs, and 72% were born in the U.S.
Retiree health care benefits are being cut as costs escalate. More and more companies raise premiums and reduce coverage for former workers, despite in many cases, a company guaranteed medical benefits for life.
The IEA stated that demand for oil is rising faster than had recently been forecast, and this provided the fuel for crude to rise above $54 a barrel. The average cost of unleaded gas on a national basis in the U.S. is now $2 a gallon. The rising price of gasoline at the pump places a further squeeze on the pocketbooks of middle and lower-middle class working families. Retailers have already begun to feel the impact. Estimates for fourth quarter GDP will be reduced.
An eruption could occur at any time at Mt. St. Helens and without much warning. Temperatures are rising in the crater and magma is pushing out and up.
The dollar is at a one-month low against the yen.
Ten-year Treasury bond yields are back down to 4.09% and only about 11 basis points from the most recent low point. Gold also continues on a firm footing.
Brandon Roberts, co-author of Working Hard, Falling Short remarked "what we haven’t come to grips with is how large this number is" of working low-income families.
A recent non-partisan study funded by Annie E. Casey, Ford and Rockefeller foundations paints a portrait of working low-income families. The study concluded that one out of every four working families earns such a low wage that they struggle to survive financially, and that "one emergency- a broken down car, rent increase, or serious illness- can disrupt the families’ precarious equilibrium and plunge them into financial chaos. We are talking about 9.2 million families including 20 million children. Their breadwinners work an average of 1.2 jobs, and 72% were born in the U.S.
Retiree health care benefits are being cut as costs escalate. More and more companies raise premiums and reduce coverage for former workers, despite in many cases, a company guaranteed medical benefits for life.
The IEA stated that demand for oil is rising faster than had recently been forecast, and this provided the fuel for crude to rise above $54 a barrel. The average cost of unleaded gas on a national basis in the U.S. is now $2 a gallon. The rising price of gasoline at the pump places a further squeeze on the pocketbooks of middle and lower-middle class working families. Retailers have already begun to feel the impact. Estimates for fourth quarter GDP will be reduced.
An eruption could occur at any time at Mt. St. Helens and without much warning. Temperatures are rising in the crater and magma is pushing out and up.
The dollar is at a one-month low against the yen.
Ten-year Treasury bond yields are back down to 4.09% and only about 11 basis points from the most recent low point. Gold also continues on a firm footing.
Brandon Roberts, co-author of Working Hard, Falling Short remarked "what we haven’t come to grips with is how large this number is" of working low-income families.
Sunday, October 10, 2004
10/10/04 Eliminating The Guessing
Normally, it is quite difficult to get a handle on the monthly nonfarm payroll numbers; however, that was not the case this past Friday. Greg Mankiw, head of the President's Council of Economic Advisors, alluded to the yearly revisions two days before they were released. In addition, the Challenger, Gray, & Christmas monthly announced hiring and layoffs were completely one-sided. John Challeneger stated, that based on the numbers, he believed the Friday report would be disappointing because there were hardly any hires. Lastly, the daily plant closings and layoffs have been escalating in recent weeks. In the end, it simply required piecing the information together and reaching a conclusion. Those caught flatfooted did not do their homework.
It is appropriate that we study the latest AP-Ipros Consumer Confidence survey that slipped 6 points in September to its lowest levels since mid-summer amid worries about high energy prices, uncertainty about the labor market, and anxiety about making major purchases like a new car or a home. The number of people who feel confident about job security and themselves and for people they know dropped from 48% to 40% in September, and the number who were more confident of their ability to invest in the future dropped from 51% to 42%.
Consumers cutback on their borrowing in August by the largest amount since the end of 1990.
Lynn Franco, director of the Conference Board's Consumer Research Center, talking about home heating oil prices stated "the bottom line is that because they are spending more to stay warm, they will have less discretionary income."
For the fourth time in five years the House Ethics Committee rebuked the Republican Majority Leader, Tom DeLay of Texas.
Thousands of full-time Albertson employees in the Dall-FW area are being reduced to part-time hours.
Congressman Steny Hoyer: "In 2004, the Republican Congress failed to enact a budget- the first time in 30 years that this has happened when the same party controls the House, Senate, and White House. Today you might call this Republican Congress the do less than nothing Congress."
According to SurePayroll, in California the average small business saw employment for the year 2004 up 5.7% but average salaries are down 5.9%.
Normally, it is quite difficult to get a handle on the monthly nonfarm payroll numbers; however, that was not the case this past Friday. Greg Mankiw, head of the President's Council of Economic Advisors, alluded to the yearly revisions two days before they were released. In addition, the Challenger, Gray, & Christmas monthly announced hiring and layoffs were completely one-sided. John Challeneger stated, that based on the numbers, he believed the Friday report would be disappointing because there were hardly any hires. Lastly, the daily plant closings and layoffs have been escalating in recent weeks. In the end, it simply required piecing the information together and reaching a conclusion. Those caught flatfooted did not do their homework.
It is appropriate that we study the latest AP-Ipros Consumer Confidence survey that slipped 6 points in September to its lowest levels since mid-summer amid worries about high energy prices, uncertainty about the labor market, and anxiety about making major purchases like a new car or a home. The number of people who feel confident about job security and themselves and for people they know dropped from 48% to 40% in September, and the number who were more confident of their ability to invest in the future dropped from 51% to 42%.
Consumers cutback on their borrowing in August by the largest amount since the end of 1990.
Lynn Franco, director of the Conference Board's Consumer Research Center, talking about home heating oil prices stated "the bottom line is that because they are spending more to stay warm, they will have less discretionary income."
For the fourth time in five years the House Ethics Committee rebuked the Republican Majority Leader, Tom DeLay of Texas.
Thousands of full-time Albertson employees in the Dall-FW area are being reduced to part-time hours.
Congressman Steny Hoyer: "In 2004, the Republican Congress failed to enact a budget- the first time in 30 years that this has happened when the same party controls the House, Senate, and White House. Today you might call this Republican Congress the do less than nothing Congress."
According to SurePayroll, in California the average small business saw employment for the year 2004 up 5.7% but average salaries are down 5.9%.
Saturday, October 09, 2004
10/9/04 A Letter For Wall Street And Voters
A letter was sent to Bush from Harvard professors David Moss, Louis Wells, and 159 additional business school professors, including 2 Nobel Laureates and 2 Pulitzer prize winners. Included was the following: "The data make clear that your policy of slashing taxes- primarily for those at the upper reaches of the income distribution-has not worked. Nearly every major economic indicator has deteriorated since you took office in January 2001... if your economic advisors are telling you that these deficits can be defeated through further reduction in tax rates, then you need new advisors."
Crude closed at a record high of $53.31 a barrel, 100% higher than the price in September 2003.
If jobs and wages continue to grow at their current rate, household income would have declined in 2004.
The employed share of the population declined in September for the second consecutive month.
Over the past year, about 48% of all transactions on the NYSE resulted from programmed trading with buy orders outnumbering sell orders.
Washington DC has an unemployment rate of 7.5%. There are still too many politicians, staff members, and lobbyists.
Mark Hulbert: "The prevailing mood is more one of compacency than it is of fear. And that is more typical of bear markets than it is of bull markets."
On two separate occasions I have mentioned that one cannot draw a straight line from the Monster Employment Index to the nonfarm payrolls report. This week the Monster Employment Index reached a new all-time high to 151 in September from August's 145. It is important to note that Monster lists online job availability. That does not equate to hiring. Many companies use Monster to solicit resumes in order to avoid fees when and if they do hire.
Glad Mfg Co, a division of Clorox, will close its Carterville, GA facility and cut 475 jobs. DDI Corp. will cut 175 jobs.
The bidding for the $23.5 billion Air Force tanker contract will be re-opened. Airbus will be allowed to bid against Boeing. Lawmakers in the Congress have now prohibited the leasing of the tankers. The real money is in the maintenance contract and not the building of the planes. The future for the Boeing 767 is not bright. It could be one more blow to their Everett plant.
Wal-Mart's CEO Lee Scott: "Twenty percent of our customers don't have checking accounte and live paycheck-to-paycheck. This fuel tax is being felt through the lower middle class, which is also heavily in debt. If 100 million customers, Wal-Mart's weekly customer count, are spending an extra $10 a week on gas, that's $1 billion in revenue that no longer exists. People are still buying deodorant, shampoo, the low-margin items. But we're missing the upside, the high-margin discretionary items- toys, barbecue grills, the items that are hanging at the checkout, like 35-millimeter disposable cameras...people are worried about jobs."
A letter was sent to Bush from Harvard professors David Moss, Louis Wells, and 159 additional business school professors, including 2 Nobel Laureates and 2 Pulitzer prize winners. Included was the following: "The data make clear that your policy of slashing taxes- primarily for those at the upper reaches of the income distribution-has not worked. Nearly every major economic indicator has deteriorated since you took office in January 2001... if your economic advisors are telling you that these deficits can be defeated through further reduction in tax rates, then you need new advisors."
Crude closed at a record high of $53.31 a barrel, 100% higher than the price in September 2003.
If jobs and wages continue to grow at their current rate, household income would have declined in 2004.
The employed share of the population declined in September for the second consecutive month.
Over the past year, about 48% of all transactions on the NYSE resulted from programmed trading with buy orders outnumbering sell orders.
Washington DC has an unemployment rate of 7.5%. There are still too many politicians, staff members, and lobbyists.
Mark Hulbert: "The prevailing mood is more one of compacency than it is of fear. And that is more typical of bear markets than it is of bull markets."
On two separate occasions I have mentioned that one cannot draw a straight line from the Monster Employment Index to the nonfarm payrolls report. This week the Monster Employment Index reached a new all-time high to 151 in September from August's 145. It is important to note that Monster lists online job availability. That does not equate to hiring. Many companies use Monster to solicit resumes in order to avoid fees when and if they do hire.
Glad Mfg Co, a division of Clorox, will close its Carterville, GA facility and cut 475 jobs. DDI Corp. will cut 175 jobs.
The bidding for the $23.5 billion Air Force tanker contract will be re-opened. Airbus will be allowed to bid against Boeing. Lawmakers in the Congress have now prohibited the leasing of the tankers. The real money is in the maintenance contract and not the building of the planes. The future for the Boeing 767 is not bright. It could be one more blow to their Everett plant.
Wal-Mart's CEO Lee Scott: "Twenty percent of our customers don't have checking accounte and live paycheck-to-paycheck. This fuel tax is being felt through the lower middle class, which is also heavily in debt. If 100 million customers, Wal-Mart's weekly customer count, are spending an extra $10 a week on gas, that's $1 billion in revenue that no longer exists. People are still buying deodorant, shampoo, the low-margin items. But we're missing the upside, the high-margin discretionary items- toys, barbecue grills, the items that are hanging at the checkout, like 35-millimeter disposable cameras...people are worried about jobs."
Friday, October 08, 2004
10/8/04 The Payroll Numbers
A close inspection makes for ugly reading. There were no employment gains in healthcare- only 8,000 jobs in doctors' offices. Despite low interest rates, there were no gains in construction jobs. There was a loss of 18,000 manufacturing jobs and less hours worked each week for manufacturing employees. The wage gains amounted to 3 cents per hour. Of the total 96,000 increase in nonfarm jobs about one-third or 33,000 were temp jobs. The BLS reported "modest gains occurred in a few service-providing industries," mainly, financial and real estate. More importantly, in September, 7.7 million persons held more than 1 job. That represents 5.5% of the total employment vs 5.2% a year ago. The hurricanes in Florida had no quantifiable effect on the employment numbers. The nonfarm payroll numbers did not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 produced a gain of 236,000 jobs. The final revision will be out in February 2005. They are not a scientific estimate. As I stated yesterday, they are generated out of a bias. Even so, a loss of 200,000 jobs in the household survey, which I'm not fond of, just about wiped out the 236,000.
Unisys to cut 1,400 jobs, Hedstrom Corp.800 jobs, AT&T 7400, Rusch 91, and Temple-Inland 1,500 jobs.
We have a serious employment problem in our country. The problem is worsening. A political spin will not create one job and will only go towards undermining the Administration's ability to face and deal with reality.
A close inspection makes for ugly reading. There were no employment gains in healthcare- only 8,000 jobs in doctors' offices. Despite low interest rates, there were no gains in construction jobs. There was a loss of 18,000 manufacturing jobs and less hours worked each week for manufacturing employees. The wage gains amounted to 3 cents per hour. Of the total 96,000 increase in nonfarm jobs about one-third or 33,000 were temp jobs. The BLS reported "modest gains occurred in a few service-providing industries," mainly, financial and real estate. More importantly, in September, 7.7 million persons held more than 1 job. That represents 5.5% of the total employment vs 5.2% a year ago. The hurricanes in Florida had no quantifiable effect on the employment numbers. The nonfarm payroll numbers did not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 produced a gain of 236,000 jobs. The final revision will be out in February 2005. They are not a scientific estimate. As I stated yesterday, they are generated out of a bias. Even so, a loss of 200,000 jobs in the household survey, which I'm not fond of, just about wiped out the 236,000.
Unisys to cut 1,400 jobs, Hedstrom Corp.800 jobs, AT&T 7400, Rusch 91, and Temple-Inland 1,500 jobs.
We have a serious employment problem in our country. The problem is worsening. A political spin will not create one job and will only go towards undermining the Administration's ability to face and deal with reality.
10/8/04 A Close Look At Employment Numbers
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
10/8/04 A Close Look At Employment Numbers
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
10/8/04 A Close Look At Employment Numbers
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
There were significant changes taking place in the September payroll gains of 96,000. The most important were in healthcare and construction. To my surprise, there was no employment gain in either area. There was a small pickup of 8,000 at doctors' offices. Temp help gains of 33,000 accounted for just over one-third of the month's increase in employment. Manufacturing lost 18,000 jobs. The manufacturing workweek dropped 0.1 hour. Possibly the most telling story is that there are 7.7 million persons holding more than one job. That represents 5.5% of total employment vs 5.2% one year ago at this time. The small gains in September not already mentioned were financial services 24,000, real estate services 15,000, and utilities of 2,000. The BLS stated there was no quantifiable effect from the Florida hurricanes on the numbers. Please note that today's nonfarm payroll numbers do not include the agricultural workers impacted by the hurricanes.
The upward benchmark revisions to March 2004 were a plus 236,000 in the number of jobs. The final revision will be provided in February 2005. The numbers are not scientifically quantifiable.
Unisys to cut 1,400 jobs. Hedstrom Corp laid off 800 workers. Temple-Inland to cut 1,500 jobs.
With almost no increase in wages and the wage week hours unchanged, there is a lack of progress on the labor front. In fact, in my view, it is worsening. It is a serious problem. No political spin will make it better.
Thursday, October 07, 2004
10/7/04 Special Bulletin: Sample Design And Estimator Biases
The next debate is tomorrow. It is also the day the Labor Dept revises the state-by-state unemployment data for the past year. Many believe the revision will increase the jobs number by 300,000 to 500,000. How is this possible? The Labor Dept explains employment revision this way. The current employment statistics are based on a sample of 400,000 reports, and the samplying error is small, and "the sampling error is not usually an important factor." How does the nonsampling error arise? It arises "from Unemployment Insurance data and the alternative sources used to establish the noncovered population benchmarks. Sources of nonsampling error include coverage, response, and processing errors in both data series." More importantly, the nonsampling data is "subject to sample design and estimator biases." In sum, the upcoming election will be influenced by non-scientific data gathering with a foundation in biases.
Harry Truman: "If you can't convince them, confuse them."
Michael Niemera, chief economist for the International Council of Shopping Centers: "The soft patch remains in place for the retail sector at this point."
Jeff Rubin, chief economist for CIBC World Markets, stated "as the world's largest importer of crude, all of a sudden prospects for the once hot U.S. economy don't look so hot anymore... the North American economy will soon be feeling the brake of soaring energy prices."
According to a survey by the Business Council, 70% of the CEOs polled project sluggish growth for our economy in 2005, ranging from flat to 2% growth.
Bradley Belt, director of the Pension Benefit Guaranty Corp., stated he expected a significant increase in the 2004 deficit, eclipsing 2003's record $11.2 billion deficit. He remarked that "the longer-term solveny of the pension insurance program...is at risk."
The next debate is tomorrow. It is also the day the Labor Dept revises the state-by-state unemployment data for the past year. Many believe the revision will increase the jobs number by 300,000 to 500,000. How is this possible? The Labor Dept explains employment revision this way. The current employment statistics are based on a sample of 400,000 reports, and the samplying error is small, and "the sampling error is not usually an important factor." How does the nonsampling error arise? It arises "from Unemployment Insurance data and the alternative sources used to establish the noncovered population benchmarks. Sources of nonsampling error include coverage, response, and processing errors in both data series." More importantly, the nonsampling data is "subject to sample design and estimator biases." In sum, the upcoming election will be influenced by non-scientific data gathering with a foundation in biases.
Harry Truman: "If you can't convince them, confuse them."
Michael Niemera, chief economist for the International Council of Shopping Centers: "The soft patch remains in place for the retail sector at this point."
Jeff Rubin, chief economist for CIBC World Markets, stated "as the world's largest importer of crude, all of a sudden prospects for the once hot U.S. economy don't look so hot anymore... the North American economy will soon be feeling the brake of soaring energy prices."
According to a survey by the Business Council, 70% of the CEOs polled project sluggish growth for our economy in 2005, ranging from flat to 2% growth.
Bradley Belt, director of the Pension Benefit Guaranty Corp., stated he expected a significant increase in the 2004 deficit, eclipsing 2003's record $11.2 billion deficit. He remarked that "the longer-term solveny of the pension insurance program...is at risk."
10/7/04 Change That Tune
Hussein had WMD. Hussein is linked to al-Qaeda. We invade Iraq. Nearly 1100 U.S. soldiers have been killed and at least 7500 wounded. The financial cost ranges between $120 billion and $200 billion and counting. Hussein did not have WMD in 2003. He had them in 1991. Hussein is not linked with al-Qaeda. Change that tune. The world is better off without Hussein. Iraq is an integral part of the world on terror. That's because we invaded Iraq and created the terror. Changing that tune won't bring back those U.S. soldiers killed and won't heal our wounded warriors.
When oil was trading at $40 a barrel, the high prices at the pump were impacting consumer spending. Now that it is trading at $53 a barrel, we're told there is little or no impact on consumer spending. Changing that tune will not ring the register for Wal-Mart's 175,000 cashiers. The Wal-Mart stores comparable sales for September rose 2% vs 5.6% a year ago and Sam's Club sales rose 4.5% vs 8.2% a year ago. For the October 4-week period, the company is forecasting comparative sales for the U.S. to be up in the 2 to 4% range. John Morris, retail analyst at Harris Nesbitt, stated "we clearly have evidence of the consumer slowing in the last two weeks of September, and some of the retailers are backing off of saying we'll see a significant rebound in October."
The Bank of America is laying off 4,500 employees.
The 4-week average of initial jobless claims rose by 4,250 to 348,500, the highest level since mid-February. Yet, analysts forecast a huge upward revision for job creation in the past year and the addition of 150,000 jobs for September. Of course, analysts fail to describe the quality of the jobs nor the pay and benfit levels. All jobs are not created equal.
We have quite a coalition in Iraq. Alexander Kwasniewski of Poland stated "they deceived us about the weapons of mass destruction. That's true. We were taken for a ride." Will the voters be taken for a ride on November 2?
According to a report by the Kaiser Commission on Medicaid and the Uninsured, the cost of caring for 52 million poor and disabled Americans who rely on Medicaid for health care is projected to jump 11.7% for states this fiscal year. Aside from education, Medicaid is the largest item in most state budgets.
Henry Ward Beecher: "Fear secrets acids; but love and trust are sweet juices."
Hussein had WMD. Hussein is linked to al-Qaeda. We invade Iraq. Nearly 1100 U.S. soldiers have been killed and at least 7500 wounded. The financial cost ranges between $120 billion and $200 billion and counting. Hussein did not have WMD in 2003. He had them in 1991. Hussein is not linked with al-Qaeda. Change that tune. The world is better off without Hussein. Iraq is an integral part of the world on terror. That's because we invaded Iraq and created the terror. Changing that tune won't bring back those U.S. soldiers killed and won't heal our wounded warriors.
When oil was trading at $40 a barrel, the high prices at the pump were impacting consumer spending. Now that it is trading at $53 a barrel, we're told there is little or no impact on consumer spending. Changing that tune will not ring the register for Wal-Mart's 175,000 cashiers. The Wal-Mart stores comparable sales for September rose 2% vs 5.6% a year ago and Sam's Club sales rose 4.5% vs 8.2% a year ago. For the October 4-week period, the company is forecasting comparative sales for the U.S. to be up in the 2 to 4% range. John Morris, retail analyst at Harris Nesbitt, stated "we clearly have evidence of the consumer slowing in the last two weeks of September, and some of the retailers are backing off of saying we'll see a significant rebound in October."
The Bank of America is laying off 4,500 employees.
The 4-week average of initial jobless claims rose by 4,250 to 348,500, the highest level since mid-February. Yet, analysts forecast a huge upward revision for job creation in the past year and the addition of 150,000 jobs for September. Of course, analysts fail to describe the quality of the jobs nor the pay and benfit levels. All jobs are not created equal.
We have quite a coalition in Iraq. Alexander Kwasniewski of Poland stated "they deceived us about the weapons of mass destruction. That's true. We were taken for a ride." Will the voters be taken for a ride on November 2?
According to a report by the Kaiser Commission on Medicaid and the Uninsured, the cost of caring for 52 million poor and disabled Americans who rely on Medicaid for health care is projected to jump 11.7% for states this fiscal year. Aside from education, Medicaid is the largest item in most state budgets.
Henry Ward Beecher: "Fear secrets acids; but love and trust are sweet juices."
Wednesday, October 06, 2004
10/6/04 The Lies Abound
We are making progress in Iraq. The death count mounts. The number of wounded continues to rise. The Fed states the soft patch in the economy is short lived. That’s funny. Challenger, Gray & Christmas stated there were 107,863 announced layoffs in September, 41% more than in September 2003 and 45% more than in August 2004. The latest September figures were the largest since January 2004 and brought this third quarter’s job cuts to 251,585 or about 20% higher than in the second quarter and 4% higher than the year ago September quarter. To make matters worse, only 16, 166 new job openings were announced in this September down from 132,105 in the prior month. John Challenger observed that "weak hiring announcements last month are not a good indication of stronger job creation to come." There was additional economic information to ashen the faces of the Fed policy members. The ISM’s measure of financial services, construction, retail, and other service jobs declined to 56.7 for September from the prior month’s 58.2 and was the lowest reading since May 2003. One should note that the services sector of the economy accounts for at least 80% of our GDP. The manufacturing sector accounts for about 12% of our economy and fell in September to 58.5, the lowest level in a year. In sum, the soft patch is not short lived and is, in fact, picking up steam. The lies abound.
We will witness slight of hand on Friday, the day the BLS revises the unemployment rolls and the unemployment rate. Sure jobs will have been added in construction and healthcare; however, in other areas, such as, hospitality and retail, it is difficult at best to make ends meet on that level of compensation. The BLS will bemoan the loss of jobs due to the hurricane in Florida. Remember Florida announced only 8,400 job losses could be attributed to the hurricanes. Lies will abound to assist Bush in his re-election bid. The facts will show that the job market is listless and that most companies are postponing decisions on hiring full-time employees with benefits. Revising the past to make the present rosier is simply an exercise in futility.
Albert Einstein: "I want to know God’s thoughts… the rest are details."
John Eisenhower, son of Dwight Eisenhower, and 186 former ambassadors, concluded "John Kerry has the experience, strength, and wisdom to lead us in fighting the war on terrorism, winning the peace in Iraq, making America more secure, and restoring America as the beacon of democracy and freedom in the world."
The Financial Times stated in an editorial that "the U.S. is the indebted superpower. …Active U.S. leadership is needed to promote changes in exchange rates and macro-economic policies around the globe. The dollar must fall further now if it is not to fall far more dramatically later on. As these adjustments begin, the U.S. current account deficit will begin to shrink, which will automatically stimulate the U.S. economy."
September unemployment in Germany rose by 27,000 from the August numbers and the jobless rate stands at 10.7%. Consumers have stopped buying and their exports are down.
The European service industry had its slowest growth in a year.
It is not surprising that crude is trading near $51 a barrel. U.S. oil production is at a 54-year low. U.S. retail gas prices at the pump are at a 4-mnth high. Heating oil hit a new record high of $1.40 per gallon. That is the wholesale price. Retail would approach $2 a gallon. Diesel is also at a record high.
Wal-Mart will open 250 super centers next year.
The semiconductor index is down about 20% for the year. Advanced Micro Devices stated that their third quarter sales would be below their second quarter’s.
Jack Handey: "Whenever I see an old lady slip and fall on a wet sidewalk, my first instinct is to laugh. But then I think, what if I was an ant, and she fell on me. Then it wouldn’t seem quite so funny."
I wonder whether Philip Larkin had someone specific in mind. He stated
"They fuck you up, your mum and dad.
They may not mean to but they do.
They fill up with the faults they had
And add some extra, just for you."
We are making progress in Iraq. The death count mounts. The number of wounded continues to rise. The Fed states the soft patch in the economy is short lived. That’s funny. Challenger, Gray & Christmas stated there were 107,863 announced layoffs in September, 41% more than in September 2003 and 45% more than in August 2004. The latest September figures were the largest since January 2004 and brought this third quarter’s job cuts to 251,585 or about 20% higher than in the second quarter and 4% higher than the year ago September quarter. To make matters worse, only 16, 166 new job openings were announced in this September down from 132,105 in the prior month. John Challenger observed that "weak hiring announcements last month are not a good indication of stronger job creation to come." There was additional economic information to ashen the faces of the Fed policy members. The ISM’s measure of financial services, construction, retail, and other service jobs declined to 56.7 for September from the prior month’s 58.2 and was the lowest reading since May 2003. One should note that the services sector of the economy accounts for at least 80% of our GDP. The manufacturing sector accounts for about 12% of our economy and fell in September to 58.5, the lowest level in a year. In sum, the soft patch is not short lived and is, in fact, picking up steam. The lies abound.
We will witness slight of hand on Friday, the day the BLS revises the unemployment rolls and the unemployment rate. Sure jobs will have been added in construction and healthcare; however, in other areas, such as, hospitality and retail, it is difficult at best to make ends meet on that level of compensation. The BLS will bemoan the loss of jobs due to the hurricane in Florida. Remember Florida announced only 8,400 job losses could be attributed to the hurricanes. Lies will abound to assist Bush in his re-election bid. The facts will show that the job market is listless and that most companies are postponing decisions on hiring full-time employees with benefits. Revising the past to make the present rosier is simply an exercise in futility.
Albert Einstein: "I want to know God’s thoughts… the rest are details."
John Eisenhower, son of Dwight Eisenhower, and 186 former ambassadors, concluded "John Kerry has the experience, strength, and wisdom to lead us in fighting the war on terrorism, winning the peace in Iraq, making America more secure, and restoring America as the beacon of democracy and freedom in the world."
The Financial Times stated in an editorial that "the U.S. is the indebted superpower. …Active U.S. leadership is needed to promote changes in exchange rates and macro-economic policies around the globe. The dollar must fall further now if it is not to fall far more dramatically later on. As these adjustments begin, the U.S. current account deficit will begin to shrink, which will automatically stimulate the U.S. economy."
September unemployment in Germany rose by 27,000 from the August numbers and the jobless rate stands at 10.7%. Consumers have stopped buying and their exports are down.
The European service industry had its slowest growth in a year.
It is not surprising that crude is trading near $51 a barrel. U.S. oil production is at a 54-year low. U.S. retail gas prices at the pump are at a 4-mnth high. Heating oil hit a new record high of $1.40 per gallon. That is the wholesale price. Retail would approach $2 a gallon. Diesel is also at a record high.
Wal-Mart will open 250 super centers next year.
The semiconductor index is down about 20% for the year. Advanced Micro Devices stated that their third quarter sales would be below their second quarter’s.
Jack Handey: "Whenever I see an old lady slip and fall on a wet sidewalk, my first instinct is to laugh. But then I think, what if I was an ant, and she fell on me. Then it wouldn’t seem quite so funny."
I wonder whether Philip Larkin had someone specific in mind. He stated
"They fuck you up, your mum and dad.
They may not mean to but they do.
They fill up with the faults they had
And add some extra, just for you."
Tuesday, October 05, 2004
10/6/04 The Costs For Re-Election
Bush’s presidential bid for election is focused on fear, terror, and tax cuts. The invasion of Iraq is Bush’s chief liability, but the tax cuts are in second place.
Paul Bremer: " We never had enough troops on the ground (in Iraq)."
Our economy is consumer-based with 70% of our economy dependent on the consumer. According to a holiday buying survey by the NPD Group, nine out of 10 consumers stated they will spend the same or less when they shop for the holidays than they did in 2003. According to NPD’s chief industry analyst, a sluggish economy, a nagging labor market weakness, and higher gasoline prices are the culprits behind Americans planning to curb their holiday spending this year.
A soft patch continues at Wal-Mart. Their September same-store sales only rose 2.3%, and this is at the low end of expectations. I continue to believe that Wal-Mart is the very best consumer indicator, and right now there is a large yellow caution light flashing.
U.S. factory orders fell 0.1% in August, the first decline in four months. Orders for non-defense capital goods, excluding aircraft, fell 0.8% in August. That reflects a yellow caution light for future business investment.
The Bush tax cuts have not worked because increased state and local taxes plus the alternative minimum tax have offset those tax cuts. In addition, according to a study by the Harvard Joint Center for Housing Studies, average monthly household income has dropped in real terms, declining from $4,607 in 1999 to $4,385 (adjusted to 2003 dollars). In addition, the Urban Institute reported that the middle 20% of the of earners will get an average tax cut of $162 in 2005 while the top fifth of earners will get an average cut of $1317.
Ohio is third on the Tax Foundation’s list of states with the worst state and local tax burdens. Over the past four years, 237,000 jobs have been lost in Ohio.
Wisconsin has not backed a Republican presidential candidate since it went for Ronald Reagan in 1984. Bush is not Ronald Reagan.
Krispy Kreme will close its Ravenna, Ohio plant that employs about 75 workers. Its original glazed doughnut contains 22 carbs. U.S. Air will eliminate hundreds of management and nonunion jobs and impose wage and other cuts. Eastman Kodak will cut 870 jobs in the UK and France.
John Kerry: "The question is does he (Bush) really see and know what is going on in the lives of middle-class Americans, people struggling to get into the middle class, people who are fighting for survival."
Bush’s presidential bid for election is focused on fear, terror, and tax cuts. The invasion of Iraq is Bush’s chief liability, but the tax cuts are in second place.
Paul Bremer: " We never had enough troops on the ground (in Iraq)."
Our economy is consumer-based with 70% of our economy dependent on the consumer. According to a holiday buying survey by the NPD Group, nine out of 10 consumers stated they will spend the same or less when they shop for the holidays than they did in 2003. According to NPD’s chief industry analyst, a sluggish economy, a nagging labor market weakness, and higher gasoline prices are the culprits behind Americans planning to curb their holiday spending this year.
A soft patch continues at Wal-Mart. Their September same-store sales only rose 2.3%, and this is at the low end of expectations. I continue to believe that Wal-Mart is the very best consumer indicator, and right now there is a large yellow caution light flashing.
U.S. factory orders fell 0.1% in August, the first decline in four months. Orders for non-defense capital goods, excluding aircraft, fell 0.8% in August. That reflects a yellow caution light for future business investment.
The Bush tax cuts have not worked because increased state and local taxes plus the alternative minimum tax have offset those tax cuts. In addition, according to a study by the Harvard Joint Center for Housing Studies, average monthly household income has dropped in real terms, declining from $4,607 in 1999 to $4,385 (adjusted to 2003 dollars). In addition, the Urban Institute reported that the middle 20% of the of earners will get an average tax cut of $162 in 2005 while the top fifth of earners will get an average cut of $1317.
Ohio is third on the Tax Foundation’s list of states with the worst state and local tax burdens. Over the past four years, 237,000 jobs have been lost in Ohio.
Wisconsin has not backed a Republican presidential candidate since it went for Ronald Reagan in 1984. Bush is not Ronald Reagan.
Krispy Kreme will close its Ravenna, Ohio plant that employs about 75 workers. Its original glazed doughnut contains 22 carbs. U.S. Air will eliminate hundreds of management and nonunion jobs and impose wage and other cuts. Eastman Kodak will cut 870 jobs in the UK and France.
John Kerry: "The question is does he (Bush) really see and know what is going on in the lives of middle-class Americans, people struggling to get into the middle class, people who are fighting for survival."
Monday, October 04, 2004
10/4/04 The Gravest Danger
During the first debate it was opined that the gravest danger facing our nation is nuclear proliferation. Rather, I believe it is our ever-mounting debt levels.
Thomas Jefferson: "I, however, place economy among the first and most important republic virtues, and public debt is the greatest of the dangers to be feared."
Despite record low interest rates, in 2003 the U.S. government spent $318 billion of taxpayer money on interest payments to the holders of our national debt. In 2004, interest payments on the $7.4 trillion debt will exceed those paid in 2003. By comparison, $61 billion is spent on education. Interest is the third largest expense in the federal budget. The interest cost for each U.S. citizen will exceed $ 1,100 in 2004. When you go to the polls, think twice before you re-elect a fiscally irresponsible president. He has created the gravest danger to this generation and following generations. As Francois Rabelais observed, "debts and lies are generally mixed together."
If the Federal Reserve continues to raise interest rates, the interest on our national debt will mount and will contribute to higher deficit levels. Hopefully, the Fed is not banking on discretionary spending to decline. That will not happen with this administration.
World Bank President James Wolfensohn: "If we want stability on our planet, we must fight to end poverty."
ECB board member Ottmar Issing: "Oil prices have already had a visible, direct impact on prices in the euro area."
Prior to Operation Desert Shield in January, 1991, in November 1990 UN Resolution 678 authorized "all necessary means" to expel Iraq from Kuwait.
On October 23, 2004 our troops will have been fighting longer in Iraq than they did in WW I.
Georgia business bankruptcies have increased 16% and the state’s uninsured have risen to 1.4 million.
How are businesses coping with a double-digit increase in health care premiums again expected for next year? Many select health insurance with higher co-pays and deductibles; however, the latter are not tax deductible but premium dollars are.
Dick Cheney began his college education at Yale University. He went on to graduate from another institution.
During the first debate it was opined that the gravest danger facing our nation is nuclear proliferation. Rather, I believe it is our ever-mounting debt levels.
Thomas Jefferson: "I, however, place economy among the first and most important republic virtues, and public debt is the greatest of the dangers to be feared."
Despite record low interest rates, in 2003 the U.S. government spent $318 billion of taxpayer money on interest payments to the holders of our national debt. In 2004, interest payments on the $7.4 trillion debt will exceed those paid in 2003. By comparison, $61 billion is spent on education. Interest is the third largest expense in the federal budget. The interest cost for each U.S. citizen will exceed $ 1,100 in 2004. When you go to the polls, think twice before you re-elect a fiscally irresponsible president. He has created the gravest danger to this generation and following generations. As Francois Rabelais observed, "debts and lies are generally mixed together."
If the Federal Reserve continues to raise interest rates, the interest on our national debt will mount and will contribute to higher deficit levels. Hopefully, the Fed is not banking on discretionary spending to decline. That will not happen with this administration.
World Bank President James Wolfensohn: "If we want stability on our planet, we must fight to end poverty."
ECB board member Ottmar Issing: "Oil prices have already had a visible, direct impact on prices in the euro area."
Prior to Operation Desert Shield in January, 1991, in November 1990 UN Resolution 678 authorized "all necessary means" to expel Iraq from Kuwait.
On October 23, 2004 our troops will have been fighting longer in Iraq than they did in WW I.
Georgia business bankruptcies have increased 16% and the state’s uninsured have risen to 1.4 million.
How are businesses coping with a double-digit increase in health care premiums again expected for next year? Many select health insurance with higher co-pays and deductibles; however, the latter are not tax deductible but premium dollars are.
Dick Cheney began his college education at Yale University. He went on to graduate from another institution.
Sunday, October 03, 2004
10/3/04 The Unexpected
When surprises mount, one would expect increased volatility in the stock market. In fact, the opposite has taken place with the Vix, the CBOE volatility index, closing on Friday at its lowest level since 1996. Does this mean that stocks are about to erupt? I can’t say that, but I can say that, the expectation that volatility will remain this low, is quite unrealistic given the level of recent events taken in totality, such as, crude at $50 a barrel, gold at $421, the weak dollar, the mounting twin tower deficits, the first presidential debate, the monthly rising death rate in the Iraq war, the growing warnings on corporate earnings, the inability to pass on cost increases, the underemployment rate, 10-year Treasury bonds yielding close to 4%, the threat of a terrorist attack, and the ever-increasing list of millions of Americans without health care insurance. Those problems are not a recipe for complacency. Rather, they could most certainly lead to an unexpected and unwanted eruption.
Hiram Johnson: " The first casualty when war comes is truth."
In 2000, Bush lost Wisconsin to Gore by 5,708 votes or by an average of 80 people per county. Kevin Fetterer, age 42, a painting contractor and father of two, stated "unemployment may be down, but the new jobs being created aren’t ones you can support a family on." Celestica is closing its Chippewa Falls, Wisconsin plant and laying off 224 workers. Rockwell Automation will close its plant in Chippewa Valley and lay off 115 workers. Layoffs typically rise between October and November in Wisconsin as seasonal crop work ends and outdoor jobs taper off. Also, there’s a surge in layoffs around Thanksgiving each year as some employers close shop to accommodate the Wisconsin deer hunting season.
Drew Carey: "Oh, you hate your job? Why didn’t you say so? There’s a support group for that. It’s called EVERYBODY, and they meet at the bar."
The underemployment rate includes people too discouraged to actually seek work or have personal matters that interfere with a job search plus people working part-time because they couldn’t find full-time work or their hours were reduced. The underemployment rate stands at 9.5%, and 76% higher than our nation’s unemployment rate. There are about 4.5 million part-time workers, and the recent high point in 2003 was 4.8 million. This reflects an economic soft patch that has not been short-lived.
Sir Winston Churchill: "A lie gets halfway around the world before the truth has a chance to get its pants on."
Robert Mondavi Corp. announced the layoff of 360 employees or about one-third of its workforce.
Federal officials elevated Mt. St. Helens volcano alert to a Level 3, the highest possible, and issued a formal warning that an eruption was imminent. About 2,500 people were evacuated. It’s possible new gas-rich magma is involved, and that could create the potential for a lager eruption.
Warren Buffet: "We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful."
When surprises mount, one would expect increased volatility in the stock market. In fact, the opposite has taken place with the Vix, the CBOE volatility index, closing on Friday at its lowest level since 1996. Does this mean that stocks are about to erupt? I can’t say that, but I can say that, the expectation that volatility will remain this low, is quite unrealistic given the level of recent events taken in totality, such as, crude at $50 a barrel, gold at $421, the weak dollar, the mounting twin tower deficits, the first presidential debate, the monthly rising death rate in the Iraq war, the growing warnings on corporate earnings, the inability to pass on cost increases, the underemployment rate, 10-year Treasury bonds yielding close to 4%, the threat of a terrorist attack, and the ever-increasing list of millions of Americans without health care insurance. Those problems are not a recipe for complacency. Rather, they could most certainly lead to an unexpected and unwanted eruption.
Hiram Johnson: " The first casualty when war comes is truth."
In 2000, Bush lost Wisconsin to Gore by 5,708 votes or by an average of 80 people per county. Kevin Fetterer, age 42, a painting contractor and father of two, stated "unemployment may be down, but the new jobs being created aren’t ones you can support a family on." Celestica is closing its Chippewa Falls, Wisconsin plant and laying off 224 workers. Rockwell Automation will close its plant in Chippewa Valley and lay off 115 workers. Layoffs typically rise between October and November in Wisconsin as seasonal crop work ends and outdoor jobs taper off. Also, there’s a surge in layoffs around Thanksgiving each year as some employers close shop to accommodate the Wisconsin deer hunting season.
Drew Carey: "Oh, you hate your job? Why didn’t you say so? There’s a support group for that. It’s called EVERYBODY, and they meet at the bar."
The underemployment rate includes people too discouraged to actually seek work or have personal matters that interfere with a job search plus people working part-time because they couldn’t find full-time work or their hours were reduced. The underemployment rate stands at 9.5%, and 76% higher than our nation’s unemployment rate. There are about 4.5 million part-time workers, and the recent high point in 2003 was 4.8 million. This reflects an economic soft patch that has not been short-lived.
Sir Winston Churchill: "A lie gets halfway around the world before the truth has a chance to get its pants on."
Robert Mondavi Corp. announced the layoff of 360 employees or about one-third of its workforce.
Federal officials elevated Mt. St. Helens volcano alert to a Level 3, the highest possible, and issued a formal warning that an eruption was imminent. About 2,500 people were evacuated. It’s possible new gas-rich magma is involved, and that could create the potential for a lager eruption.
Warren Buffet: "We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful."
Saturday, October 02, 2004
10/2/04 It’s Hard Work
Lane Kirkland: "If hard work were such a wonderful thing, surely the rich would have kept it all to themselves."
Yesterday was the first day of the quarter and there must have been tremendous incentives to stimulate the buying on Wall Street. I know GM was not giving away new cars for free. I know it wasn’t because oil closed for the first time above $50 a barrel, or the yield on 10-year Treasury bonds had risen 20 basis points in a few days, or because Ichiro broke George Sisler’s record that has stood for 84 years, or that Mt. St. Helens erupted, or that commodities had a record week, or that gold closed above $420, or that natural gas for delivery next month is approaching $7 a thousand cubic feet, or that heating oil last year was 74 cents a gallon a year ago and is now almost $1.40, or that the inflation index is up 2.1% from a year earlier, or that the dollar fell to its lowest level against the euro since mid-July. It wasn’t because a G7 official opined there is "a recognition that oil reserves were scarcer than was thought a few years ago." It wasn’t because a U.S. government official stated almost 29% of daily output in the Gulf of Mexico remained shut down after Ivan, or that U.S. heating-oil inventories are 10% below normal after last month’s storms, or that, in the next three months, record daily demand is anticipated for heating, transportation, and factory fuels, or that the University of Michigan Consumer Confidence Index for September was much weaker at 94.2 than the consensus level of 96. It wasn’t because the latest ISM Prices Index indicated a significant upward pressure on prices, or that ISM’s New Orders Index declined 3.1 percentage points from 61.2 in August to 58.1 in September, or that ISM’s Supplier Deliveries Index registered 59.6 or 3.6 percentage points lower than August’s 63.2 percent, or that ISM’s Customers’ Index registered a monthly decline of 4 percentage points to 41.5, the 40th consecutive month the index has been below 50 percent, or that ISM’s New Export Orders Index declined 2.4 percentage points to 51.8 percent. Overall, there is a recent slowing in new orders and customers are maintaining smaller inventory levels. The customers are worrying more about demand than inflation. If it were the reverse, they would be stocking up on goods prior to price increases.
Billy Crystal: "Well the way things are going, aside from wheat and auto parts, America’s biggest export is now Oscar."
GM’s incentives rose 6.1% from August to September to $5,168 and increased 5.6% at Ford to $5,179 and decreased by $1 per vehicle to $4,861 at Chrysler. Toyota’s incentives are $3,506. The star performers were trucks due to large cash rebates. For the first nine months of 2004, even with growing rebates, GM’s share of the market still was a tenth of a percentage point less that it had in 2003. During the same period, Ford’s market share declined to 19.7% from 20.9%. It’s hard work.
Flip Wilson: "If you think nobody cares if you’re alive, try missing a couple of car payments."
Davy Crockett: "Remember that a government big enough to give you everything you want is also big enough to take away everything you have."
Burner Systems International is closing its Mansfield, Ohio plant and cutting 300 jobs. Wallace Computer Services is closing its San Luis Obispo labeling and printing plant and laying off 100 people. WestPointStevens will close its Long View, NC bedding plant and lay off 300 workers. Lawson Software will layoff 100 workers.
Recently, Boeing’s share price hit a new yearly high. Meanwhile, their third quarter plane deliveries only amounted to 67 (of which 49 are the 737) and that makes 218 for the first nine months of the year. They are right on schedule to have another lackluster year for making commercial jets. It’s hard work.
So why did the Dow rise 112 points, the Nasdaq 45, and the S&P 17 points yesterday? I don’t know. It’s hard work.
Governor Chou: "China’s forex regime could change on certain conditions but we need to do more preparation. It is impossible to do it now." It’s hard work.
Charlie McCarthy: "Hard work never killed anybody, but why take the chance?"
Author Kevin Phillips on Karl Rove: "He is the first strategist to elect a schmuck as president of the United States- to orchestrate the triumph of a relatively mediocre thinker who lost the popular vote and now has the chance to become a historical figure thanks to Osama bin Laden."
Lane Kirkland: "If hard work were such a wonderful thing, surely the rich would have kept it all to themselves."
Yesterday was the first day of the quarter and there must have been tremendous incentives to stimulate the buying on Wall Street. I know GM was not giving away new cars for free. I know it wasn’t because oil closed for the first time above $50 a barrel, or the yield on 10-year Treasury bonds had risen 20 basis points in a few days, or because Ichiro broke George Sisler’s record that has stood for 84 years, or that Mt. St. Helens erupted, or that commodities had a record week, or that gold closed above $420, or that natural gas for delivery next month is approaching $7 a thousand cubic feet, or that heating oil last year was 74 cents a gallon a year ago and is now almost $1.40, or that the inflation index is up 2.1% from a year earlier, or that the dollar fell to its lowest level against the euro since mid-July. It wasn’t because a G7 official opined there is "a recognition that oil reserves were scarcer than was thought a few years ago." It wasn’t because a U.S. government official stated almost 29% of daily output in the Gulf of Mexico remained shut down after Ivan, or that U.S. heating-oil inventories are 10% below normal after last month’s storms, or that, in the next three months, record daily demand is anticipated for heating, transportation, and factory fuels, or that the University of Michigan Consumer Confidence Index for September was much weaker at 94.2 than the consensus level of 96. It wasn’t because the latest ISM Prices Index indicated a significant upward pressure on prices, or that ISM’s New Orders Index declined 3.1 percentage points from 61.2 in August to 58.1 in September, or that ISM’s Supplier Deliveries Index registered 59.6 or 3.6 percentage points lower than August’s 63.2 percent, or that ISM’s Customers’ Index registered a monthly decline of 4 percentage points to 41.5, the 40th consecutive month the index has been below 50 percent, or that ISM’s New Export Orders Index declined 2.4 percentage points to 51.8 percent. Overall, there is a recent slowing in new orders and customers are maintaining smaller inventory levels. The customers are worrying more about demand than inflation. If it were the reverse, they would be stocking up on goods prior to price increases.
Billy Crystal: "Well the way things are going, aside from wheat and auto parts, America’s biggest export is now Oscar."
GM’s incentives rose 6.1% from August to September to $5,168 and increased 5.6% at Ford to $5,179 and decreased by $1 per vehicle to $4,861 at Chrysler. Toyota’s incentives are $3,506. The star performers were trucks due to large cash rebates. For the first nine months of 2004, even with growing rebates, GM’s share of the market still was a tenth of a percentage point less that it had in 2003. During the same period, Ford’s market share declined to 19.7% from 20.9%. It’s hard work.
Flip Wilson: "If you think nobody cares if you’re alive, try missing a couple of car payments."
Davy Crockett: "Remember that a government big enough to give you everything you want is also big enough to take away everything you have."
Burner Systems International is closing its Mansfield, Ohio plant and cutting 300 jobs. Wallace Computer Services is closing its San Luis Obispo labeling and printing plant and laying off 100 people. WestPointStevens will close its Long View, NC bedding plant and lay off 300 workers. Lawson Software will layoff 100 workers.
Recently, Boeing’s share price hit a new yearly high. Meanwhile, their third quarter plane deliveries only amounted to 67 (of which 49 are the 737) and that makes 218 for the first nine months of the year. They are right on schedule to have another lackluster year for making commercial jets. It’s hard work.
So why did the Dow rise 112 points, the Nasdaq 45, and the S&P 17 points yesterday? I don’t know. It’s hard work.
Governor Chou: "China’s forex regime could change on certain conditions but we need to do more preparation. It is impossible to do it now." It’s hard work.
Charlie McCarthy: "Hard work never killed anybody, but why take the chance?"
Author Kevin Phillips on Karl Rove: "He is the first strategist to elect a schmuck as president of the United States- to orchestrate the triumph of a relatively mediocre thinker who lost the popular vote and now has the chance to become a historical figure thanks to Osama bin Laden."
Friday, October 01, 2004
10/1/04 Will It Be A Red October?
Yesterday, a volcano warning was issued for Mt. St. Helens. Experts on the scene stated there is a 70% chance of at least a small eruption. At tradesports.com 63% have their money on Bush for president. I wonder what the chances are of that bet erupting?
According to the Pentagon, 42 U.S. service members were killed in Iraq in June, 54 in July, 66 in August, and at least 76 in September. Since the invasion, at least 1,052 have been killed and approximately 7,500 wounded. Ted Carpenter of the Cato Institute opined "I think we’re losing slowly but steadily. I think we’re sinking deeper into the quick sand."
Dick Cheney: "We will, in fact, be greeted as liberators."
Craig Kilborn: "This was nice, President Bush wished the Iraqis God’s grace on their road to democracy. And then Vice President Cheney told them to go F-themselves."
Nortel to cut 3,250 jobs. Pepsico to close 4 Frito Lay plants- Council Bluffs, IA, Allen Park, MI, Beaverton, OR, and Visalia, CA- and eliminate 780 positions. Two Chelsea Industries located in Kentucky will close by the end of October and 109 employees will lose their jobs. Capital One will close an Irving, TX call center and cut 220 workers. The Chicago Transit Authority’s proposed doomsday budget would cut 1,000 union workers.
Gen. Douglas MacArthur: "There is no security on this earth; there is only opportunity."
Merck traded at an 8-year low. The company’s Vioxx drug was approved for sale in 1999 and currently there are 2.5 million users. With sales exceeding $2 billion a year, it accounts for 20% of Merck’s profits. Yesterday the company pulled the drug off the market. It was a heavy blow to the company’s reputation, to the bottom line, and to its stockholders. Merck has had a terrific history. Hopefully, its future will be equally bright. Frequently, opportunity exists in unsettled times.
In the latest reading, consumer spending was flat and the pace of savings picked up. As the population ages, that trend, I believe, will be the norm.
The Labor Department stated that last week’s rise in the unemployment numbers was due to the hurricanes in Florida. I guess the recent rise in plant closings had nothing to do with it.
Last night Bush stated he is a decisive leader and that he made the tough decision to invade Iraq "because the enemy attacked us." Kerry reminded Bush that bin Laden not Iraq attacked us. Laura Bush must have been relieved to hear her husband state "I knew that."
Yesterday, a volcano warning was issued for Mt. St. Helens. Experts on the scene stated there is a 70% chance of at least a small eruption. At tradesports.com 63% have their money on Bush for president. I wonder what the chances are of that bet erupting?
According to the Pentagon, 42 U.S. service members were killed in Iraq in June, 54 in July, 66 in August, and at least 76 in September. Since the invasion, at least 1,052 have been killed and approximately 7,500 wounded. Ted Carpenter of the Cato Institute opined "I think we’re losing slowly but steadily. I think we’re sinking deeper into the quick sand."
Dick Cheney: "We will, in fact, be greeted as liberators."
Craig Kilborn: "This was nice, President Bush wished the Iraqis God’s grace on their road to democracy. And then Vice President Cheney told them to go F-themselves."
Nortel to cut 3,250 jobs. Pepsico to close 4 Frito Lay plants- Council Bluffs, IA, Allen Park, MI, Beaverton, OR, and Visalia, CA- and eliminate 780 positions. Two Chelsea Industries located in Kentucky will close by the end of October and 109 employees will lose their jobs. Capital One will close an Irving, TX call center and cut 220 workers. The Chicago Transit Authority’s proposed doomsday budget would cut 1,000 union workers.
Gen. Douglas MacArthur: "There is no security on this earth; there is only opportunity."
Merck traded at an 8-year low. The company’s Vioxx drug was approved for sale in 1999 and currently there are 2.5 million users. With sales exceeding $2 billion a year, it accounts for 20% of Merck’s profits. Yesterday the company pulled the drug off the market. It was a heavy blow to the company’s reputation, to the bottom line, and to its stockholders. Merck has had a terrific history. Hopefully, its future will be equally bright. Frequently, opportunity exists in unsettled times.
In the latest reading, consumer spending was flat and the pace of savings picked up. As the population ages, that trend, I believe, will be the norm.
The Labor Department stated that last week’s rise in the unemployment numbers was due to the hurricanes in Florida. I guess the recent rise in plant closings had nothing to do with it.
Last night Bush stated he is a decisive leader and that he made the tough decision to invade Iraq "because the enemy attacked us." Kerry reminded Bush that bin Laden not Iraq attacked us. Laura Bush must have been relieved to hear her husband state "I knew that."
Wednesday, September 29, 2004
9/30/04 Mom Would Have Been 88 Today
This didn't take any guts. Pimco's Gross suggested selling positions in the 10-year Treasury bonds. Holders have big profits and you can't get hurt taking a profit. After all, the U.S. Treasury auctioned off $24 billion in 2-year notes at a yield of 2.60% or about a 1.44 differential with the 10-year paper. Maybe one should ask why there is a bubble in the 10-year. We have record deficits and require large daily funding from foreign sources. Our dollar is weak and the Administration has promoted a weak dollar to spur exports. The purchasing power of our citizens has suffered. Bubbles can last for a long time. Look at home prices. Consider the bubble in dot com stocks. Look at a chart on the Nasdaq. Our 10-year Treasury bonds are a resting place for petrodollars and for dollars coming back from China and Japan for their exports into the U.S. It's not to be nice. It's to keep the game going. The game is the recycling of dollars. We end up with less and less and foreigners lend us the dollars they received through their exports into the U.S. Soon we will be living in a country where the debt holders control us. That's what almost 4 years of Bush has brought us. That is a fear factor. That's real, and it's a code red. You can go to the bank on that- but make it one in Switzerland.
Mark Twain: "In the long run there is more terror in threats than in execution, for when you get use to terror, your emotions get dulled." I hope the voters understand this.
Plato: "Only the dead have seen the end of the war."
Bush & Company have a clear agenda. It's simple. The Iraq war is part of the war on terror. Never mind the WMD that didn't exist and the lies that were told to get the official backing to the Iraq war. That's all over now- except for the dead and the wounded and the families who are left with the tragedies. Their war continues and continues and continues. Mourning does not end.
Second quarter GDP was revised upward to 3.3%. It takes 89 days to revise the prior quarter. It must be difficult assembling information on exports, imports, and inventories. Maybe we should hire some more government workers. Just a bad joke.
Paul Wilkinson: "Fighting terrorism is like being a goalkeeper. You can make a hundred brilliant saves but the only shot that people remember is the one that gets past you."
Belo Corp. to cut 250 jobs. Many of the positions eliminated will be at the Dallas Morning News.
The joke of the week: Chief executive officers of GM, Ford, and Chrysler asked Treasury Secretary John Snow to urge Japan not to resume yen sales that they say unfairly make Japanese cars less expensive in the U.S. Maybe the consumer prefers the Japanese cars, such as, those made by Toyota.
The dome at Mt. St. Helens was raised to the second highest danger alert level. The local officials didn't even ask Homeland Security for permission. My faith in the human race has taken a leap forward.
Jay Leno: "The reason there are two senators for each state is so that one can be the designated driver.
This didn't take any guts. Pimco's Gross suggested selling positions in the 10-year Treasury bonds. Holders have big profits and you can't get hurt taking a profit. After all, the U.S. Treasury auctioned off $24 billion in 2-year notes at a yield of 2.60% or about a 1.44 differential with the 10-year paper. Maybe one should ask why there is a bubble in the 10-year. We have record deficits and require large daily funding from foreign sources. Our dollar is weak and the Administration has promoted a weak dollar to spur exports. The purchasing power of our citizens has suffered. Bubbles can last for a long time. Look at home prices. Consider the bubble in dot com stocks. Look at a chart on the Nasdaq. Our 10-year Treasury bonds are a resting place for petrodollars and for dollars coming back from China and Japan for their exports into the U.S. It's not to be nice. It's to keep the game going. The game is the recycling of dollars. We end up with less and less and foreigners lend us the dollars they received through their exports into the U.S. Soon we will be living in a country where the debt holders control us. That's what almost 4 years of Bush has brought us. That is a fear factor. That's real, and it's a code red. You can go to the bank on that- but make it one in Switzerland.
Mark Twain: "In the long run there is more terror in threats than in execution, for when you get use to terror, your emotions get dulled." I hope the voters understand this.
Plato: "Only the dead have seen the end of the war."
Bush & Company have a clear agenda. It's simple. The Iraq war is part of the war on terror. Never mind the WMD that didn't exist and the lies that were told to get the official backing to the Iraq war. That's all over now- except for the dead and the wounded and the families who are left with the tragedies. Their war continues and continues and continues. Mourning does not end.
Second quarter GDP was revised upward to 3.3%. It takes 89 days to revise the prior quarter. It must be difficult assembling information on exports, imports, and inventories. Maybe we should hire some more government workers. Just a bad joke.
Paul Wilkinson: "Fighting terrorism is like being a goalkeeper. You can make a hundred brilliant saves but the only shot that people remember is the one that gets past you."
Belo Corp. to cut 250 jobs. Many of the positions eliminated will be at the Dallas Morning News.
The joke of the week: Chief executive officers of GM, Ford, and Chrysler asked Treasury Secretary John Snow to urge Japan not to resume yen sales that they say unfairly make Japanese cars less expensive in the U.S. Maybe the consumer prefers the Japanese cars, such as, those made by Toyota.
The dome at Mt. St. Helens was raised to the second highest danger alert level. The local officials didn't even ask Homeland Security for permission. My faith in the human race has taken a leap forward.
Jay Leno: "The reason there are two senators for each state is so that one can be the designated driver.
9/29/04 Fear Factor
Lloyd Douglas: "If a man harbors any sort of fear, it makes him landlord to a ghost."
Bush is ahead in almost every poll. He is running on the fear factor. His is the administration of raising the homeland security alert. Maybe the fear represents more than that like fear of losing a job; fear of not getting a job; fear of losing benefits; fear of not afffording health insurance; fear of losing one's pension; fear of not having sufficient federal funds for medicare; fear that foreign countries won't give us the necessary $2 billion per day to make up the daily budget gap; fear of losing your constitutional liberties; fear that the killing and the wounded lists in Iraq will continue to mount for years to come; and fear that these two presidential candidates are the best America has to offer. The choice sucks.
Helen Keller: "Avoiding danger is no safer in the long run than outright exposure. The fearful are caught as often as the bold."
September U.S. consumer confidence fell to 96.8 from the prior month's 98.7. Attitudes about the current economic situation fell to 95.5 from 100.7 The number of consumers who believed jobs are plentiful declined in September to 16.8% from 18.4% while those who found jobs hard to get increased to 28.3% from 26%.
Teddy Roosevelt: "the only limit to our realization of tomorrow will be our doubts about reality."
Pliant Corp. is closing its Burrillville, R.I. plastics plant and eliminating 60 jobs. VF Corp. is closing two sewing plants in El Paso and laying off 1,035 workers. La Crosse Footwear is closing its Claremont, NH plant and laying off 70 employees. J&J is closing its Royston, GA plant and laying off 300 workers. Russ Berrie is cutting 75 jobs. Computer Associates is cutting 800 jobs. No wonder consumer confidence is waning. Delta Airlines is cutting executive and employee pay by 10%.
Lenny Bruce: " If Jesus had been killed 20 years ago, Catholic school children would be wearing little electric chairs around their necks instead of crosses."
Lloyd Douglas: "If a man harbors any sort of fear, it makes him landlord to a ghost."
Bush is ahead in almost every poll. He is running on the fear factor. His is the administration of raising the homeland security alert. Maybe the fear represents more than that like fear of losing a job; fear of not getting a job; fear of losing benefits; fear of not afffording health insurance; fear of losing one's pension; fear of not having sufficient federal funds for medicare; fear that foreign countries won't give us the necessary $2 billion per day to make up the daily budget gap; fear of losing your constitutional liberties; fear that the killing and the wounded lists in Iraq will continue to mount for years to come; and fear that these two presidential candidates are the best America has to offer. The choice sucks.
Helen Keller: "Avoiding danger is no safer in the long run than outright exposure. The fearful are caught as often as the bold."
September U.S. consumer confidence fell to 96.8 from the prior month's 98.7. Attitudes about the current economic situation fell to 95.5 from 100.7 The number of consumers who believed jobs are plentiful declined in September to 16.8% from 18.4% while those who found jobs hard to get increased to 28.3% from 26%.
Teddy Roosevelt: "the only limit to our realization of tomorrow will be our doubts about reality."
Pliant Corp. is closing its Burrillville, R.I. plastics plant and eliminating 60 jobs. VF Corp. is closing two sewing plants in El Paso and laying off 1,035 workers. La Crosse Footwear is closing its Claremont, NH plant and laying off 70 employees. J&J is closing its Royston, GA plant and laying off 300 workers. Russ Berrie is cutting 75 jobs. Computer Associates is cutting 800 jobs. No wonder consumer confidence is waning. Delta Airlines is cutting executive and employee pay by 10%.
Lenny Bruce: " If Jesus had been killed 20 years ago, Catholic school children would be wearing little electric chairs around their necks instead of crosses."
Monday, September 27, 2004
9/28/04 Home Prices Are Falling--Finally! As 10-year Treasury bonds traded below 4% and the Dow inched downward to the 10,000 level, the U.S. August median price for a new home declined from July's $214,400 to $208,900, a drop of almost 11.7% in just one month. Of course, a single month does not make a trend; however,there was more information released. New home sales are down 0.4% year-over-year and the number of new homes for sale increased to 404,000, the highest number in 25 years. This is taking place during a month of declining mortgage rates. What would happen if there had been an increase? The headlines read a good bit differently- that frequently takes place with July new home sales revised downward by 52,000 units to 1.082 million; however, August results jumped9.4% to 1.184 million. Without the change in July, theincrease for last month would have been 50,000 unitsor a rise of 4.4%. I think we should re-visit thissubject in another month and see whether the resultsare similar to August's numbers. The CEO of Volkswagen, Europe's largest carmaker, predicted a flat Western European market in 2005. Harry Truman: "Never kick a fresh turd on a hot day." There have already been over 600 earnings warnings for the third quarter. Companies frequently blame the weather, higher energy prices, and higher unit labor costs. Managements might consider an additional reason- the topline growth is puny in most cases. Should Bush win the election, many money managers are looking for a Bush market bounce. Since Bush arrived at the White House in January 2001, the indices haven't exactly been kind to investors. Maybe the aforementioned money managers have grown accustomed to below-par results. A three-day auto clearance sale begins today. Despite heavy discounting, I still do not expect much of a pick-up for GM or Ford. On Friday, Commerce One said it woud lay off 56 employees. The company is left with $300,000 in cash. The Atlanta Braves won their 13th Division Title in a row. AT&T cut 140 call center jobs in Fairhaven, Mass. Thecompany is closing its customer service center in Charleston, W.Va., eliminating nearly 300 jobs. In addition, they are closing call centers in Hawaii and Puerto Rico. Knight Ridder's Nancy Youssef wrote that, since April, U.S. air strikes in Iraq have killed twice as many Iraqis (including many civilian bystanders) than those at the hands of nationalist guerrillas. Crude closed at a record $49.64 a barrel, and in evening hours traded at $50. Steve Allen: "The hair is real; it's the head that's fake."
U.S. retail gas prices at the pump rose 5 cents last week to $1.96 per gallon on average.
Walter Williams, professor emeritus at the University of Washington's Daniel J. Evans School of Public Affairs: "Bush's dismal policy failures in tax cuts and Iraq are being sold as achievements- and apparently being bought by large numbers of the public."
U.S. retail gas prices at the pump rose 5 cents last week to $1.96 per gallon on average.
Walter Williams, professor emeritus at the University of Washington's Daniel J. Evans School of Public Affairs: "Bush's dismal policy failures in tax cuts and Iraq are being sold as achievements- and apparently being bought by large numbers of the public."
9/27/04 Malfunctioning Traffic Signals
Beware at intersections. Jeanne has left malfunctioning traffic signals in its wake. Over a million residents remain without power.
On Saturday and Sunday there were more than 10 quakes below the dome on Mt. St. Helens ranging from 2.0 to 2.8, the most in a 24-hour period since the eruption in October 1986. Seismologists suggest there could be a small explosion soon.
How will Fannie Mae's accounting troubles impact the housing market and the economy? Will it be simply a small explosion? Maybe we should ask a seismologist rather than the Wall Street experts.
Colin Powell: "We have seen an increase in anti-Americanism in the Muslim world...we are fighting an intense insurgency. Yes, it's getting worse." That sounds a bit different from the message Bush has been delivering to the American people. Why am I not surprised?
Crude is trading at $49.37 a barrel.
If you visit Florida, bring bug repellent. Jeanne has left such wet conditions that mosquitos are loving every minute of it.
For the first time in 27 years, the San Francisco 49ers did not score any points yesterday. For the first time since 1969, the Miami Dolphins began the season with a 0-3 record.
At the Electric Drive Transportation conference last week, experts stated fuel cell cars are 15 years off.
Donald T. Terry, a senior InterAmerican Development Bank official, stated that about $38 billion was sent to Latin American and Caribbean countries in 2003- mostly from the U.S. He expects the total to reach $45 billion in 2004. Interestingly, Latin America and the Caribbean received $29 billion in foreign aid and foreign investment combined in 2003. The IDB said the average wire transfer is $235, and that overall, 10% of Latin American and Caribbean residents receive remittances each year.
Elaine Worzala, professor of real estate at the University of San Diego: "A lot of people are already spending 50% of their income on their mortgage payment. If the interest rates go up, they're all of a sudden very cash poor, putting themselves in a position where they have to default on their loan and lose their house." As Dan Ruiz, a mortgage broker remarked, "what's the incentive of staying if you have no equity?"
Beware at intersections. Jeanne has left malfunctioning traffic signals in its wake. Over a million residents remain without power.
On Saturday and Sunday there were more than 10 quakes below the dome on Mt. St. Helens ranging from 2.0 to 2.8, the most in a 24-hour period since the eruption in October 1986. Seismologists suggest there could be a small explosion soon.
How will Fannie Mae's accounting troubles impact the housing market and the economy? Will it be simply a small explosion? Maybe we should ask a seismologist rather than the Wall Street experts.
Colin Powell: "We have seen an increase in anti-Americanism in the Muslim world...we are fighting an intense insurgency. Yes, it's getting worse." That sounds a bit different from the message Bush has been delivering to the American people. Why am I not surprised?
Crude is trading at $49.37 a barrel.
If you visit Florida, bring bug repellent. Jeanne has left such wet conditions that mosquitos are loving every minute of it.
For the first time in 27 years, the San Francisco 49ers did not score any points yesterday. For the first time since 1969, the Miami Dolphins began the season with a 0-3 record.
At the Electric Drive Transportation conference last week, experts stated fuel cell cars are 15 years off.
Donald T. Terry, a senior InterAmerican Development Bank official, stated that about $38 billion was sent to Latin American and Caribbean countries in 2003- mostly from the U.S. He expects the total to reach $45 billion in 2004. Interestingly, Latin America and the Caribbean received $29 billion in foreign aid and foreign investment combined in 2003. The IDB said the average wire transfer is $235, and that overall, 10% of Latin American and Caribbean residents receive remittances each year.
Elaine Worzala, professor of real estate at the University of San Diego: "A lot of people are already spending 50% of their income on their mortgage payment. If the interest rates go up, they're all of a sudden very cash poor, putting themselves in a position where they have to default on their loan and lose their house." As Dan Ruiz, a mortgage broker remarked, "what's the incentive of staying if you have no equity?"
Sunday, September 26, 2004
9/26/04 Records Are Made To Be Broken
Analysts will provide the average rate for investment returns and/or interest rates over time and provide a caveat comprised of a standard deviation. It looks great on paper until the ways of nature are placed into the mix. The last time four large storms occurred within six weeks was in Texas in 1886; however, with Jeanne, as Max Mayfield, director of the National Hurricane Center in Miami observed, it was the "first time ever that we know of that two hurricanes landed so close (2 miles) in place and time." As the adage goes, and without standard deviation, there's no avoiding death or taxes except maybe taxes for the likes of GE and dozens like it.
Sandra Carey: "Never mistake knowledge for wisdom. One helps you make a living, the other helps you make a life."
To survive a hurricane, communities provide get ready checklists that include all the items you should have handy. Unfortunately, the list does not provide a solution to the following: thousands are still without phone service from hurricane Frances; Florida Power & Light warned that customers seriously damaged by Jeanne may have to wait up to three weeks or more to get power. The company faced Jeanne with far fewer outside repair crews than were available at the start of Frances; the hurricanes have impacted the ability to obtain homeowners' insurance since most insurers do not write policies when a hurricane threatens; and real estate closings have been impacted by property re-inspections for repairs.
Prior to the storm arriving late last night, emergency measures were instituted: there were mandatory evacuations of at least two million people; curfews were put into place; bridges were closed; airports were shut down; malls closed around noon but Home Depot and Lowe's remained open to provide necessary supplies; people moved themselves away from coastlines, and all hotel rooms west of I 95 in Broward county, for example, were booked. This morning most residents in Palm Beach County are without power but in Broward county only about 80,000. It was only until 48 hours ago that most residents truly took the potential brunt of Jeanne seriously. How could 4 storms take place in such a short time? After all, standard deviation indicates this should not happen. Records are made to be broken.
Albert Einstein: "Look deep, deep into nature, and then you will understand everything better."
Analysts will provide the average rate for investment returns and/or interest rates over time and provide a caveat comprised of a standard deviation. It looks great on paper until the ways of nature are placed into the mix. The last time four large storms occurred within six weeks was in Texas in 1886; however, with Jeanne, as Max Mayfield, director of the National Hurricane Center in Miami observed, it was the "first time ever that we know of that two hurricanes landed so close (2 miles) in place and time." As the adage goes, and without standard deviation, there's no avoiding death or taxes except maybe taxes for the likes of GE and dozens like it.
Sandra Carey: "Never mistake knowledge for wisdom. One helps you make a living, the other helps you make a life."
To survive a hurricane, communities provide get ready checklists that include all the items you should have handy. Unfortunately, the list does not provide a solution to the following: thousands are still without phone service from hurricane Frances; Florida Power & Light warned that customers seriously damaged by Jeanne may have to wait up to three weeks or more to get power. The company faced Jeanne with far fewer outside repair crews than were available at the start of Frances; the hurricanes have impacted the ability to obtain homeowners' insurance since most insurers do not write policies when a hurricane threatens; and real estate closings have been impacted by property re-inspections for repairs.
Prior to the storm arriving late last night, emergency measures were instituted: there were mandatory evacuations of at least two million people; curfews were put into place; bridges were closed; airports were shut down; malls closed around noon but Home Depot and Lowe's remained open to provide necessary supplies; people moved themselves away from coastlines, and all hotel rooms west of I 95 in Broward county, for example, were booked. This morning most residents in Palm Beach County are without power but in Broward county only about 80,000. It was only until 48 hours ago that most residents truly took the potential brunt of Jeanne seriously. How could 4 storms take place in such a short time? After all, standard deviation indicates this should not happen. Records are made to be broken.
Albert Einstein: "Look deep, deep into nature, and then you will understand everything better."
Friday, September 24, 2004
9/25/04 No End In Sight
The Economic Cycle Research Institute's director of research, Anirvan Banerji, stated "the ECRI and its growth rate have been essentially flat for a couple of months, after falling sharply starting in the spring. That suggests that the economic slowdown we are now seeing is real and there is no end in sight."
According to the weekly index compiled by the Economic Cycle Research Institute, the ECRI index fell 0.3% last week, the eighth consecutive weekly decline.
Economy.com's Sophia Koropeckys: "Rising oil prices and geo-political concerns as well as high pension and healthcare costs seem to be constraining hiring. Business confidence remains fragile despite strong profitability and cash flow."
Jared Bernstein: "Whenever you see a spike in self-employment in this kind of economy, you know that it is involuntary entrepreneurship."
Lyndon B. Johnson: "Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else."
According to the Northwest Federation of Community Organizations, more than a quarter of the job openings in Washington state pay less than $20,942 a year, the minimum income needed by a single adult to cover rent, health insurance, food, and transportation. In addition, 77% of job openings statewide paid less than a single parent with two children would need to earn at least $43,608 to make ends meet in Washington.
Agere will announce "material" job cuts next week. Miramax to cut workforce by another 13% or 55 employees.
The yield curve experienced a significant flattening this week. The spread between 2-year and 10-year Treasury bonds narrowed to 145 basis points. Some might suggest that indicates very modest levels of inflation. Some might suggest it indicates slower growth. Others believe it reflects an economy on firmer footing, and therefore, the Fed will continue to raise short-term rates and that places pressure on the 2-year bonds. Let me state that, for the last eight trading days, this spread has narrowed. At the end of 2003, the spread was 242 basis points. After subtracting core consumer prices that rose 1.7% over the past 12 months, the 10-year bond would yield 2.33%. Over the last 10 years, the real yield has averaged about 3.25%. It would be, in my view, a serious mistake for the Fed to tighten again. Consumer spending, job creation, and real salaries and wages are disappointing. With crude closing at a new record high of $48.88 per barrel, the economy doesn't need more headwinds.
U.S. August existing home sales fell 2.7% to 6.54 million, the second consecutive month of declining sales. Average U.S. home prices have risen 24% since 2001 or much faster than wages, and this has created eroding affordability.
The headlines for August durable goods showed that orders dropped 0.5% but increased 2.3% when orders for planes were excluded. Some large shifts took place between July and August. In July Boeing booked orders for 75 planes. In August the bookings dropped to 20. Orders for core capital goods excluding defense and civilian aircraft fell 0.5% in August after gaining 0.6% in July. Core capital goods are a good indicator of demand for investment goods. On the other hand, shipments for the month rose 1.4%, and business was particularly strong for communications equipment. Interestingly, shipments for machinery fell 1.1%. A big swing were orders for autos that climbed 5.7%. The month before they declined 4.5%. Orders for defense capital goods increased 4.5% while shipments increased 1.5%. Additionally, unfilled orders for August increased 0.3%, while inventories rose 0.6%. As economist Robert Brusca stated, "the report is pretty firm but it does not point to much job growth ahead." Morgan Stanley lowered their forecast for September job creation to 100,000. Some brokerage firms raised their estimate for 3rd quarter GDP growth and some lowered their projections.
Since the invasion of Iraq, 1,040 U.S. service members have been killed and close to 7,500 have been wounded.
Philip Stevens of the Financial Times: "By any objective measure America stands on the brink of strategic failure in Iraq, but the U.S. president is fighting an election. So, at every turn, loud determination defies grim reality... the rising death toll of innocent civilians, the pitiless barbarism of the hostage-takers led by Abu Musab al-Zarqawi and the impotence of an American military increasingly confined to its fortified bases bear daily witness to the gathering catastrophe in Iraq."
Ronald Reagan: "History teaches that war begins when governments believe the price of aggresssion is cheap."
The Economic Cycle Research Institute's director of research, Anirvan Banerji, stated "the ECRI and its growth rate have been essentially flat for a couple of months, after falling sharply starting in the spring. That suggests that the economic slowdown we are now seeing is real and there is no end in sight."
According to the weekly index compiled by the Economic Cycle Research Institute, the ECRI index fell 0.3% last week, the eighth consecutive weekly decline.
Economy.com's Sophia Koropeckys: "Rising oil prices and geo-political concerns as well as high pension and healthcare costs seem to be constraining hiring. Business confidence remains fragile despite strong profitability and cash flow."
Jared Bernstein: "Whenever you see a spike in self-employment in this kind of economy, you know that it is involuntary entrepreneurship."
Lyndon B. Johnson: "Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else."
According to the Northwest Federation of Community Organizations, more than a quarter of the job openings in Washington state pay less than $20,942 a year, the minimum income needed by a single adult to cover rent, health insurance, food, and transportation. In addition, 77% of job openings statewide paid less than a single parent with two children would need to earn at least $43,608 to make ends meet in Washington.
Agere will announce "material" job cuts next week. Miramax to cut workforce by another 13% or 55 employees.
The yield curve experienced a significant flattening this week. The spread between 2-year and 10-year Treasury bonds narrowed to 145 basis points. Some might suggest that indicates very modest levels of inflation. Some might suggest it indicates slower growth. Others believe it reflects an economy on firmer footing, and therefore, the Fed will continue to raise short-term rates and that places pressure on the 2-year bonds. Let me state that, for the last eight trading days, this spread has narrowed. At the end of 2003, the spread was 242 basis points. After subtracting core consumer prices that rose 1.7% over the past 12 months, the 10-year bond would yield 2.33%. Over the last 10 years, the real yield has averaged about 3.25%. It would be, in my view, a serious mistake for the Fed to tighten again. Consumer spending, job creation, and real salaries and wages are disappointing. With crude closing at a new record high of $48.88 per barrel, the economy doesn't need more headwinds.
U.S. August existing home sales fell 2.7% to 6.54 million, the second consecutive month of declining sales. Average U.S. home prices have risen 24% since 2001 or much faster than wages, and this has created eroding affordability.
The headlines for August durable goods showed that orders dropped 0.5% but increased 2.3% when orders for planes were excluded. Some large shifts took place between July and August. In July Boeing booked orders for 75 planes. In August the bookings dropped to 20. Orders for core capital goods excluding defense and civilian aircraft fell 0.5% in August after gaining 0.6% in July. Core capital goods are a good indicator of demand for investment goods. On the other hand, shipments for the month rose 1.4%, and business was particularly strong for communications equipment. Interestingly, shipments for machinery fell 1.1%. A big swing were orders for autos that climbed 5.7%. The month before they declined 4.5%. Orders for defense capital goods increased 4.5% while shipments increased 1.5%. Additionally, unfilled orders for August increased 0.3%, while inventories rose 0.6%. As economist Robert Brusca stated, "the report is pretty firm but it does not point to much job growth ahead." Morgan Stanley lowered their forecast for September job creation to 100,000. Some brokerage firms raised their estimate for 3rd quarter GDP growth and some lowered their projections.
Since the invasion of Iraq, 1,040 U.S. service members have been killed and close to 7,500 have been wounded.
Philip Stevens of the Financial Times: "By any objective measure America stands on the brink of strategic failure in Iraq, but the U.S. president is fighting an election. So, at every turn, loud determination defies grim reality... the rising death toll of innocent civilians, the pitiless barbarism of the hostage-takers led by Abu Musab al-Zarqawi and the impotence of an American military increasingly confined to its fortified bases bear daily witness to the gathering catastrophe in Iraq."
Ronald Reagan: "History teaches that war begins when governments believe the price of aggresssion is cheap."
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.
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.
Subscribe to:
Posts (Atom)