11/12/04 Something Has To Give
The share of the economy accounted for by corporate profits is the highest since 1929. On the other side of the spectrum, the worker’s share of 45.7% is at the lowest level since the beginning of the Depression. This disparity is not long for this world.
According to a study by Robert Arnott in the latest issue of the Financial Analysts Journal, the average U.S. pension fund is using an average yearly return assumption of 8.5%, and public pension funds are assuming a return of 8%. Unfortunately, rose-colored glasses don’t create returns, and ignoring valuation effects, the above-mentioned returns have never been achieved over a 10-year period since 1871. Rather, the range averages 5.7% with a standard deviation of 1.3%. In reality, the pension funds will need to cough up more contributions.
According to Edmunds.com, total U.S. market share for domestic vehicles fell to 56.5% in October, the lowest in recorded history. Keep those incentives coming. Unfortunately, they aren’t working.
In Germany, an estimated 20% of shoppers say they will not buy U.S. products. So much for nation building.
According to a new survey by American Affluence Research Center, the wealthiest 11 million households show declining optimism in their 12-month outlook. The survey participants have an average income of $329,000 and an average net worth of almost $3 million. They control 70% of the private wealth in the U.S. An increasing percentage is showing concern about business conditions, the stock market, and their own personal household income 12 months from now. The overall index for these three factors continued a decline that began 6 months ago and is now back to the Fall 2002 level, the record low for these surveys.
Armstrong Corp. announced the closing of their 60-year-old plant in Marietta, PA, throwing 440 out of work.
Not surprisingly, shares of Microsoft made a new yearly high this morning. Today is the last day to buy shares and get the $3 dividend. The price rise does not take into account the company’s slowing sales picture for this fiscal year. Increasing effort is being placed on cost cutting. Microsoft has about 625 employees working in Hyderabad, India. Next week, they are breaking ground on a 250,000 square foot building that will double the size of its new facilities in Hyderabad, which are scheduled to open in January. At present, Microsoft has 57,000 employees world-wide. One can expect their presence in India to become more important.
Thursday, November 11, 2004
11/11/04 Veterans Day
According to the National Hospice and Palliative Care Organization, more than 1,800 Veterans die every day in our country- that’s about 54,000 a month. Dying Veterans represent a quarter of all deaths in the U.S.
Former Wal-Mart CEO David Glass: “Sam has been gone for a number of years now, but he’s still alive and well in this company to a large extent. There’s not a day that goes by that I don’t hear conversations around here about what Sam would do or how he felt about something.”
Intel’s chip inventory is a bloated $3 billion.
As exports fell, Germany’s third quarter GDP rose a scant 0.1%.
According to a report by comScore Networks, consumer spending for non-travel goods on U.S.-based websites will exceed $15 billion during the November through December holiday season, about 23% to 26% more than during last year’s period. More people are buying products online that were once traditionally purchased in stores. In addition, more consumers use the Internet to research products and compare prices.
In an effort to reduce inventories and increase market share, GM introduced Lock ‘n’ Roll for the next 20 days. It’s an opportunity to purchase selected vehicles with 0% APR for as long as 10 years, and to duplicate the deal on a second vehicle for up to ten years. Not all consumers will qualify.
Heating-oil supplies fell 74,000 barrels in the week ended Nov. 5, the sixth straight decrease. Stockpiles of distillate fuels, which include heating oil and diesel, fell 137,000 barrels. Heating oil futures are up about 69% from a year ago. Demand for gasoline is running at a rate of 9.2 million barrels a day, and is at its highest level in two months. Many OPEC members are producing close to their maximum capacity limits. According to John Kingston, global director of oil for Platts, “the big question continues to surround not crude, but heating oil, and whether supplies are adequate should we have a cold winter. Continued tightness in heating oil inventories remain a concern”
The U.S. trade deficit for the first nine months of 2004 was $444.5 billion. For all of 2003, it was a record $495 billion. It would appear that the deficit for all of 2004 will approach $600 billion, about an increase of 20% over 2003. That coupled with the budget deficit of $413 billion, brings the total to $1 trillion or one-eleventh of our GDP. With no spending caps going forward and/or a pay-as-you-go plan, our economic well-being is in jeopardy.
In September, our imports of capital goods were the highest in four years.
Sam Walton: “There is only one boss. The customer. And he can fire anybody in the company from the chairman on down, simply by spending his money somewhere else.”
As anticipated, the Fed lifted the funds rate 25 basis points to 2%. It’s message and policy statement remain unchanged. The Fed fails to analyze the quality of our GDP and ignores the double-counting in our employment picture. Of course, the vast majority of investors also ignore the same facts. Ignorance is not the conduit to bliss.
Wal-Mart’s CEO Scott: “What makes us different is our logistics, our information systems, our culture.”
Coke stated its long-term growth targets don't apply to fiscal 2004 or 2005. The company is experiencing weakness in North America, the Phillippines, and Germany.
Tiffany's quarterly income declined 26%. As a result, the company lowered its 2004 earnings outlook.
According to the National Hospice and Palliative Care Organization, more than 1,800 Veterans die every day in our country- that’s about 54,000 a month. Dying Veterans represent a quarter of all deaths in the U.S.
Former Wal-Mart CEO David Glass: “Sam has been gone for a number of years now, but he’s still alive and well in this company to a large extent. There’s not a day that goes by that I don’t hear conversations around here about what Sam would do or how he felt about something.”
Intel’s chip inventory is a bloated $3 billion.
As exports fell, Germany’s third quarter GDP rose a scant 0.1%.
According to a report by comScore Networks, consumer spending for non-travel goods on U.S.-based websites will exceed $15 billion during the November through December holiday season, about 23% to 26% more than during last year’s period. More people are buying products online that were once traditionally purchased in stores. In addition, more consumers use the Internet to research products and compare prices.
In an effort to reduce inventories and increase market share, GM introduced Lock ‘n’ Roll for the next 20 days. It’s an opportunity to purchase selected vehicles with 0% APR for as long as 10 years, and to duplicate the deal on a second vehicle for up to ten years. Not all consumers will qualify.
Heating-oil supplies fell 74,000 barrels in the week ended Nov. 5, the sixth straight decrease. Stockpiles of distillate fuels, which include heating oil and diesel, fell 137,000 barrels. Heating oil futures are up about 69% from a year ago. Demand for gasoline is running at a rate of 9.2 million barrels a day, and is at its highest level in two months. Many OPEC members are producing close to their maximum capacity limits. According to John Kingston, global director of oil for Platts, “the big question continues to surround not crude, but heating oil, and whether supplies are adequate should we have a cold winter. Continued tightness in heating oil inventories remain a concern”
The U.S. trade deficit for the first nine months of 2004 was $444.5 billion. For all of 2003, it was a record $495 billion. It would appear that the deficit for all of 2004 will approach $600 billion, about an increase of 20% over 2003. That coupled with the budget deficit of $413 billion, brings the total to $1 trillion or one-eleventh of our GDP. With no spending caps going forward and/or a pay-as-you-go plan, our economic well-being is in jeopardy.
In September, our imports of capital goods were the highest in four years.
Sam Walton: “There is only one boss. The customer. And he can fire anybody in the company from the chairman on down, simply by spending his money somewhere else.”
As anticipated, the Fed lifted the funds rate 25 basis points to 2%. It’s message and policy statement remain unchanged. The Fed fails to analyze the quality of our GDP and ignores the double-counting in our employment picture. Of course, the vast majority of investors also ignore the same facts. Ignorance is not the conduit to bliss.
Wal-Mart’s CEO Scott: “What makes us different is our logistics, our information systems, our culture.”
Coke stated its long-term growth targets don't apply to fiscal 2004 or 2005. The company is experiencing weakness in North America, the Phillippines, and Germany.
Tiffany's quarterly income declined 26%. As a result, the company lowered its 2004 earnings outlook.
Wednesday, November 10, 2004
11/10/04 Trading Was Light But The News Was Not
According to a survey by Deloitte & Touche USA, for the first time since their inception, gift cards will replace apparel as the gift purchase of choice. This year, 64% of consumers stated they intended to buy gift cards, up from 60% in 2003. The increase in gift cards comes at the expense of apparel, CDs, DVDs, tapes, and books. On average, respondents reported they planned to buy 4.7 cards each. These same respondents reported holding 2.3 cards unused from last year. The survey indicated half will purchase cards for stores or products; 34% for restaurants; and 27% for services or experiences. As a reminder, a card is not counted as revenue until redeemed, and many cards are not redeemed until January. A word of caution- 66% of consumers stated they will shop at fewer stores.
Generic drugs now account for more than 50% of all prescriptions filled in the U.S. and more than $40 billion in prescription sales worldwide. More than $80 billion of global blockbuster drugs face U.S. patent expiration by 2007.
Ten months ago Bush pushed for temporary legal status for 10 million undocumented immigrants. Leading up to his re-election, the plan was not mentioned. Yesterday, while in Mexico with five other cabinet members, Colin Powell stated “the president is committed to comprehensive immigration reform as a high priority in his second term.” In other words, people who broke the law when crossing the border will now be rewarded. I wonder how that will sit with the vocal moralists in rural America.
Gail D. Fosler, chief economist for the Conference Board: “The asset inflation that infected the U.S. stock market is increasingly apparent in the housing market.”
Cisco’s cash flow from operations was $1.5 billion for their first quarter of fiscal 2005, compared with $2.1 billion for the fourth quarter of fiscal 2004. During this year’s first quarter, Cisco repurchased 156 million shares of common stock at an average price of $19.24 for an aggregate purchase price of $3 billion. Yesterday, the board of directors authorized up to $10 billion in additional purchases of its common stock.
Greenbrier Cos., a railcar equipment manufacturer, stated “order backlogs are at their highest levels in the industry since 1998.” D.R. Horton, a homebuilder, reported a record backlog. Honda announced a $270 million expansion in the U.S., including plans to construct a new transmission assembly plant in Georgia. Dell received $242 million in state incentives and will build a new plant in North Carolina. To qualify for the incentives, the plant must employ 1,500 by 2009. If Boeing were to introduce a stretch version of the 7E7, then Qatar would provide the company with a multi-billion order. Boeing will introduce the smaller version of the 7E7 in 2008, and has been holding off on a stretch version. A senior Microsoft games executive stated that first-day sales of the company’s new video game, “Halo 2,” will reach $100 million. Microsoft is set to launch their internet search engine.
The Bank of England cut their 2005 growth forecast to 2.5% from 3.1%.
Marsh & McLennan is cutting 3,000 jobs. Capital One is cutting 750 jobs. Nokia is closing a plant in Florida and cutting 400 jobs. American Greetings is closing a plant in Tennessee and cutting 450 jobs. Crotty Corp. is also closing a plant in Tennessee and cutting 300 jobs. Overseas, Cable & Wireless is cutting 600 jobs and Swisscom is cutting 390 jobs.
Crude broke through $47 barrel on the downside as the IAE suggested that prices may have peaked. With regular unleaded at close to $2.50 a gallon in San Francisco, many in the Bay Area hope the prediction is correct.
In response to many inquiries, I will repeat the situation in the non-farm payroll reports. Should an individual, for example, work two jobs, then that individual is counted as two employees. That is double counting, and grossly overstates the number of employed people in the U.S. inasmuch as 8 million workers work more than one job. That figure comes from the BLS.
The U.S. trade deficit declined 3.7% in September to $51.6 billion. The gap would have been larger except that the importation of crude was disrupted by a hurricane.
According to a survey by Deloitte & Touche USA, for the first time since their inception, gift cards will replace apparel as the gift purchase of choice. This year, 64% of consumers stated they intended to buy gift cards, up from 60% in 2003. The increase in gift cards comes at the expense of apparel, CDs, DVDs, tapes, and books. On average, respondents reported they planned to buy 4.7 cards each. These same respondents reported holding 2.3 cards unused from last year. The survey indicated half will purchase cards for stores or products; 34% for restaurants; and 27% for services or experiences. As a reminder, a card is not counted as revenue until redeemed, and many cards are not redeemed until January. A word of caution- 66% of consumers stated they will shop at fewer stores.
Generic drugs now account for more than 50% of all prescriptions filled in the U.S. and more than $40 billion in prescription sales worldwide. More than $80 billion of global blockbuster drugs face U.S. patent expiration by 2007.
Ten months ago Bush pushed for temporary legal status for 10 million undocumented immigrants. Leading up to his re-election, the plan was not mentioned. Yesterday, while in Mexico with five other cabinet members, Colin Powell stated “the president is committed to comprehensive immigration reform as a high priority in his second term.” In other words, people who broke the law when crossing the border will now be rewarded. I wonder how that will sit with the vocal moralists in rural America.
Gail D. Fosler, chief economist for the Conference Board: “The asset inflation that infected the U.S. stock market is increasingly apparent in the housing market.”
Cisco’s cash flow from operations was $1.5 billion for their first quarter of fiscal 2005, compared with $2.1 billion for the fourth quarter of fiscal 2004. During this year’s first quarter, Cisco repurchased 156 million shares of common stock at an average price of $19.24 for an aggregate purchase price of $3 billion. Yesterday, the board of directors authorized up to $10 billion in additional purchases of its common stock.
Greenbrier Cos., a railcar equipment manufacturer, stated “order backlogs are at their highest levels in the industry since 1998.” D.R. Horton, a homebuilder, reported a record backlog. Honda announced a $270 million expansion in the U.S., including plans to construct a new transmission assembly plant in Georgia. Dell received $242 million in state incentives and will build a new plant in North Carolina. To qualify for the incentives, the plant must employ 1,500 by 2009. If Boeing were to introduce a stretch version of the 7E7, then Qatar would provide the company with a multi-billion order. Boeing will introduce the smaller version of the 7E7 in 2008, and has been holding off on a stretch version. A senior Microsoft games executive stated that first-day sales of the company’s new video game, “Halo 2,” will reach $100 million. Microsoft is set to launch their internet search engine.
The Bank of England cut their 2005 growth forecast to 2.5% from 3.1%.
Marsh & McLennan is cutting 3,000 jobs. Capital One is cutting 750 jobs. Nokia is closing a plant in Florida and cutting 400 jobs. American Greetings is closing a plant in Tennessee and cutting 450 jobs. Crotty Corp. is also closing a plant in Tennessee and cutting 300 jobs. Overseas, Cable & Wireless is cutting 600 jobs and Swisscom is cutting 390 jobs.
Crude broke through $47 barrel on the downside as the IAE suggested that prices may have peaked. With regular unleaded at close to $2.50 a gallon in San Francisco, many in the Bay Area hope the prediction is correct.
In response to many inquiries, I will repeat the situation in the non-farm payroll reports. Should an individual, for example, work two jobs, then that individual is counted as two employees. That is double counting, and grossly overstates the number of employed people in the U.S. inasmuch as 8 million workers work more than one job. That figure comes from the BLS.
The U.S. trade deficit declined 3.7% in September to $51.6 billion. The gap would have been larger except that the importation of crude was disrupted by a hurricane.
Tuesday, November 09, 2004
11/9/04 Foreigners Vote Every Day
The folks who live in Ohio were pretty angry after receiving thousands of letters from the UK attempting Clarke County voters to cast ballots for Kerry. In fact, record numbers turned out to vote, and that turned a deficit in 2000 to a plus 1,000 margin for Bush this year. Unfortunately, for the U.S., foreigners vote every day in the U.S. They own over half of our $3.7 trillion of Treasury debt, and they vote with their buy and sell orders. Two weeks ago, the U.S. Treasury Dept stated that foreign investors became net sellers of our Treasury notes in the most recent auction of govt securities. Individual foreign lenders, in particular, have been sellers. With a record high budget deficit and the U.S. trade deficit on its way to reaching its highest level in two decades, investors can expect continued dumping of our Treasury notes by foreigners. The daily votes will create a mounting toll. It is insane for investors to ignore the risks created by net selling by foreigners. Bush may want to spend his political capital; however, foreign investment in our country is far more important than Bush strutting over our landscape. He might not like the French, but their Finance Minister Nicholas Sarkozy echoed the sentiment of the majority as stated "the U.S. must cut its budget deficit. This is a unanimous message from Europe and the IMF, which we're sending to our American friends."
The Detroit Free Press reports that incentives are no longer enough to move cars, and that automakers could have to eat more costs. A study by CNW suggests that about 44% of the amount spent on incentives comes from profits. An incentives war is expected in December in an effort to move inventory and hit market share targets.
The euro came close to trading at $1.30, a record high.
Mozilla releases its open source browser, Firefox, today. In my view, it is far superior to Microsoft's IE.
According to Coinstar's National Currency Poll, about 64% of Americans expect to spend the same this holiday season as last year or $805, while 16.3% anticipate spending more, and 18.5% plan to spend less.
IT Group Cap Gemini Ernst & Young will cut another 1,000 jobs.
Germany's Infeon issued a cautious outlook. In November, Germany's consumer confidence declined to the lowest level in almost two years.
Multi-billion plane deals don't grow on trees. Boeing lost another deal to Airbus, and the buyer was another previous all-Boeing airline, AirAsia of Malaysia. The deal for 40 planes is worth over $5 billion. It should be noted that, with the continued decline in the U.S. dollar, foreign buyers' purchasing power increases for Boeing planes. The opposite is true for the euro and Airbus planes. Nevertheless, buyers prefer the Airbus A 320 to the Boeing 737. Additionally, Boeing has an added advantage of paying almost zero income tax in the latest quarter. This was the result of numerous tax credits received. Boeing's inability to compete rests with their management and inefficiencies in their production line.
The folks who live in Ohio were pretty angry after receiving thousands of letters from the UK attempting Clarke County voters to cast ballots for Kerry. In fact, record numbers turned out to vote, and that turned a deficit in 2000 to a plus 1,000 margin for Bush this year. Unfortunately, for the U.S., foreigners vote every day in the U.S. They own over half of our $3.7 trillion of Treasury debt, and they vote with their buy and sell orders. Two weeks ago, the U.S. Treasury Dept stated that foreign investors became net sellers of our Treasury notes in the most recent auction of govt securities. Individual foreign lenders, in particular, have been sellers. With a record high budget deficit and the U.S. trade deficit on its way to reaching its highest level in two decades, investors can expect continued dumping of our Treasury notes by foreigners. The daily votes will create a mounting toll. It is insane for investors to ignore the risks created by net selling by foreigners. Bush may want to spend his political capital; however, foreign investment in our country is far more important than Bush strutting over our landscape. He might not like the French, but their Finance Minister Nicholas Sarkozy echoed the sentiment of the majority as stated "the U.S. must cut its budget deficit. This is a unanimous message from Europe and the IMF, which we're sending to our American friends."
The Detroit Free Press reports that incentives are no longer enough to move cars, and that automakers could have to eat more costs. A study by CNW suggests that about 44% of the amount spent on incentives comes from profits. An incentives war is expected in December in an effort to move inventory and hit market share targets.
The euro came close to trading at $1.30, a record high.
Mozilla releases its open source browser, Firefox, today. In my view, it is far superior to Microsoft's IE.
According to Coinstar's National Currency Poll, about 64% of Americans expect to spend the same this holiday season as last year or $805, while 16.3% anticipate spending more, and 18.5% plan to spend less.
IT Group Cap Gemini Ernst & Young will cut another 1,000 jobs.
Germany's Infeon issued a cautious outlook. In November, Germany's consumer confidence declined to the lowest level in almost two years.
Multi-billion plane deals don't grow on trees. Boeing lost another deal to Airbus, and the buyer was another previous all-Boeing airline, AirAsia of Malaysia. The deal for 40 planes is worth over $5 billion. It should be noted that, with the continued decline in the U.S. dollar, foreign buyers' purchasing power increases for Boeing planes. The opposite is true for the euro and Airbus planes. Nevertheless, buyers prefer the Airbus A 320 to the Boeing 737. Additionally, Boeing has an added advantage of paying almost zero income tax in the latest quarter. This was the result of numerous tax credits received. Boeing's inability to compete rests with their management and inefficiencies in their production line.
Sunday, November 07, 2004
11/8/04 Telephone Numbers
Interest on the national debt was $318 billion in 2003 and $322 billion in fiscal 2004. Only record low interest rates kept the amount of interest on the $7.4 trillion national debt to its present level. In 2005, as interest rates rise by a significant percentage and the debt continues to accumulate, the interest will approach $350 billion. Interest expense is the third largest expense in the federal budget. With the present trend, in a few years, it could top the defense budget and become the largest budget item. It won’t be long before the daily interest expense amounts to $1 billion. When that happens, the Dow won’t be at or above 10,000 and the Nasdaq won’t be at or above 2000. Those will seem like telephone numbers.
Frank Zappa: “It would be easier to pay off the national debt overnight than to neutralize the long-range effects of our national stupidity.”
Tyler Refrigeration Co. has been in Waxahachie, Texas since 1947. Their North Texas plant, which is owned by Carrier Corp., will close in 2005 and slash more than 500 jobs, with most of the work expected to go to Mexico after the closure.
Interest on the national debt was $318 billion in 2003 and $322 billion in fiscal 2004. Only record low interest rates kept the amount of interest on the $7.4 trillion national debt to its present level. In 2005, as interest rates rise by a significant percentage and the debt continues to accumulate, the interest will approach $350 billion. Interest expense is the third largest expense in the federal budget. With the present trend, in a few years, it could top the defense budget and become the largest budget item. It won’t be long before the daily interest expense amounts to $1 billion. When that happens, the Dow won’t be at or above 10,000 and the Nasdaq won’t be at or above 2000. Those will seem like telephone numbers.
Frank Zappa: “It would be easier to pay off the national debt overnight than to neutralize the long-range effects of our national stupidity.”
Tyler Refrigeration Co. has been in Waxahachie, Texas since 1947. Their North Texas plant, which is owned by Carrier Corp., will close in 2005 and slash more than 500 jobs, with most of the work expected to go to Mexico after the closure.
11/7/04 You’re In Charge
There will always be talk about this “play” or this “break-up value” or this “technical indicator.” There’s something for everyone; however, no one can prove in advance when it is the right time to walk away from the table and to take a breather. Each person must learn the best way to sell to the sleeping point. The idea is not to get over-confident but to remain focused on what you do best as an investor. Straying is for animals.
Donald Trump: “It’s the people you don’t fire who make your life miserable.”
According to Barron’s, fractional jet operators account for no more than 6% of all jet aircraft in use in the U.S. but they have been placing about 40% of all new orders for planes.
Although the dollar is making new multi-year lows against other major currencies, the monthly trade deficits are recording record highs.
Bob Gillis, executive director of the Cathedral Center for Faith & Work, in downtown Kansas City: “There are more people coming now who are looking for something better. They’re underutilized in the job they’re in.”
Including discouraged workers and those who have had to settle for part-time work because full-time work isn’t available, the October unemployment rate is 9.7%.
Jacqueline Midkiff, a Kansas City economist employed by the BLS, noted that the pace of compensation growth did not keep up with the Midwest’s 2.3% inflation rate in the costs of consumer goods.
On Saturday, 20 Marines were wounded at Ramadi.
According to the CBO, in 2003, Medicare and Medicaid outlays accounted for 3.9% of the GDP. In 2004, the price tag for both programs will approach $600 billion. The budget office director stated that the entire federal budget is 20% of this nation’s GDP. A March 2004 report signed by the secretaries of the Treasury, Labor & Health, and Human Services departments stated that “Medicare’s financial difficulties come sooner- and are much more severe- than those confronting Social Security… the financial problem in Medicare is five times as great.”
As of September 30, Microsoft had $64.4 billion in cash. On December 2, the company will pay a $3 a share special dividend to shareholders amounting to $30 billion. The last day to buy shares and receive the dividend is this Friday. Scott Di Valero, Microsoft’s controller, stated that the company’s cash flow for fiscal 2005 would approach $14 or $15 billion on sales growth of 6%.
Yesterday, I mentioned that Delta Airlines is planning to lay off 5,100 workers beginning Jan 1. The company released new details. The number has been raised to 6,900 workers.
Yesterday, Wal-Mart stated it still anticipates a 2 percent to 4 percent increase in November same-store sales. Traffic is currently accounting for most of the sales increase.
According to a new survey by CFO Magazine, more than 60% say their spouses want them to work less and more than 60% believe pressure at work is damaging their health. In addition, one-third of the companies that can’t certify their internal controls on time say the problem is the lack of qualified people to do so.
India’s Finance Minister Palaniappan Chidambaram stated that India is capable of sustaining annual economic growth of 7 to 8 percent over the next 10 to 12 years and is on its way to becoming a “global economic superpower.” He remarked that the economic boom will be fueled largely by higher household savings and investment due to rising literacy levels and growing confidence among foreign investors. Honeywell, for example, mentioned they would be hiring 1,000 additional programmers in India in 2005, adding to their present staff of 3,000. As previously mentioned, Microsoft is building a major technical center in India, adding to their current presence. It is well to note that approximately 80% of our nation’s economy is based on services provided. India’s strength is in services. Their present and future growth will be in services. We have lost a good portion of our manufacturing base. Currently and over time, a good portion of our services base will be lost- to countries like India. I assure you the “Faith Community” won’t be replacing the lost jobs. They’ll be asking you for donations.
The OECD stated an early warning indicator showed the economic outlook weakened in September in the U.S. That indicator, the six-month rate of change, was down for the eighth month in a row, falling to 1.7 in September from 2.3 in August. In addition, they predicted slowing expansion lies ahead for the 30 industrialized countries comprising the OECD.
According to the National Bureau of Statistics, China’s central government’s investment along with local government and state-controlled companies’ spending in roads, bridges, and other fixed assets increased 28% in the first nine months of 2004. At a recent conference in Beijing, senior government officials remarked that State investment will be reduced in 2005 in an effort to cool the economy. Maybe that will occur; however, China’s M2, the broadest measure of the money supply, is expected to increase 16 to 17 percent in 2005. That’s red-hot money supply growth. Meanwhile, the People’s Bank of China continues to proclaim that, in a gradual and steady manner, the central bank will “create a more flexible exchange-rate mechanism.” The latter implies a small downward revision in the peg from 8.3 yuan to the U.S. dollar to about 7.9 to the dollar. An alternative would be to peg the yuan to a basket of currencies, and that could include the U.S. dollar, the yen, the euro, the Singapore currency, the South Korean won, and the Taipei dollar. Looking out over the horizon, our dollar will be less important as a medium of exchange. The same will be true for investment in our equities and bonds. There are too many alternatives in other corners of the world. Our population is aging and our economic growth prospects are diminishing. We are in serious need of a new cash flow generator. Hopefully, one will be discovered in some garage in the Silicon Valley.
Peter Lynch: “I remember a company that this fireman owned, and he had a system. He made $400,000 on a $5,000 investment. He held it for 25 years. And he said, ‘as long as they keep hiring, I’m going to hold onto it. When they stop hiring, I leave.’ So when they stopped hiring, he sold.”
Lenny Bruce: "Every day people are straying from the church and going back to God."
There will always be talk about this “play” or this “break-up value” or this “technical indicator.” There’s something for everyone; however, no one can prove in advance when it is the right time to walk away from the table and to take a breather. Each person must learn the best way to sell to the sleeping point. The idea is not to get over-confident but to remain focused on what you do best as an investor. Straying is for animals.
Donald Trump: “It’s the people you don’t fire who make your life miserable.”
According to Barron’s, fractional jet operators account for no more than 6% of all jet aircraft in use in the U.S. but they have been placing about 40% of all new orders for planes.
Although the dollar is making new multi-year lows against other major currencies, the monthly trade deficits are recording record highs.
Bob Gillis, executive director of the Cathedral Center for Faith & Work, in downtown Kansas City: “There are more people coming now who are looking for something better. They’re underutilized in the job they’re in.”
Including discouraged workers and those who have had to settle for part-time work because full-time work isn’t available, the October unemployment rate is 9.7%.
Jacqueline Midkiff, a Kansas City economist employed by the BLS, noted that the pace of compensation growth did not keep up with the Midwest’s 2.3% inflation rate in the costs of consumer goods.
On Saturday, 20 Marines were wounded at Ramadi.
According to the CBO, in 2003, Medicare and Medicaid outlays accounted for 3.9% of the GDP. In 2004, the price tag for both programs will approach $600 billion. The budget office director stated that the entire federal budget is 20% of this nation’s GDP. A March 2004 report signed by the secretaries of the Treasury, Labor & Health, and Human Services departments stated that “Medicare’s financial difficulties come sooner- and are much more severe- than those confronting Social Security… the financial problem in Medicare is five times as great.”
As of September 30, Microsoft had $64.4 billion in cash. On December 2, the company will pay a $3 a share special dividend to shareholders amounting to $30 billion. The last day to buy shares and receive the dividend is this Friday. Scott Di Valero, Microsoft’s controller, stated that the company’s cash flow for fiscal 2005 would approach $14 or $15 billion on sales growth of 6%.
Yesterday, I mentioned that Delta Airlines is planning to lay off 5,100 workers beginning Jan 1. The company released new details. The number has been raised to 6,900 workers.
Yesterday, Wal-Mart stated it still anticipates a 2 percent to 4 percent increase in November same-store sales. Traffic is currently accounting for most of the sales increase.
According to a new survey by CFO Magazine, more than 60% say their spouses want them to work less and more than 60% believe pressure at work is damaging their health. In addition, one-third of the companies that can’t certify their internal controls on time say the problem is the lack of qualified people to do so.
India’s Finance Minister Palaniappan Chidambaram stated that India is capable of sustaining annual economic growth of 7 to 8 percent over the next 10 to 12 years and is on its way to becoming a “global economic superpower.” He remarked that the economic boom will be fueled largely by higher household savings and investment due to rising literacy levels and growing confidence among foreign investors. Honeywell, for example, mentioned they would be hiring 1,000 additional programmers in India in 2005, adding to their present staff of 3,000. As previously mentioned, Microsoft is building a major technical center in India, adding to their current presence. It is well to note that approximately 80% of our nation’s economy is based on services provided. India’s strength is in services. Their present and future growth will be in services. We have lost a good portion of our manufacturing base. Currently and over time, a good portion of our services base will be lost- to countries like India. I assure you the “Faith Community” won’t be replacing the lost jobs. They’ll be asking you for donations.
The OECD stated an early warning indicator showed the economic outlook weakened in September in the U.S. That indicator, the six-month rate of change, was down for the eighth month in a row, falling to 1.7 in September from 2.3 in August. In addition, they predicted slowing expansion lies ahead for the 30 industrialized countries comprising the OECD.
According to the National Bureau of Statistics, China’s central government’s investment along with local government and state-controlled companies’ spending in roads, bridges, and other fixed assets increased 28% in the first nine months of 2004. At a recent conference in Beijing, senior government officials remarked that State investment will be reduced in 2005 in an effort to cool the economy. Maybe that will occur; however, China’s M2, the broadest measure of the money supply, is expected to increase 16 to 17 percent in 2005. That’s red-hot money supply growth. Meanwhile, the People’s Bank of China continues to proclaim that, in a gradual and steady manner, the central bank will “create a more flexible exchange-rate mechanism.” The latter implies a small downward revision in the peg from 8.3 yuan to the U.S. dollar to about 7.9 to the dollar. An alternative would be to peg the yuan to a basket of currencies, and that could include the U.S. dollar, the yen, the euro, the Singapore currency, the South Korean won, and the Taipei dollar. Looking out over the horizon, our dollar will be less important as a medium of exchange. The same will be true for investment in our equities and bonds. There are too many alternatives in other corners of the world. Our population is aging and our economic growth prospects are diminishing. We are in serious need of a new cash flow generator. Hopefully, one will be discovered in some garage in the Silicon Valley.
Peter Lynch: “I remember a company that this fireman owned, and he had a system. He made $400,000 on a $5,000 investment. He held it for 25 years. And he said, ‘as long as they keep hiring, I’m going to hold onto it. When they stop hiring, I leave.’ So when they stopped hiring, he sold.”
Lenny Bruce: "Every day people are straying from the church and going back to God."
Saturday, November 06, 2004
11/6/04 Double Counting
In the non-farm payroll survey a person with two jobs is counted as two employed people. In addition, the payroll survey systematically double-counts due to job changing. We do not live in a perfect world. However, in the October payroll report something significant happened. Some would point to the 337,000 increase in jobs. Some would suggest that, as 367,000 people entered the labor force, the unemployment rate rose from 5.4% in September to 5.5% in October. There is another item that dwarfed these two items. The number of people holding more than one job rose by 519,000 to 8 million in October. In other words, 519,000 employed people were double counted in the payroll report. The average time for the unemployed to find a job remained at 19.6 weeks.
Let’s examine the report a bit more. Temp jobs rose 47,600 to the same level reached in February 2001, a month before the last recession began. The average workweek was unchanged at 33.8 hours. The manufacturing workweek and factory overtime both declined by 0.1% and 5,000 manufacturing jobs were lost. Meanwhile, average hourly weekly earnings rose by 5 cents to $15.83 and average weekly earnings rose 0.3%. The average worker still isn’t making it. Yesterday, we mentioned that 71,000 construction jobs were added to assist in the hurricane repair work. There were 17,000 financial jobs added and retail trade jobs rose by 21,000. Not surprisingly, 41,000 health services jobs were added. A total of 22,000 education positions were added. Now get this. Within government, local education added 32,000 jobs. What education jobs are added in October? In sum, the labor force participation rate was unchanged at 65.9%; however, the number of unemployed Americans in October increased by about 69,000 from the prior month.
The Economic Cycle Research Institute stated its leading gauge of U.S. economic activity fell 1.4% in the latest week. It was the fourteenth straight week without growth and the tenth straight week it has fallen. Coincidentally, the NAPM index has been declining monthly beginning in July. With falling economic activity, there is little reason to expect hiring to expand—the exception maybe hiring by federal, state, and local governments. Their bloated payrolls can be likened to cancerous tumors enlarging on a monthly basis.
Edward Abbey: “A patriot must always be ready to defend his country against his government.”
Richard Nixon: “When the President does it, that means that it’s not illegal.”
Coyotes have been found roaming near the White House. They are opportunistic predators. Their principle diet is small rodents.
The monthly Spherion Employment Report, conducted by Harris Interactive, shows that, despite the addition of 337,000 jobs in October, 41% of American workers think that the economy is getting weaker, up four percentage points from September. Thirty six percent of working adults in the U.S. are likely to look for a new job in the next 12 months. Forty seven percent of employed adults in the U.S. believe that fewer jobs are available, while 22% believe more jobs are available.
John Locke: “It is one thing to show a man that he is in error, and another to put him in possession of truth.”
The S&P 500 has had nine straight days in the plus column, the most since 1997.
SBC Communications may cut 1000 jobs in Michigan. In the past year, the company has eliminated about 7,000 jobs. In 2005, SBC will cut 10,000 or more jobs. Delta Airlines will cut as many as 5,100 employees. An auto-parts manufacturing plant in Circleville, Ohio is closing its doors and putting 110 people out of work. Mervyn’s is laying off 150 workers. The Hamilton Sunstrand plant in Grand Junction, Colorado is closing down. They make parts for military jets. As one worker stated, “the way jobs are in Grand Junction right now, you can’t find anything.”
Booker T. Washington: “Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed.”
Consumer credit grew by $9.8 billion in September or at a 5.8% annual rate.
Since same-store sales have been disappointing at Sears, Kmart, and Dillards, the companies are now viewed as real estate plays. Hope springs eternal.
The euro reached an all-time high versus the dollar, and is now 57% above its all-time low of 82 cents reached in October 2000. Each dollar now buys only about three-quarters of a euro. When the euro was introduced in 1999, it was pegged at 1 to 1 against the dollar. The dollar has also been falling against the yen, the British pound, the Swiss franc, and the Canadian dollar. As our deficits continue to rise to record levels, the value of the dollar will continue to depreciate. That’s been proven over the last few years.
According to the Cambridge Consumer Credit Index, 56% of Americans say their monthly lease and car payments are enough of a burden to prevent them from making other big ticket purchases. In addition, 17% of those with car loan payments say these loans are a major burden, up from 11% who said so in 2003. The average car payments have risen because of higher car prices with 17% of those with car payments spending between $500 and $700 per month, up from 10% who paid that amount in 2003.
The credit rating on GM’s $150 billion of debt was cut to two grades above junk.
Gold is trading near $435 per ounce and oil remains just below $50 per barrel.
I find it interesting that the number of unemployed people and the number of people working multiple jobs are each very close in number to 8 million. You add in marginally attached and discouraged workers, and you are at 18.2 million Americans. I won’t double count the under-employed. I leave double counting to the Labor Department.
Ken Goldstein, economist for the Conference Board: "There's a laundry list of indicators that are suggesting the economy in general and the labor market in particular are losing momentum, softening."
Dan Radford, director of the Fedral Reserve Bank of Cincinnati: "What we need are jobs for middle-class folks with skills."
In the non-farm payroll survey a person with two jobs is counted as two employed people. In addition, the payroll survey systematically double-counts due to job changing. We do not live in a perfect world. However, in the October payroll report something significant happened. Some would point to the 337,000 increase in jobs. Some would suggest that, as 367,000 people entered the labor force, the unemployment rate rose from 5.4% in September to 5.5% in October. There is another item that dwarfed these two items. The number of people holding more than one job rose by 519,000 to 8 million in October. In other words, 519,000 employed people were double counted in the payroll report. The average time for the unemployed to find a job remained at 19.6 weeks.
Let’s examine the report a bit more. Temp jobs rose 47,600 to the same level reached in February 2001, a month before the last recession began. The average workweek was unchanged at 33.8 hours. The manufacturing workweek and factory overtime both declined by 0.1% and 5,000 manufacturing jobs were lost. Meanwhile, average hourly weekly earnings rose by 5 cents to $15.83 and average weekly earnings rose 0.3%. The average worker still isn’t making it. Yesterday, we mentioned that 71,000 construction jobs were added to assist in the hurricane repair work. There were 17,000 financial jobs added and retail trade jobs rose by 21,000. Not surprisingly, 41,000 health services jobs were added. A total of 22,000 education positions were added. Now get this. Within government, local education added 32,000 jobs. What education jobs are added in October? In sum, the labor force participation rate was unchanged at 65.9%; however, the number of unemployed Americans in October increased by about 69,000 from the prior month.
The Economic Cycle Research Institute stated its leading gauge of U.S. economic activity fell 1.4% in the latest week. It was the fourteenth straight week without growth and the tenth straight week it has fallen. Coincidentally, the NAPM index has been declining monthly beginning in July. With falling economic activity, there is little reason to expect hiring to expand—the exception maybe hiring by federal, state, and local governments. Their bloated payrolls can be likened to cancerous tumors enlarging on a monthly basis.
Edward Abbey: “A patriot must always be ready to defend his country against his government.”
Richard Nixon: “When the President does it, that means that it’s not illegal.”
Coyotes have been found roaming near the White House. They are opportunistic predators. Their principle diet is small rodents.
The monthly Spherion Employment Report, conducted by Harris Interactive, shows that, despite the addition of 337,000 jobs in October, 41% of American workers think that the economy is getting weaker, up four percentage points from September. Thirty six percent of working adults in the U.S. are likely to look for a new job in the next 12 months. Forty seven percent of employed adults in the U.S. believe that fewer jobs are available, while 22% believe more jobs are available.
John Locke: “It is one thing to show a man that he is in error, and another to put him in possession of truth.”
The S&P 500 has had nine straight days in the plus column, the most since 1997.
SBC Communications may cut 1000 jobs in Michigan. In the past year, the company has eliminated about 7,000 jobs. In 2005, SBC will cut 10,000 or more jobs. Delta Airlines will cut as many as 5,100 employees. An auto-parts manufacturing plant in Circleville, Ohio is closing its doors and putting 110 people out of work. Mervyn’s is laying off 150 workers. The Hamilton Sunstrand plant in Grand Junction, Colorado is closing down. They make parts for military jets. As one worker stated, “the way jobs are in Grand Junction right now, you can’t find anything.”
Booker T. Washington: “Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed.”
Consumer credit grew by $9.8 billion in September or at a 5.8% annual rate.
Since same-store sales have been disappointing at Sears, Kmart, and Dillards, the companies are now viewed as real estate plays. Hope springs eternal.
The euro reached an all-time high versus the dollar, and is now 57% above its all-time low of 82 cents reached in October 2000. Each dollar now buys only about three-quarters of a euro. When the euro was introduced in 1999, it was pegged at 1 to 1 against the dollar. The dollar has also been falling against the yen, the British pound, the Swiss franc, and the Canadian dollar. As our deficits continue to rise to record levels, the value of the dollar will continue to depreciate. That’s been proven over the last few years.
According to the Cambridge Consumer Credit Index, 56% of Americans say their monthly lease and car payments are enough of a burden to prevent them from making other big ticket purchases. In addition, 17% of those with car loan payments say these loans are a major burden, up from 11% who said so in 2003. The average car payments have risen because of higher car prices with 17% of those with car payments spending between $500 and $700 per month, up from 10% who paid that amount in 2003.
The credit rating on GM’s $150 billion of debt was cut to two grades above junk.
Gold is trading near $435 per ounce and oil remains just below $50 per barrel.
I find it interesting that the number of unemployed people and the number of people working multiple jobs are each very close in number to 8 million. You add in marginally attached and discouraged workers, and you are at 18.2 million Americans. I won’t double count the under-employed. I leave double counting to the Labor Department.
Ken Goldstein, economist for the Conference Board: "There's a laundry list of indicators that are suggesting the economy in general and the labor market in particular are losing momentum, softening."
Dan Radford, director of the Fedral Reserve Bank of Cincinnati: "What we need are jobs for middle-class folks with skills."
Friday, November 05, 2004
11/5/04 Spending Political Capital
The operative word is “spending.” The government has no capital unless you are confused with the capitol building, and that is owned by the taxpayers. Fortunately, not all Americans are in a reversible coma. Karl Rove may perceive all Americans as brain dead. The last time I checked I, thank God, did not fall into this category. Before Wall Street and Bush get too carried away, I suggest they face a little housekeeping measure. When the Congress returns in mid-November, the first item on the agenda will be to vote on raising the federal debt limit. That’s the one that was reached about three weeks ago at $7.38 trillion. In the interim, in an effort to avoid exceeding the cap, the Treasury department temporarily suspended contributions to a government pension plan. Snow mentioned that “by mid-November all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted.” For all followers of the Center for Moral Clarity, it might be noted that Bush submitted a budget to the Congress in February 2001 and he promised that the debt ceiling would not have to be increased until 2008. That promise has been breached three times by Bush, and obviously broken promises are part of a mandate. A spokesperson for Bush claimed breaching the debt limit “is nothing we have control over.” I have zero confidence in Bush reversing his irresponsible spending habits, and suggest the prompt elimination of all U.S. treasury notes in all portfolios. I believe it may state “In God We Trust” on U.S. currency, but that says nothing about the credit worthiness of the currency. Gold selling above $430 an ounce, the dollar approaching 1.29 per euro, 105.67 yen, and an 8-year-low versus the Swiss franc should be some warning signs. The U.S. debt structure is on borrowed time, and I, for one, do not believe in holding the short straw.
Mark Twain: “This nation is like all the others that have been spewed upon the earth- ready to shout for any cause that tickle its vanity or fill its pocket. What a hell of a heaven it will be when they get all these hypocrites assembled there!”
American Airlines has announced plans to furlough 450 pilots and 650 mechanics over the next few months because of soaring jet fuel costs. Venezuela’s Energy Minister RAFAEL Ramirez warned that “oil prices have not yet reached their maximum. We see the market as unstable and higher.” Heating oil inventories are 16% below this time last year. A colder-than-normal winter is anticipated for the eastern United States. As an aside, in Japan, kerosene supplies are 11.5% below this time last year.
Everything is not coming up roses in Ohio. Jim Petro, Ohio Attorney General, will be running for Governor in 2006. Yesterday, he stated “Ohio is trapped in the past. We must reinvent our government so that it runs more effectively, while costing less.” He proposes job cuts for 11,500 state workers. I wonder what the Center for Moral Clarity has to say about that. God can’t eliminate the budget deficits in Ohio.
According to a recent survey by the Securities Industry Conference, investors are expecting an average return of 12.8% on their investments in 2004 and 14.1% next year. The expectation is the highest since 2002 when investors expected 19% returns. The SIA stated the expectations are too high. I recommend the following. Sell into unrealistic expectations. Reduce and/or eliminate all non-core long-term equity holdings.
Mark Zandi, chief economist at Economy.com: “The leading indicators have yellow signals, if not red, for next year. The economy is going to be struggling in the first part of the president’s term.”
Lyle Gramley, a former Fed governor: “So far we haven’t had much of an effect from the rising price of oil, but I think it’s coming.” CIBC World Markets economists stated in Toronto yesterday that “the widely held view that the U.S. economy is half as sensitive to higher oil prices as it was during previous oil shocks simply does not pass the muster. The median household spends no less of its income on energy than it did 25 years ago. Energy efficiency is fast improving, but energy usage is rising even faster. And while energy-intensive goods are no longer as likely to be made at home, the energy costs embedded in their manufacture will still be borne by American consumers… In fact, on average, North American households consume about 10% more energy than they did 25 years ago.”
Houston economist Barton Smith is director of the University of Houston’s Institute for Regional Forecasting. He states that housing prices in about one-third of the country have risen far faster than incomes, in some cities 16% faster. He predicts that eventually housing prices will plummet and “it will stymie the national economy.” He believes that the bursting of the nation’s housing bubble could send our country back into stagnation, and even a recession, depending on how the Federal Reserve responds. In addition, Smith opined “I’d write construction off as a major source of growth for the next five years.”
Anchor Glass Container Corp. is the nation’s third-largest bottler. Without warning, last evening they closed their South Connellsville, Pennsylvania plant in Fayette County and approximately 300 workers are without jobs this morning. Instead of providing 90-day closure notice, the company is making monetary payment equal to 90 days of work.
Third quarter productivity slowed sharply to 1.9%, down from second quarter results of 3.9%. Unit labor costs, which reflect changes in both hourly compensation and productivity, rose 1.5% in the third quarter, about the same as the 1.4% of the second quarter.
Andre Gide: “The true hypocrite is the one who ceases to perceive his deception, the one who lies with sincerity.”
A Labor Department official stated that part of the slide in weekly unemployment claims was due to a decline in Florida where fewer people requested assistance from company closures. Many Florida businesses were interrupted the last two months due to hurricanes. Extended unemployment benefits were not available in any state during the week ending October 16. The largest increases in initial claims for the week ending Oct. 23 were in California (11,561), Missouri (4,285), Illinois (3,090), Michigan (2,877), and North Carolina (2,111) while the largest decrease was I Florida with 1,555.
For the four weeks ended October 29, the same-store sales increase for the Wal-Mart store division was 2.4% versus the year ago period of plus 4%. Sam’s Club showed a 5% increase compared with the year-ago period of 7%. On the other hand, Target comparable-store sales increased 6% during the month of October compared with 4.5% in October 2003.
Kerry won more votes than any Democrat in the state of Ohio’s history- 2.65 million; however, Bush received 130,650 more. The difference was this. Bush equaled his 2000 performance by carrying 72 of 88 counties, but he improved it by increasing his vote take in 78 counties. A total of 70% of Ohio’s record 8 million registered voters cast ballots. White evangelicals and born-again voters comprised 25% of those who cast ballots in Ohio, and 76% of them voted for Bush.
Judging from the price of the stock, you may not realize that Boeing is in trouble. They are. Their defense business has been carrying the company. It is not unlike GM with its financing division and its operations in China. James Albaugh is head of Boeing's defense business. He stated “you’re going to see a reprioritization of many of the programs that the government is funding. All big programs will come under scrutiny because of their size.” This is bad news for the company. In addition, in another 6 months or so, I predict they will announce the closing down of their 767 line in Everett. There are practically no orders left on the books. The only possible near-term potential was in commercial airplanes for low-cost carriers. Late yesterday, Air Berlin placed a $6 billion order for Airbus A320s. This is significant. Currently, Air Berlin has an all-Boeing fleet. A spokesperson for Boeing stated “we’re obviously disappointed. But (Airbus) seems to be wanting to buy market share at any cost.” That sounds like a sore loser. How long will it take for the stockholders to take it on the chin? The fact is that Airbus has been outperforming Boeing for the last few years. Without cash flow from big government contracts, the next several years will not prove rewarding for Boeing or its shareholders.
Francois Rochefoucauld: “Hyprocrisy is the homage that vice pays to virtue.”
With the election, I have not spent time on analyzing the payrolls for October. I knew there would be a large pickup in construction in order to clean up after the Florida hurricanes. There were- 71,000 jobs. I knew there would be temp hiring for the holidays. There were- 48,000. Manufacturing was down 5,000 jobs in the month and the unemployment rate clibed to 5.5%. Over all, the Labor Dept stated there were 337,000 new jobs in the month of October, twice the number anticipated by economists. I will massage the numbers and we can discuss them tomorrow.
The operative word is “spending.” The government has no capital unless you are confused with the capitol building, and that is owned by the taxpayers. Fortunately, not all Americans are in a reversible coma. Karl Rove may perceive all Americans as brain dead. The last time I checked I, thank God, did not fall into this category. Before Wall Street and Bush get too carried away, I suggest they face a little housekeeping measure. When the Congress returns in mid-November, the first item on the agenda will be to vote on raising the federal debt limit. That’s the one that was reached about three weeks ago at $7.38 trillion. In the interim, in an effort to avoid exceeding the cap, the Treasury department temporarily suspended contributions to a government pension plan. Snow mentioned that “by mid-November all of our previously used prudent and legal actions to avoid breaching the statutory debt limit will be exhausted.” For all followers of the Center for Moral Clarity, it might be noted that Bush submitted a budget to the Congress in February 2001 and he promised that the debt ceiling would not have to be increased until 2008. That promise has been breached three times by Bush, and obviously broken promises are part of a mandate. A spokesperson for Bush claimed breaching the debt limit “is nothing we have control over.” I have zero confidence in Bush reversing his irresponsible spending habits, and suggest the prompt elimination of all U.S. treasury notes in all portfolios. I believe it may state “In God We Trust” on U.S. currency, but that says nothing about the credit worthiness of the currency. Gold selling above $430 an ounce, the dollar approaching 1.29 per euro, 105.67 yen, and an 8-year-low versus the Swiss franc should be some warning signs. The U.S. debt structure is on borrowed time, and I, for one, do not believe in holding the short straw.
Mark Twain: “This nation is like all the others that have been spewed upon the earth- ready to shout for any cause that tickle its vanity or fill its pocket. What a hell of a heaven it will be when they get all these hypocrites assembled there!”
American Airlines has announced plans to furlough 450 pilots and 650 mechanics over the next few months because of soaring jet fuel costs. Venezuela’s Energy Minister RAFAEL Ramirez warned that “oil prices have not yet reached their maximum. We see the market as unstable and higher.” Heating oil inventories are 16% below this time last year. A colder-than-normal winter is anticipated for the eastern United States. As an aside, in Japan, kerosene supplies are 11.5% below this time last year.
Everything is not coming up roses in Ohio. Jim Petro, Ohio Attorney General, will be running for Governor in 2006. Yesterday, he stated “Ohio is trapped in the past. We must reinvent our government so that it runs more effectively, while costing less.” He proposes job cuts for 11,500 state workers. I wonder what the Center for Moral Clarity has to say about that. God can’t eliminate the budget deficits in Ohio.
According to a recent survey by the Securities Industry Conference, investors are expecting an average return of 12.8% on their investments in 2004 and 14.1% next year. The expectation is the highest since 2002 when investors expected 19% returns. The SIA stated the expectations are too high. I recommend the following. Sell into unrealistic expectations. Reduce and/or eliminate all non-core long-term equity holdings.
Mark Zandi, chief economist at Economy.com: “The leading indicators have yellow signals, if not red, for next year. The economy is going to be struggling in the first part of the president’s term.”
Lyle Gramley, a former Fed governor: “So far we haven’t had much of an effect from the rising price of oil, but I think it’s coming.” CIBC World Markets economists stated in Toronto yesterday that “the widely held view that the U.S. economy is half as sensitive to higher oil prices as it was during previous oil shocks simply does not pass the muster. The median household spends no less of its income on energy than it did 25 years ago. Energy efficiency is fast improving, but energy usage is rising even faster. And while energy-intensive goods are no longer as likely to be made at home, the energy costs embedded in their manufacture will still be borne by American consumers… In fact, on average, North American households consume about 10% more energy than they did 25 years ago.”
Houston economist Barton Smith is director of the University of Houston’s Institute for Regional Forecasting. He states that housing prices in about one-third of the country have risen far faster than incomes, in some cities 16% faster. He predicts that eventually housing prices will plummet and “it will stymie the national economy.” He believes that the bursting of the nation’s housing bubble could send our country back into stagnation, and even a recession, depending on how the Federal Reserve responds. In addition, Smith opined “I’d write construction off as a major source of growth for the next five years.”
Anchor Glass Container Corp. is the nation’s third-largest bottler. Without warning, last evening they closed their South Connellsville, Pennsylvania plant in Fayette County and approximately 300 workers are without jobs this morning. Instead of providing 90-day closure notice, the company is making monetary payment equal to 90 days of work.
Third quarter productivity slowed sharply to 1.9%, down from second quarter results of 3.9%. Unit labor costs, which reflect changes in both hourly compensation and productivity, rose 1.5% in the third quarter, about the same as the 1.4% of the second quarter.
Andre Gide: “The true hypocrite is the one who ceases to perceive his deception, the one who lies with sincerity.”
A Labor Department official stated that part of the slide in weekly unemployment claims was due to a decline in Florida where fewer people requested assistance from company closures. Many Florida businesses were interrupted the last two months due to hurricanes. Extended unemployment benefits were not available in any state during the week ending October 16. The largest increases in initial claims for the week ending Oct. 23 were in California (11,561), Missouri (4,285), Illinois (3,090), Michigan (2,877), and North Carolina (2,111) while the largest decrease was I Florida with 1,555.
For the four weeks ended October 29, the same-store sales increase for the Wal-Mart store division was 2.4% versus the year ago period of plus 4%. Sam’s Club showed a 5% increase compared with the year-ago period of 7%. On the other hand, Target comparable-store sales increased 6% during the month of October compared with 4.5% in October 2003.
Kerry won more votes than any Democrat in the state of Ohio’s history- 2.65 million; however, Bush received 130,650 more. The difference was this. Bush equaled his 2000 performance by carrying 72 of 88 counties, but he improved it by increasing his vote take in 78 counties. A total of 70% of Ohio’s record 8 million registered voters cast ballots. White evangelicals and born-again voters comprised 25% of those who cast ballots in Ohio, and 76% of them voted for Bush.
Judging from the price of the stock, you may not realize that Boeing is in trouble. They are. Their defense business has been carrying the company. It is not unlike GM with its financing division and its operations in China. James Albaugh is head of Boeing's defense business. He stated “you’re going to see a reprioritization of many of the programs that the government is funding. All big programs will come under scrutiny because of their size.” This is bad news for the company. In addition, in another 6 months or so, I predict they will announce the closing down of their 767 line in Everett. There are practically no orders left on the books. The only possible near-term potential was in commercial airplanes for low-cost carriers. Late yesterday, Air Berlin placed a $6 billion order for Airbus A320s. This is significant. Currently, Air Berlin has an all-Boeing fleet. A spokesperson for Boeing stated “we’re obviously disappointed. But (Airbus) seems to be wanting to buy market share at any cost.” That sounds like a sore loser. How long will it take for the stockholders to take it on the chin? The fact is that Airbus has been outperforming Boeing for the last few years. Without cash flow from big government contracts, the next several years will not prove rewarding for Boeing or its shareholders.
Francois Rochefoucauld: “Hyprocrisy is the homage that vice pays to virtue.”
With the election, I have not spent time on analyzing the payrolls for October. I knew there would be a large pickup in construction in order to clean up after the Florida hurricanes. There were- 71,000 jobs. I knew there would be temp hiring for the holidays. There were- 48,000. Manufacturing was down 5,000 jobs in the month and the unemployment rate clibed to 5.5%. Over all, the Labor Dept stated there were 337,000 new jobs in the month of October, twice the number anticipated by economists. I will massage the numbers and we can discuss them tomorrow.
Thursday, November 04, 2004
11/4/04 Seeing Red Through Moral Clarity
Have you ever heard of the Center for Moral Clarity? It’s based in Columbus, Ohio and was founded by Pastor Rod Parsley. Bush can thank him for his win. Parsley turned out the “values voters” across 2,500 counties in our nation, and, in particular, in the state of Ohio. As Parsley explains, “the left has done just that--- left, and no longer represent the mainstream. It is not that the country has become more conservative, but that throughout this campaign, the mainstream has more readily identified with the positions long-voiced by Christians and other people of faith and have naturally aligned with our platform, embracing values and a passion for a culture of life. I think we can attribute President Bush’s victory to a couple of different dynamics. Americans realized that our basic common values were under assault by the liberal agenda, and they turned out at the polls to let their voices be heard…It is obvious that the Church has not created a wave, but rather struck a nerve, reflecting the sentiments of the average American.” In Bush’s second term, Parsley will focus on a Federal Marriage Amendment, the appointment of Supreme Court justices, partial birth abortion, and a total of ten specific issues. In other words, painting the country red is aligned with embracing values and a passion for a culture of life as seen through the eyes of the Center for Moral Clarity. It makes me want to jump up and down and clap my hands, and then puke!
While the Center for Moral Clarity congratulates themselves, the U.S. September factory orders declined 0.4% in September after falling 0.3% in August. Maybe Parsley can provide more factory orders. GM and Ford October sales declined 5% in the U.S. and GM October sales declined 6.5% in China. We need Parsley to buy more cars.
American Airlines will soon announce deferring deliveries of 47 Boeing 737-800s and nine Boeing 777-200s between 2006 and 2010. We need Parsley and his Center to fly more.
I’m thinking that maybe Parsley has a plan for job creation to go with his moral values platform. I sure hope so. Lehman Bros. stated that SBC Communications may cut between 10,000 and 20,000 employees in its wire-line business. Credence Systems is cutting 160 jobs. Cincinnati Bell, not so far from Columbus, will shed 150 to 200 jobs. ShawCor Ltd. will close a plant just outside Mobile, Alabama and 450 employees will lose their jobs. According to the Charlotte, NC Chamber, the number of new and expanding companies decreased to 269 in the quarter from 309 in the third quarter of last year. Overall, Mecklenburg County experienced declines in new and expanding businesses, employment, and capital investment in the third quarter of 2004. Don’t worry, Mecklenburg. Parsley is on the way.
Qualcomm announced that 2005 should “get off to a slow start.”
Wal-Mart stated that third-quarter sales were less than hoped because the company’s lower-income customers held down spending due to higher gasoline prices and job concerns. I’m sure that Parsley can help Bush with a new energy program and permanent job cuts to spur spending and debt creation.
British home prices dropped 1.1% in October. When will lower home prices find its way to our shores? Maybe we should keep our eyes out for Los Angeles and Boston and other cities with large populations. Those areas are out of the mainstream and see blue.
According to CIRCLE Research, an estimated 21 million 18-30 year olds voted in the 2004 presidential election, up from nearly 18 million votes cast in 2000.
When issues take over, and the economy counts, and earnings are punk, and stock prices tank, do not worry. Place a call to the Heartland and ask for Parsley. I’m sure he and his evangelicals have plenty of buying power. After all, they recognize “values.”
Have you ever heard of the Center for Moral Clarity? It’s based in Columbus, Ohio and was founded by Pastor Rod Parsley. Bush can thank him for his win. Parsley turned out the “values voters” across 2,500 counties in our nation, and, in particular, in the state of Ohio. As Parsley explains, “the left has done just that--- left, and no longer represent the mainstream. It is not that the country has become more conservative, but that throughout this campaign, the mainstream has more readily identified with the positions long-voiced by Christians and other people of faith and have naturally aligned with our platform, embracing values and a passion for a culture of life. I think we can attribute President Bush’s victory to a couple of different dynamics. Americans realized that our basic common values were under assault by the liberal agenda, and they turned out at the polls to let their voices be heard…It is obvious that the Church has not created a wave, but rather struck a nerve, reflecting the sentiments of the average American.” In Bush’s second term, Parsley will focus on a Federal Marriage Amendment, the appointment of Supreme Court justices, partial birth abortion, and a total of ten specific issues. In other words, painting the country red is aligned with embracing values and a passion for a culture of life as seen through the eyes of the Center for Moral Clarity. It makes me want to jump up and down and clap my hands, and then puke!
While the Center for Moral Clarity congratulates themselves, the U.S. September factory orders declined 0.4% in September after falling 0.3% in August. Maybe Parsley can provide more factory orders. GM and Ford October sales declined 5% in the U.S. and GM October sales declined 6.5% in China. We need Parsley to buy more cars.
American Airlines will soon announce deferring deliveries of 47 Boeing 737-800s and nine Boeing 777-200s between 2006 and 2010. We need Parsley and his Center to fly more.
I’m thinking that maybe Parsley has a plan for job creation to go with his moral values platform. I sure hope so. Lehman Bros. stated that SBC Communications may cut between 10,000 and 20,000 employees in its wire-line business. Credence Systems is cutting 160 jobs. Cincinnati Bell, not so far from Columbus, will shed 150 to 200 jobs. ShawCor Ltd. will close a plant just outside Mobile, Alabama and 450 employees will lose their jobs. According to the Charlotte, NC Chamber, the number of new and expanding companies decreased to 269 in the quarter from 309 in the third quarter of last year. Overall, Mecklenburg County experienced declines in new and expanding businesses, employment, and capital investment in the third quarter of 2004. Don’t worry, Mecklenburg. Parsley is on the way.
Qualcomm announced that 2005 should “get off to a slow start.”
Wal-Mart stated that third-quarter sales were less than hoped because the company’s lower-income customers held down spending due to higher gasoline prices and job concerns. I’m sure that Parsley can help Bush with a new energy program and permanent job cuts to spur spending and debt creation.
British home prices dropped 1.1% in October. When will lower home prices find its way to our shores? Maybe we should keep our eyes out for Los Angeles and Boston and other cities with large populations. Those areas are out of the mainstream and see blue.
According to CIRCLE Research, an estimated 21 million 18-30 year olds voted in the 2004 presidential election, up from nearly 18 million votes cast in 2000.
When issues take over, and the economy counts, and earnings are punk, and stock prices tank, do not worry. Place a call to the Heartland and ask for Parsley. I’m sure he and his evangelicals have plenty of buying power. After all, they recognize “values.”
Wednesday, November 03, 2004
11/3/04 I Don’t Get Politics
After spending untold hours studying the political
landscape, I realize I understand very little. If
Ohioans stated that the economy was the number one
factor in their voting decision, and hundreds of
thousands of jobs were lost during Bush’s term of
office, then one might conclude that Ohio would
comfortably go for Kerry. Of all the states, Ohio has
been hit hardest by the loss of jobs. It was
unthinkable on my part that Ohio could go in the Bush
win column. After all, statewide voter turnout in Ohio
ran close to 72 plus percent. In fact, when it came to
voting for a president, 5.4 million Ohioans voted, up
from 4.8 million in 2000.
I realized some weeks back that the nationwide voter
turnout would be huge. I thought that first-time
voters would heavily favor Kerry. I never believed
that the increased votes from four million white male
weekly churchgoers would give Bush a 3% edge in the
popular vote. I never thought that “moral family
values” would topple the economy in the minds of so
many Americans in the voting booth. That thought still
blows my mind.
Now we wait for the provisional and absentee ballots
to be counted in Ohio. With Bush leading by 136,000
votes, it would take a miracle for a Kerry win. Local
Ohio boards don’t begin to count these provisional and
absentee ballots until November 13, and the boards
have until December 1 to certify the final results. In
the meantime, the nation will assume a Bush victory.
One might ask how is it possible that Bush’s approval
rating trailed the percentage of the votes he
garnered? I can’t answer that. If every poll showed
that a majority of Americans disapproved of Bush’s
handling of the Iraq war and the economy, then how
could he win a majority of the popular vote? There are
over 58 million Americans who came out and voted for
Bush. He will win at least 30 states.
Through the evening I kept thinking that over the past
year the unemployment rate has declined because the
labor force is shrinking. There are so many
discouraged workers. Were they so discouraged that
they did not vote in Ohio? How is it they voted in
Pennsylvania? During the month of September, 1,100
people left the Pennsylvania job market. It’s
statistics like this in Ohio that should have made a
big difference.
There is good news though. Bush will make the tax cuts
permanent. You’ll still be able to get a tax deduction
for buying a large Hummer. After Oct. 22, deductions
for such vehicles and other large SUVs were capped at
$25,000. Of course, there will be an offset. The
deficits will continue to increase, but it’s ok
because deficits don’t matter. Right? The stock market
will rally out of the box this morning. Traders can
depend on four more years of the same. Nothing will
change. Right?
Challenger, Gray, & Christmas stated layoff
announcements by U.S. companies fell 5.6% in October
to 101,840; however, it was the second straight month
that layoffs remained above 100,000, for the first
time since January-February 2003. Layoffs don’t
matter. Right?
Some time today we’ll find out the final vote tally in
Iowa. It obviously doesn’t matter that Iowa lost
27,000 manufacturing jobs during Bush’s presidency.
The seven electoral votes in Iowa don’t matter either.
They can’t tip the election results.
I have to hand it to Bush. His lack of performance
over the past four years could not defeat him. At the
end of the election night, Trump was not there to say
"you're fired."
Tuesday, November 02, 2004
11/2/04 Bush Defeats Bush
John Kerry will be our new president and he will win by a very comfortable margin. In the end, however, it will be Bush who defeated Bush. He could not master the job as CEO and Commander-in-Chief of our country. Wall Street is still in denial. Last evening, Tradesports.com had Bush winning 53% to 47%. Interestingly, by comparison, we witnessed early voting in 31 states. By my analysis, in the early voting that ended last night, Kerry was leading by 5 percentage points.
According to the survey conducted at the Weatherhead School of Management at Case Western Reserve University in Cleveland, Ohio, 65% of respondents at the top 30 economics departments gave Bush’s economics policies an overall rating of “poor.” Eighty-seven percent of respondents thought Bush’s series of tax cuts were poorly designed to provide fiscal stimulus. When asked which candidate would be more beneficial to an average elderly American, the choice was Kerry by a margin of 16 to 1. For a family of four earning $50,000 a year, the margin was 14 to 1. For a new college graduate entering the workforce, the margin was 5 to 1.
The U.S. federal government is expected to borrow $100 billion in the final quarter of 2004 to pay for the budget deficits, according to the Treasury Dept. For the first quarter of 2005, the government expects to borrow a record $147 billion. From whom?
In Florida, nearly 2 ½ times the number of people who voted in early 2000 cast their ballots through early or absentee voting this election. By the time today’s election takes place today, it is likely that some of the early voters will have passed on. You see, 455 voting-age people die in Florida each day. In sum, Bush may have been stiffed by a stiff.
Helen Thomas: “The U.S. attack on Iraq is a clear violation of international law and has made us helpless to condemn others for similar acts.”
According to the Santa Clara University Business Index, Silicon Valley business leaders think a John Kerry presidency would benefit the Silicon Valley economy more than continuing with Bush. Lack of job creation, the fear of burgeoning federal deficits, and his handling of the overall economy are three reasons for the disappointment expressed in Bush.
Bush: “A low voter turnout is an indication of fewer people going to the polls.”
According to a recent survey taken by Columbus, Ohio-based Opinion Strategies Inc., 31% of Ohioans think the top national issue is the economy, followed by foreign policy (28%), health care (15%), and homeland security (8%). Importantly, 17% of respondents expect a brighter future, while 24% anticipate economic conditions to deteriorate. Similarly, 12% stated their personal or family well-being was improved from 2003, but 31% replied that it had declined. In addition, 57% think little or no progress has been made in the war on terrorism, and 69% see little or no progress in Iraq. In view of the above, I believe Kerry will carry Ohio by at least 5 percentage points.
Bush: “Well, I think if you say you’re going to do something and don’t do it, that’s trustworthiness.”
A total of 40,000 users have logged their choices for Republican and Democratic-themed musical playlists on bluebeat.com. As of last evening, Kerry’s lead over Bush has widened to 11 points.
In October, the U.S. ISM Manufacturing Index declined to 56.8, a 13-month low, from 58.5 in September. The production index fell to 58.9 from 61.6 in the prior month. It was the lowest level since July 2003. The employment idex dropped to 54.8, the lowest since January, from 58.1 in September. The index of inventories index fell to 48.2 from 51, and the backlog of orders index dropped to 49, the first contraction since April 2003, from 55. Unfortunately, the prices paid index rose to 78.5 from 76, while the customer index fell to 43.5%. In sum, the soft patch in manufacturing has accelerated in October. Of course, you won’t hear a Fed governor tell you that.
As of November 1, at least 1,122 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
AOL is cutting more than 700 workers. The Stuart, Florida Vought Aircraft plant has layoffs starting today and continuing through February 2006. The facility will be closed.
May Dept Stores same-store sales fell 2.3% in October.
Yesterday, we experienced a welcome respite in the crude oil market as the price declined to $50 a barrel. How many really believed six months ago that we would be cheering a drop to the $50 price level?
Manfred Kurz, an economist at Bayerische Landesbank in Munich: “When purchasing power falls, there’s less money to go around.”
Yesterday, National Semiconductor lowered its revenue guidance for its quarter ending November 28 to a range of $445 million to $450 million, down approximately 18% to 19% sequentially from the prior quarter. Previously, the company had expected that the quarterly revenues would be down 8% to 10% sequentially. The company’s chairman, president, and CEO stated “inventory adjustments and lower-than-typical seasonality have been the themes so far this quarter.” Distributor resale rates of their products have not picked up through October, and this is not typical for the pre-holiday season. Demand from certain customers in Asia for handset and display products have also remained weak, due in part to excess supply in those channels, the company stated.
There is some good news. According to Hewitt Associates, companies nationwide are planning to give their employees a 3.6% boost in their base pay next year, up from 3.4% they parceled out this year. Unfortunately, these wage gains are being offset by rising health insurance costs. Hewitt stated that average out-of-pocket medical expenses have soared to $1,030 this year, up from $383 in 1998. In addition, the nation’s workers on average will pay $1,565 in health care premiums, up from $630 in 1998.
The nation's chain store same-store sales declined 0.3% in the week ended Oct. 30 compared to the prior week. It was the third consecutive week-to-week decline, according to the International Council of Shopping Centers and UBS.
John Kerry will be our new president and he will win by a very comfortable margin. In the end, however, it will be Bush who defeated Bush. He could not master the job as CEO and Commander-in-Chief of our country. Wall Street is still in denial. Last evening, Tradesports.com had Bush winning 53% to 47%. Interestingly, by comparison, we witnessed early voting in 31 states. By my analysis, in the early voting that ended last night, Kerry was leading by 5 percentage points.
According to the survey conducted at the Weatherhead School of Management at Case Western Reserve University in Cleveland, Ohio, 65% of respondents at the top 30 economics departments gave Bush’s economics policies an overall rating of “poor.” Eighty-seven percent of respondents thought Bush’s series of tax cuts were poorly designed to provide fiscal stimulus. When asked which candidate would be more beneficial to an average elderly American, the choice was Kerry by a margin of 16 to 1. For a family of four earning $50,000 a year, the margin was 14 to 1. For a new college graduate entering the workforce, the margin was 5 to 1.
The U.S. federal government is expected to borrow $100 billion in the final quarter of 2004 to pay for the budget deficits, according to the Treasury Dept. For the first quarter of 2005, the government expects to borrow a record $147 billion. From whom?
In Florida, nearly 2 ½ times the number of people who voted in early 2000 cast their ballots through early or absentee voting this election. By the time today’s election takes place today, it is likely that some of the early voters will have passed on. You see, 455 voting-age people die in Florida each day. In sum, Bush may have been stiffed by a stiff.
Helen Thomas: “The U.S. attack on Iraq is a clear violation of international law and has made us helpless to condemn others for similar acts.”
According to the Santa Clara University Business Index, Silicon Valley business leaders think a John Kerry presidency would benefit the Silicon Valley economy more than continuing with Bush. Lack of job creation, the fear of burgeoning federal deficits, and his handling of the overall economy are three reasons for the disappointment expressed in Bush.
Bush: “A low voter turnout is an indication of fewer people going to the polls.”
According to a recent survey taken by Columbus, Ohio-based Opinion Strategies Inc., 31% of Ohioans think the top national issue is the economy, followed by foreign policy (28%), health care (15%), and homeland security (8%). Importantly, 17% of respondents expect a brighter future, while 24% anticipate economic conditions to deteriorate. Similarly, 12% stated their personal or family well-being was improved from 2003, but 31% replied that it had declined. In addition, 57% think little or no progress has been made in the war on terrorism, and 69% see little or no progress in Iraq. In view of the above, I believe Kerry will carry Ohio by at least 5 percentage points.
Bush: “Well, I think if you say you’re going to do something and don’t do it, that’s trustworthiness.”
A total of 40,000 users have logged their choices for Republican and Democratic-themed musical playlists on bluebeat.com. As of last evening, Kerry’s lead over Bush has widened to 11 points.
In October, the U.S. ISM Manufacturing Index declined to 56.8, a 13-month low, from 58.5 in September. The production index fell to 58.9 from 61.6 in the prior month. It was the lowest level since July 2003. The employment idex dropped to 54.8, the lowest since January, from 58.1 in September. The index of inventories index fell to 48.2 from 51, and the backlog of orders index dropped to 49, the first contraction since April 2003, from 55. Unfortunately, the prices paid index rose to 78.5 from 76, while the customer index fell to 43.5%. In sum, the soft patch in manufacturing has accelerated in October. Of course, you won’t hear a Fed governor tell you that.
As of November 1, at least 1,122 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
AOL is cutting more than 700 workers. The Stuart, Florida Vought Aircraft plant has layoffs starting today and continuing through February 2006. The facility will be closed.
May Dept Stores same-store sales fell 2.3% in October.
Yesterday, we experienced a welcome respite in the crude oil market as the price declined to $50 a barrel. How many really believed six months ago that we would be cheering a drop to the $50 price level?
Manfred Kurz, an economist at Bayerische Landesbank in Munich: “When purchasing power falls, there’s less money to go around.”
Yesterday, National Semiconductor lowered its revenue guidance for its quarter ending November 28 to a range of $445 million to $450 million, down approximately 18% to 19% sequentially from the prior quarter. Previously, the company had expected that the quarterly revenues would be down 8% to 10% sequentially. The company’s chairman, president, and CEO stated “inventory adjustments and lower-than-typical seasonality have been the themes so far this quarter.” Distributor resale rates of their products have not picked up through October, and this is not typical for the pre-holiday season. Demand from certain customers in Asia for handset and display products have also remained weak, due in part to excess supply in those channels, the company stated.
There is some good news. According to Hewitt Associates, companies nationwide are planning to give their employees a 3.6% boost in their base pay next year, up from 3.4% they parceled out this year. Unfortunately, these wage gains are being offset by rising health insurance costs. Hewitt stated that average out-of-pocket medical expenses have soared to $1,030 this year, up from $383 in 1998. In addition, the nation’s workers on average will pay $1,565 in health care premiums, up from $630 in 1998.
The nation's chain store same-store sales declined 0.3% in the week ended Oct. 30 compared to the prior week. It was the third consecutive week-to-week decline, according to the International Council of Shopping Centers and UBS.
Monday, November 01, 2004
11/1/04 Make Your Day. Make A Difference. Vote Tomorrow.
John F. Kennedy: '"The high office of President has been used to foment a plot to destroy the Americans freedom, and before I leave office I must inform the citizen of his plight."
All voters support our troops, but less than half support the war in Iraq. Our total military presence in Iraq has just been increased to 142,000, the highest level since the summer of 2003. That does not sound like we're making progress in our occupation.
A deputy governor of Baghdad was gunned down on Monday, and two bodyguards were injured.
In the September quarter, Toyota's sales increased 9.4% but net income declined 1.5% as increased incentives cut into operating margins. When a great company experiences tough going, it's no wonder GM and Ford are mired in manure.
Depending on the voter's choice of poison, it appears to be fear over terrorism and/or fear over the economy. Some predict 120 million votes will be cast in this election. Republicans claim they have registered 3.4 million new voters and Democrats proclaim registering twice that number.
The U.S. strategic oil reserve now holds about 670 million barrels of crude oil, close to its 700 million barrel capacity. At $52 a barrel, that's not chump change.
Nigeria is the fifth-largest source of U.S. crude and exports around 2.5 million barrels daily. On Sunday, the country's main labor union called for a nationwide strike on November 16.
John Glenn: "I think the people are beginning to shift. And I'm not gonna predict a landslide, but I'm gonna predict a victory next Tuesday."
So much for buying on the cheap and lowering its offer. Oracle raised its bid for PeopleSoft from $21 to $24 per share.
Clint Eastwood: "This film cost $31 million. With that kind of money, I could have invaded some country."
Bruce Springsteen: "The country we carry in our hearts is waiting, and together we can move America toward her deepest ideals."
DoubleClick retained Lazard Freres in an effort to explore ways to increase shareholder value.
John F. Kennedy: '"The high office of President has been used to foment a plot to destroy the Americans freedom, and before I leave office I must inform the citizen of his plight."
All voters support our troops, but less than half support the war in Iraq. Our total military presence in Iraq has just been increased to 142,000, the highest level since the summer of 2003. That does not sound like we're making progress in our occupation.
A deputy governor of Baghdad was gunned down on Monday, and two bodyguards were injured.
In the September quarter, Toyota's sales increased 9.4% but net income declined 1.5% as increased incentives cut into operating margins. When a great company experiences tough going, it's no wonder GM and Ford are mired in manure.
Depending on the voter's choice of poison, it appears to be fear over terrorism and/or fear over the economy. Some predict 120 million votes will be cast in this election. Republicans claim they have registered 3.4 million new voters and Democrats proclaim registering twice that number.
The U.S. strategic oil reserve now holds about 670 million barrels of crude oil, close to its 700 million barrel capacity. At $52 a barrel, that's not chump change.
Nigeria is the fifth-largest source of U.S. crude and exports around 2.5 million barrels daily. On Sunday, the country's main labor union called for a nationwide strike on November 16.
John Glenn: "I think the people are beginning to shift. And I'm not gonna predict a landslide, but I'm gonna predict a victory next Tuesday."
So much for buying on the cheap and lowering its offer. Oracle raised its bid for PeopleSoft from $21 to $24 per share.
Clint Eastwood: "This film cost $31 million. With that kind of money, I could have invaded some country."
Bruce Springsteen: "The country we carry in our hearts is waiting, and together we can move America toward her deepest ideals."
DoubleClick retained Lazard Freres in an effort to explore ways to increase shareholder value.
Sunday, October 31, 2004
10/31/04 Face The facts
Early this morning we turned back the clock; however, you can’t turn the clock back on the truth or on the facts. Simply put, that is the main reason Bush will lose on Tuesday. Yes, Kerry will win, but it is more about Bush beating Bush.
Bhagavad Gita: "Fear not what is not real, never was and never will be. What is real, always was and cannot be destroyed."
Yesterday, nine U.S. marines were killed and nine others wounded in Iraq. It was the most U.S. deaths on a single day since May 2. Since our invasion of Iraq, at least 1,121 of our fighting men and women have been killed. According to the Lancet, a British medical journal, U.S. and coalition forces have killed 100,000 Iraqi civilians since the fall of Saddam Hussein on April 9, 2003. This report is based on extensive household survey research in Iraq in September 2004.
Nearly 2 million have voted early in Florida.
Iowa has lost 27,000 manufacturing jobs during Bush’s presidency. This fact will play an important role in Bush losing Iowa on Tuesday.
According to the National Council of State Legislatures, Congress owes the states a minimum of $50 billion for fiscal 2004 and 2005 for federally mandated programs that were not fully funded by Washington. So how were state budgets balanced? Services were cut and taxes increased. Property taxes rose an average of 10% in the past year.
The Census Bureau estimates that 5.2 million Americans lost health insurance since Bush arrived at the White House.
Increasing homeowner’s insurance rates have partially offset lower mortgage payments that have resulted from lower interest rates.
According to Bloomberg data, over the past four years the U.S. CPI has outpaced personal income growth.
Joseph Stiglitz, a Nobel Prize winner in economics and a professor at Columbia University: “The dividend tax cut was the most egregious and provided no (economic and job-producing) stimulus.”
According to the federal Energy Information Administration, the U.S. will consume about 7.5 billion barrels of oil this year, 27.4% more than in 1981, the peak year for oil prices on an inflation-adjusted basis.
According to McKinsey & Co., about $1 billion is invested in China per week.
According to the Economic Policy Institute, even with the tax breaks of 2001 and 2003, “all (middle-income) fixed-family types except single mothers experienced a drop in after-tax income—a decline of 0.2% for two-parent families and of 1.4% for young singles and elderly couples.”
Pollster John Zogby: “Months ago I said I thought John Kerry would win…I am sticking with that prediction…This is a referendum on George W. Bush and we see an incumbent polling at 47-48 percent. That is not enough to win.”
The Census Bureau said in August that the ranks of the uninsured and the impoverished grew in 2003 for the third consecutive year, with the number living in poverty rising 1.3 million to 35.8 million. A new Agriculture Report will show an increase in the number of households that either don’t have access to enough food or have experienced hunger.
There are about 42 million Americans aged 18 to 34, and only 36% of 18 to 24 year-olds voted in 2000, compared with 72% of 65 to 72 year-olds. A much higher percentage of 18 to 24 year-olds will vote in this election. It will prove a major reason for Bush not being re-elected.
Visteon was separated from Ford more than four years ago. The company is facing heavy losses, and an aggressive restructuring is in the works. They employ 21,000 workers in southeast Michigan. Visteon plans major cutbacks and will sell or close several unprofitable factories, cutting a portion of its 8,500 U.S. salaried employees and hastening the transfer of factory workers back to Ford. Visteon has worldwide sales of $18 billion and is the second-largest U.S. automotive supplier. Visteon still has 18,000 Ford employees making an average wage of $25 an hour in its factories. New workers receive $14 an hour at Visteon. Do not be surprised to see Visteon go to a four-day work- week to reduce labor costs.
The problems at Visteon highlight current conditions at GM and Ford. They operate too many plants, have too many employees, wages and benefits are much higher than those of competitors, and the inventory levels require cutting back. By running the plants at about a 17 million yearly car rate, the nation’s GDP growth has been overstated for all of 2004. Increased incentives and rising profits in their financing divisions have masked the growing existence of many unprofitable factories and the declining market share for both companies. Unless escalating problems are addressed, stockholders will be left holding the bag.
On election day 2000 the euro was worth 86 cents. On election day 2004 it will be worth about $1.28. So much for the purchasing power of all Americans!
Bunnatine Greenhouse does not preside over our government’s policy on global warming . She is the Army Corps of Engineers top contracting officer. She wrote on October 5 to Lt. Gen. Carl Strock, commander of the Army Corps of Engineers, that Halliburton’s extended troop support contract in the Balkans should not be extended and that “there is little or no incentive for the contractor to reduce or keep cost down…it is not reasonable to believe that only one source responded to the solicitation…the general feeling in the theatre is that the contractor is ‘out of control,’” She went on to say that contracting officials must work as a team because “divided- the contractor will eat our lunch.”
Ghostzapper has the potential to be the best horse since Secretariat. This one is the real deal.
Albert Einstein: "Many of the things you can count, don't count. Many of the things you can't count, really count."
Early this morning we turned back the clock; however, you can’t turn the clock back on the truth or on the facts. Simply put, that is the main reason Bush will lose on Tuesday. Yes, Kerry will win, but it is more about Bush beating Bush.
Bhagavad Gita: "Fear not what is not real, never was and never will be. What is real, always was and cannot be destroyed."
Yesterday, nine U.S. marines were killed and nine others wounded in Iraq. It was the most U.S. deaths on a single day since May 2. Since our invasion of Iraq, at least 1,121 of our fighting men and women have been killed. According to the Lancet, a British medical journal, U.S. and coalition forces have killed 100,000 Iraqi civilians since the fall of Saddam Hussein on April 9, 2003. This report is based on extensive household survey research in Iraq in September 2004.
Nearly 2 million have voted early in Florida.
Iowa has lost 27,000 manufacturing jobs during Bush’s presidency. This fact will play an important role in Bush losing Iowa on Tuesday.
According to the National Council of State Legislatures, Congress owes the states a minimum of $50 billion for fiscal 2004 and 2005 for federally mandated programs that were not fully funded by Washington. So how were state budgets balanced? Services were cut and taxes increased. Property taxes rose an average of 10% in the past year.
The Census Bureau estimates that 5.2 million Americans lost health insurance since Bush arrived at the White House.
Increasing homeowner’s insurance rates have partially offset lower mortgage payments that have resulted from lower interest rates.
According to Bloomberg data, over the past four years the U.S. CPI has outpaced personal income growth.
Joseph Stiglitz, a Nobel Prize winner in economics and a professor at Columbia University: “The dividend tax cut was the most egregious and provided no (economic and job-producing) stimulus.”
According to the federal Energy Information Administration, the U.S. will consume about 7.5 billion barrels of oil this year, 27.4% more than in 1981, the peak year for oil prices on an inflation-adjusted basis.
According to McKinsey & Co., about $1 billion is invested in China per week.
According to the Economic Policy Institute, even with the tax breaks of 2001 and 2003, “all (middle-income) fixed-family types except single mothers experienced a drop in after-tax income—a decline of 0.2% for two-parent families and of 1.4% for young singles and elderly couples.”
Pollster John Zogby: “Months ago I said I thought John Kerry would win…I am sticking with that prediction…This is a referendum on George W. Bush and we see an incumbent polling at 47-48 percent. That is not enough to win.”
The Census Bureau said in August that the ranks of the uninsured and the impoverished grew in 2003 for the third consecutive year, with the number living in poverty rising 1.3 million to 35.8 million. A new Agriculture Report will show an increase in the number of households that either don’t have access to enough food or have experienced hunger.
There are about 42 million Americans aged 18 to 34, and only 36% of 18 to 24 year-olds voted in 2000, compared with 72% of 65 to 72 year-olds. A much higher percentage of 18 to 24 year-olds will vote in this election. It will prove a major reason for Bush not being re-elected.
Visteon was separated from Ford more than four years ago. The company is facing heavy losses, and an aggressive restructuring is in the works. They employ 21,000 workers in southeast Michigan. Visteon plans major cutbacks and will sell or close several unprofitable factories, cutting a portion of its 8,500 U.S. salaried employees and hastening the transfer of factory workers back to Ford. Visteon has worldwide sales of $18 billion and is the second-largest U.S. automotive supplier. Visteon still has 18,000 Ford employees making an average wage of $25 an hour in its factories. New workers receive $14 an hour at Visteon. Do not be surprised to see Visteon go to a four-day work- week to reduce labor costs.
The problems at Visteon highlight current conditions at GM and Ford. They operate too many plants, have too many employees, wages and benefits are much higher than those of competitors, and the inventory levels require cutting back. By running the plants at about a 17 million yearly car rate, the nation’s GDP growth has been overstated for all of 2004. Increased incentives and rising profits in their financing divisions have masked the growing existence of many unprofitable factories and the declining market share for both companies. Unless escalating problems are addressed, stockholders will be left holding the bag.
On election day 2000 the euro was worth 86 cents. On election day 2004 it will be worth about $1.28. So much for the purchasing power of all Americans!
Bunnatine Greenhouse does not preside over our government’s policy on global warming . She is the Army Corps of Engineers top contracting officer. She wrote on October 5 to Lt. Gen. Carl Strock, commander of the Army Corps of Engineers, that Halliburton’s extended troop support contract in the Balkans should not be extended and that “there is little or no incentive for the contractor to reduce or keep cost down…it is not reasonable to believe that only one source responded to the solicitation…the general feeling in the theatre is that the contractor is ‘out of control,’” She went on to say that contracting officials must work as a team because “divided- the contractor will eat our lunch.”
Ghostzapper has the potential to be the best horse since Secretariat. This one is the real deal.
Albert Einstein: "Many of the things you can count, don't count. Many of the things you can't count, really count."
Saturday, October 30, 2004
10/30/04 On The Run
Bush: “The terrorists are on the run.”
Steven Wright: “A cop pulled me over for running a stop sign. He said ‘didn’t you see the stop sign?’ I said Yeah, but I don’t believe everything I read.”
Philip Stephens of the Financial Times: “But amid the avalanche of polling data from every district and state in the Union, two messages stand out. The first is that a majority of Americans think the country is going in the wrong direction; the second that only a minority believe Mr. Bush actually deserves a second term. My guess is that, when they come to look in the mirror next Tuesday, most Americans will prefer light over darkness- tough-minded realism abroad and tolerance at home over faith-based fundamentalism. I think Mr. Kerry will win- comfortably.”
In this year’s third quarter, real disposable income rose but 1.4% and the personal savings rate fell 0.4%, its lowest level since the Depression. Salaries rose 0.7% in the third quarter, and over the past year 2.4%, the smallest gain on record. Most Americans are worse off today than when Bush came into office. Come November 2, the voters will have Bush on the run—back to Crawford, Texas.
Robert Brusca, chief economist for FAO Economics: “Any GDP growth rate that does not create jobs in the amount averaging 150,000 per month is a growth rate that is not high enough. Period. This is the fourth quarter in a row in which GDP has grown faster than disposable personal income, not a trend that can be sustained.”
For the first time, metropolitan Phoenix is our nation’s top home-building market.
David Copperfield: “I could make the whole of Manhattan disappear into that (Jennifer Lopez’s) amazing butt.”
Since Bush ordered the invasion of Iraq, at least 1,112 of our U.S. fighting forces have been killed.
According to a recent research report by economists at Citigroup, the rise in energy prices may reduce 0.9 percentage point from four-quarter GDP growth. For the month of October, crude futures gained 5% even though they closed yesterday at $51.76 a barrel, about 6% below the prior week’s record close of $55.17.
According to the latest University of Michigan consumer confidence index, consumer sentiment declined to 91.7 in October, down from 94.2 in September.
Pilliod Inc. will close its Nichols, S.C. furniture plant next week, putting 133 people out of work. An increase of imported furniture and the “economic uncertainty of the American consumer” were given as reasons for the closing.
There is a continuing need to reduce overproduction at GM and Ford. Inventory levels remain too high. Delphi Corp.’s CFO Alan Dawes stated “clearly, there’s an inventory bubble, and the production cuts won’t be complete by the end of the quarter. Our plans for next year are going to have to take that into account.” Fourth quarter production cuts by GM and Ford will reduce fourth-quarter GDP growth.
Mexico is the largest consumer of soft drinks in the world. Each year, a total of 526 servings of Coke are consumed by every man, woman, and child in that country. Mexican Coca -Cola is not the same as U.S. Coca-Cola. It contains cane sugar and it comes in heavy glass bottles. It’s sweeter than the U.S. product made with corn syrup. With a growing Latino population in the U.S., management at Coke might consider returning to the original formula containing sugar and not corn syrup. It might cost a bit more to make but the demand over time has proven to be greater.
According to preliminary results, Wall-Mart's same-store sales rose 2.8% in October.
The market cap for eBay is $65 billion, for Google $52 billion, and for Yahoo $50 billion. IBM's market cap is $150 billion. Taking a long-term investment view, I would rather own one share of eBay, Google, and Yahoo, and be short one share of IBM. That strategy could incur a great deal of risk. On the other hand, I have greater confidence in the managements and business models at eBay, Google, and Yahoo.
Bush: “The terrorists are on the run.”
Steven Wright: “A cop pulled me over for running a stop sign. He said ‘didn’t you see the stop sign?’ I said Yeah, but I don’t believe everything I read.”
Philip Stephens of the Financial Times: “But amid the avalanche of polling data from every district and state in the Union, two messages stand out. The first is that a majority of Americans think the country is going in the wrong direction; the second that only a minority believe Mr. Bush actually deserves a second term. My guess is that, when they come to look in the mirror next Tuesday, most Americans will prefer light over darkness- tough-minded realism abroad and tolerance at home over faith-based fundamentalism. I think Mr. Kerry will win- comfortably.”
In this year’s third quarter, real disposable income rose but 1.4% and the personal savings rate fell 0.4%, its lowest level since the Depression. Salaries rose 0.7% in the third quarter, and over the past year 2.4%, the smallest gain on record. Most Americans are worse off today than when Bush came into office. Come November 2, the voters will have Bush on the run—back to Crawford, Texas.
Robert Brusca, chief economist for FAO Economics: “Any GDP growth rate that does not create jobs in the amount averaging 150,000 per month is a growth rate that is not high enough. Period. This is the fourth quarter in a row in which GDP has grown faster than disposable personal income, not a trend that can be sustained.”
For the first time, metropolitan Phoenix is our nation’s top home-building market.
David Copperfield: “I could make the whole of Manhattan disappear into that (Jennifer Lopez’s) amazing butt.”
Since Bush ordered the invasion of Iraq, at least 1,112 of our U.S. fighting forces have been killed.
According to a recent research report by economists at Citigroup, the rise in energy prices may reduce 0.9 percentage point from four-quarter GDP growth. For the month of October, crude futures gained 5% even though they closed yesterday at $51.76 a barrel, about 6% below the prior week’s record close of $55.17.
According to the latest University of Michigan consumer confidence index, consumer sentiment declined to 91.7 in October, down from 94.2 in September.
Pilliod Inc. will close its Nichols, S.C. furniture plant next week, putting 133 people out of work. An increase of imported furniture and the “economic uncertainty of the American consumer” were given as reasons for the closing.
There is a continuing need to reduce overproduction at GM and Ford. Inventory levels remain too high. Delphi Corp.’s CFO Alan Dawes stated “clearly, there’s an inventory bubble, and the production cuts won’t be complete by the end of the quarter. Our plans for next year are going to have to take that into account.” Fourth quarter production cuts by GM and Ford will reduce fourth-quarter GDP growth.
Mexico is the largest consumer of soft drinks in the world. Each year, a total of 526 servings of Coke are consumed by every man, woman, and child in that country. Mexican Coca -Cola is not the same as U.S. Coca-Cola. It contains cane sugar and it comes in heavy glass bottles. It’s sweeter than the U.S. product made with corn syrup. With a growing Latino population in the U.S., management at Coke might consider returning to the original formula containing sugar and not corn syrup. It might cost a bit more to make but the demand over time has proven to be greater.
According to preliminary results, Wall-Mart's same-store sales rose 2.8% in October.
The market cap for eBay is $65 billion, for Google $52 billion, and for Yahoo $50 billion. IBM's market cap is $150 billion. Taking a long-term investment view, I would rather own one share of eBay, Google, and Yahoo, and be short one share of IBM. That strategy could incur a great deal of risk. On the other hand, I have greater confidence in the managements and business models at eBay, Google, and Yahoo.
Friday, October 29, 2004
10/29/04 This Presidential Election Will Not Be Close
There are at least 15 million new registered voters, and 1.5 million are in Florida and 800,000 are found in Ohio. Of the new registered voters nationwide, Democrats hold a 3 to 2 advantage over Republicans. The American Federation of State, County and Municipal Employees (AFSCME) is the nation’s fastest growing public service employee union with 1.4 million members. They have 93,000 members in Pennsylvania, 53,000 in Minnesota, 120,000 in Ohio, and 30,000 in Ohio. In 2000, 68% of AFSCME members voted for Gore. In 2004, 90% of AFSCME’s membership, for example, is registered to vote in Iowa, a higher percentage than in 2000. AFSCME has aggressively mobilized its members on a nationwide basis. Their votes will make a difference.
GM will temporarily idle 5 plants early in 2005, laying off 9,000 workers. Ford will soon announce its plan for plant shutdowns and layoffs. MT Picture Display is closing its plant in Horseheads, N.Y. and cutting 800 jobs as well as cutting nearly 300 jobs at its Troy, Ohio plant.
Salazar is now leading Coors in the race for Ben Nighthorse’s Senate seat in Colorado. Maybe this is an indicator that Kerry will take Colorado.
The Conference Board’s Help-Wanted Advertising Index dipped one point in September to 36. It was 37 one year ago. In the last three months, help-wanted advertising declined in eight of the nine U.S. regions. Ken Goldstein, Conference Board economist, stated “with the Leading Economic Index declining for four straight months, the labor market could even be losing momentum going into the final months of 2004, and not just in the Midwest and Upper Plains.” In September 2004, the proportion of labor markets with rising want-ad volume was 25%, down from 49% the prior month and down from 43% a year earlier. This is not a soft patch. Speculators betting on rising interest rates and a stronger economy are the same speculators who have predicted a Bush win and greater job creation. They will be proven wrong again and again until they run out of capital. Sheep have a way of finding the path to the slaughterhouse.
Robert Orben: "More than ever before, Americans are suffering from back problems, back taxes, back rent, back auto payments."
China’s central bank raised its interest rates for the first time in nine years. The one-year lending and deposit rates will rise 0.27 percentage points to 5.58% and 2.25% respectively. It is an effort to slow their latest quarterly GDP 9.1% growth rate and their 5.2% September inflation rate. I have written several times that China had already banned loans to the auto, cement, and steel industries earlier this year. As a result, there has been a significant reduction in auto sales. China cannot continue to consume over half of the world’s cement output and over one-third of steel production without shortages and a sharp jump in prices. Slowing growth does not equate to zero growth. The recent price reduction in oil, copper, aluminum, nickel, and other commodities is healthy. This does not change the long-term trend of rising industrialization in China and India, for example. Investment in those countries will increase over the coming decades. China has a need to add jobs in its economy. Industrial output rose 16% in the last 12 months. China may raise interest rates again, but they will be careful to only cool the economy. Investors betting against the long-term growth trends in China and India will be carried out.
Will Rogers: "Be thankful we're not getting all the government we're paying for."
There are at least 15 million new registered voters, and 1.5 million are in Florida and 800,000 are found in Ohio. Of the new registered voters nationwide, Democrats hold a 3 to 2 advantage over Republicans. The American Federation of State, County and Municipal Employees (AFSCME) is the nation’s fastest growing public service employee union with 1.4 million members. They have 93,000 members in Pennsylvania, 53,000 in Minnesota, 120,000 in Ohio, and 30,000 in Ohio. In 2000, 68% of AFSCME members voted for Gore. In 2004, 90% of AFSCME’s membership, for example, is registered to vote in Iowa, a higher percentage than in 2000. AFSCME has aggressively mobilized its members on a nationwide basis. Their votes will make a difference.
GM will temporarily idle 5 plants early in 2005, laying off 9,000 workers. Ford will soon announce its plan for plant shutdowns and layoffs. MT Picture Display is closing its plant in Horseheads, N.Y. and cutting 800 jobs as well as cutting nearly 300 jobs at its Troy, Ohio plant.
Salazar is now leading Coors in the race for Ben Nighthorse’s Senate seat in Colorado. Maybe this is an indicator that Kerry will take Colorado.
The Conference Board’s Help-Wanted Advertising Index dipped one point in September to 36. It was 37 one year ago. In the last three months, help-wanted advertising declined in eight of the nine U.S. regions. Ken Goldstein, Conference Board economist, stated “with the Leading Economic Index declining for four straight months, the labor market could even be losing momentum going into the final months of 2004, and not just in the Midwest and Upper Plains.” In September 2004, the proportion of labor markets with rising want-ad volume was 25%, down from 49% the prior month and down from 43% a year earlier. This is not a soft patch. Speculators betting on rising interest rates and a stronger economy are the same speculators who have predicted a Bush win and greater job creation. They will be proven wrong again and again until they run out of capital. Sheep have a way of finding the path to the slaughterhouse.
Robert Orben: "More than ever before, Americans are suffering from back problems, back taxes, back rent, back auto payments."
China’s central bank raised its interest rates for the first time in nine years. The one-year lending and deposit rates will rise 0.27 percentage points to 5.58% and 2.25% respectively. It is an effort to slow their latest quarterly GDP 9.1% growth rate and their 5.2% September inflation rate. I have written several times that China had already banned loans to the auto, cement, and steel industries earlier this year. As a result, there has been a significant reduction in auto sales. China cannot continue to consume over half of the world’s cement output and over one-third of steel production without shortages and a sharp jump in prices. Slowing growth does not equate to zero growth. The recent price reduction in oil, copper, aluminum, nickel, and other commodities is healthy. This does not change the long-term trend of rising industrialization in China and India, for example. Investment in those countries will increase over the coming decades. China has a need to add jobs in its economy. Industrial output rose 16% in the last 12 months. China may raise interest rates again, but they will be careful to only cool the economy. Investors betting against the long-term growth trends in China and India will be carried out.
Will Rogers: "Be thankful we're not getting all the government we're paying for."
10/29/04 This Presidential Election Will Not Be Close
There are at least 15 million new registered voters, and 1.5 million are in Florida and 800,000 are found in Ohio. Of the new registered voters nationwide, Democrats hold a 3 to 2 advantage over Republicans. The American Federation of State, County and Municipal Employees (AFSCME) is the nation’s fastest growing public service employee union with 1.4 million members. They have 93,000 members in Pennsylvania, 53,000 in Minnesota, 120,000 in Ohio, and 30,000 in Ohio. In 2000, 68% of AFSCME members voted for Gore. In 2004, 90% of AFSCME’s membership, for example, is registered to vote in Iowa, a higher percentage than in 2000. AFSCME has aggressively mobilized its members on a nationwide basis. Their votes will make a difference.
GM will temporarily idle 5 plants early in 2005, laying off 9,000 workers. Ford will soon announce its plan for plant shutdowns and layoffs. MT Picture Display is closing its plant in Horseheads, N.Y. and cutting 800 jobs as well as cutting nearly 300 jobs at its Troy, Ohio plant.
Salazar is now leading Coors in the race for Ben Nighthorse’s Senate seat in Colorado. Maybe this is an indicator that Kerry will take Colorado.
The Conference Board’s Help-Wanted Advertising Index dipped one point in September to 36. It was 37 one year ago. In the last three months, help-wanted advertising declined in eight of the nine U.S. regions. Ken Goldstein, Conference Board economist, stated “with the Leading Economic Index declining for four straight months, the labor market could even be losing momentum going into the final months of 2004, and not just in the Midwest and Upper Plains.” In September 2004, the proportion of labor markets with rising want-ad volume was 25%, down from 49% the prior month and down from 43% a year earlier. This is not a soft patch. Speculators betting on rising interest rates and a stronger economy are the same speculators who have predicted a Bush win and greater job creation. They will be proven wrong again and again until they run out of capital. Sheep have a way of finding the path to the slaughterhouse.
Robert Orben: "More than ever before, Americans are suffering from back problems, back taxes, back rent, back auto payments."
China’s central bank raised its interest rates for the first time in nine years. The one-year lending and deposit rates will rise 0.27 percentage points to 5.58% and 2.25% respectively. It is an effort to slow their latest quarterly GDP 9.1% growth rate and their 5.2% September inflation rate. I have written several times that China had already banned loans to the auto, cement, and steel industries earlier this year. As a result, there has been a significant reduction in auto sales. China cannot continue to consume over half of the world’s cement output and over one-third of steel production without shortages and a sharp jump in prices. Slowing growth does not equate to zero growth. The recent price reduction in oil, copper, aluminum, nickel, and other commodities is healthy. This does not change the long-term trend of rising industrialization in China and India, for example. Investment in those countries will increase over the coming decades. China has a need to add jobs in its economy. Industrial output rose 16% in the last 12 months. China may raise interest rates again, but they will be careful to only cool the economy. Investors betting against the long-term growth trends in China and India will be carried out.
Will Rogers: "Be thankful we're not getting all the government we're paying for."
There are at least 15 million new registered voters, and 1.5 million are in Florida and 800,000 are found in Ohio. Of the new registered voters nationwide, Democrats hold a 3 to 2 advantage over Republicans. The American Federation of State, County and Municipal Employees (AFSCME) is the nation’s fastest growing public service employee union with 1.4 million members. They have 93,000 members in Pennsylvania, 53,000 in Minnesota, 120,000 in Ohio, and 30,000 in Ohio. In 2000, 68% of AFSCME members voted for Gore. In 2004, 90% of AFSCME’s membership, for example, is registered to vote in Iowa, a higher percentage than in 2000. AFSCME has aggressively mobilized its members on a nationwide basis. Their votes will make a difference.
GM will temporarily idle 5 plants early in 2005, laying off 9,000 workers. Ford will soon announce its plan for plant shutdowns and layoffs. MT Picture Display is closing its plant in Horseheads, N.Y. and cutting 800 jobs as well as cutting nearly 300 jobs at its Troy, Ohio plant.
Salazar is now leading Coors in the race for Ben Nighthorse’s Senate seat in Colorado. Maybe this is an indicator that Kerry will take Colorado.
The Conference Board’s Help-Wanted Advertising Index dipped one point in September to 36. It was 37 one year ago. In the last three months, help-wanted advertising declined in eight of the nine U.S. regions. Ken Goldstein, Conference Board economist, stated “with the Leading Economic Index declining for four straight months, the labor market could even be losing momentum going into the final months of 2004, and not just in the Midwest and Upper Plains.” In September 2004, the proportion of labor markets with rising want-ad volume was 25%, down from 49% the prior month and down from 43% a year earlier. This is not a soft patch. Speculators betting on rising interest rates and a stronger economy are the same speculators who have predicted a Bush win and greater job creation. They will be proven wrong again and again until they run out of capital. Sheep have a way of finding the path to the slaughterhouse.
Robert Orben: "More than ever before, Americans are suffering from back problems, back taxes, back rent, back auto payments."
China’s central bank raised its interest rates for the first time in nine years. The one-year lending and deposit rates will rise 0.27 percentage points to 5.58% and 2.25% respectively. It is an effort to slow their latest quarterly GDP 9.1% growth rate and their 5.2% September inflation rate. I have written several times that China had already banned loans to the auto, cement, and steel industries earlier this year. As a result, there has been a significant reduction in auto sales. China cannot continue to consume over half of the world’s cement output and over one-third of steel production without shortages and a sharp jump in prices. Slowing growth does not equate to zero growth. The recent price reduction in oil, copper, aluminum, nickel, and other commodities is healthy. This does not change the long-term trend of rising industrialization in China and India, for example. Investment in those countries will increase over the coming decades. China has a need to add jobs in its economy. Industrial output rose 16% in the last 12 months. China may raise interest rates again, but they will be careful to only cool the economy. Investors betting against the long-term growth trends in China and India will be carried out.
Will Rogers: "Be thankful we're not getting all the government we're paying for."
Thursday, October 28, 2004
10/28/04 Military Spending
Why did U.S. durable goods orders rise 0.2% in September? Orders derived from military spending increased 26.5% in the month. Total orders excluding military goods fell 0.9%, the biggest drop since April. U.S. September durable goods shipments fell 1.2%, the biggest drop in 13 months.The private sector soft patch continues. It is not surprising that the latest LA Times poll reveals that 51% of those polled disapprove of the way Bush is handling the economy. An Annenberg Center survey from Tuesday found 41% stated Bush’s policies have made the economy worse and 34% made the economy better.
Despite a decline in commercial airplane revenue, Boeing managed to earn 56 cents a share, up from 32 cents a year ago. How did this happen? The company enjoyed strong growth in its defense business PLUS a 2-cent gain from the sale of the company’s commercial finance unit, a 14-cent gain from state tax settlements, and the fact they only paid $7 million in taxes on $445 million of pre-tax income. In other words, based on the latest quarter, Boeing stock is selling at 20 times 2005 pre-tax income. Unfortunately, Boeing is not a growth company. It’s middle name is not Google. It is shocking that Boeing stock has been the second-best performing stock in the Dow this year. That doesn’t say much for the other companies in the Dow.
DaimlerChrysler stated that demand for the fourth quarter in the auto business “seems likely to weaken.” At least one company is telling the truth.
Bush on March 13, 2002: “And again, I don’t know where he is. I- I’ll repeat what I said. I truly am not that concerned about him.”
Bush on October 13, 2004: “Gosh, I don’t think I ever said I’m not worried about Osama bin Laden. That’s kind of one of those exaggerations.” Gee. Golly. Gosh.
Teddy Roosevelt: “A typical vice of American politics is the avoidance of saying anything real on real issues.”
U.S. new home sales rose in September to the third highest on record. Low mortgage rates continue to assist home buyers. However, the median selling price declined 8.4% to $197,000 from $215,900 the previous month. The main reason for the decline was a larger percentage of lower-priced starter homes were sold during the month. A word of caution is in order. The National Association of Home Builders index of builder optimism rose to 72 in October, the highest level in 2004.
Asia Times: “As far as the American military was concerned Pir Baksh (the man responsible for intelligence operations in eastern Afghanistan) was adamant: ‘Al-Qaeda escaped right out from under their feet.’ So it was a major Pentagon blunder. It was a major Rumsfeld-Franks blunder. It was a major White House blunder. And there were two reasons for it: 1) The Pentagon outsourced the war in eastern Afghanistan to the wrong warlords, who were collecting suitcases full of cash with one hand and spreading disinformation with the other. 2) The White House’s and the Pentagon’s attention were already directed toward toppling Saddam…it’s a serious charge that debunks the whole myth of Bush as a strong and resolute commander-in-chief of the ‘war on terror.’”
Teddy Roosevelt: “Nobody cares how much you know, until they know how much you care.”
Yesterday was a day for volatility. Crude dropped 5% in price. The yen hit a six-month high versus the dollar. Ten-year treasury yields rose from 3.97% to 4.09% and the Dow had its second straight day of triple digit gains accompanied by a 40-point rally in the Nasdaq. It’s important that strong bear market rallies occur. It brings renewed optimism and hope and that improves liquidity as well as making the pricing of puts more reasonable. Maybe the price of crude, natural gas, and heating oil has topped out- at least for now. Do you want to bet your portfolio on it?
Bill Gates: “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
Celanese has decided to restructure, and this will result I the elimination of 1,100 jobs, or 10% of its work force. Celanese Acetate will lay off 200 to 225 employees at its Rock Hill, NC operations. Kemet will lay off 10% of its work force. LSI Logic will cut 510 jobs, or 11% of its work force.
John D. Rockefeller: “The way to make money is to buy when blood is running in the streets.”
The Labor Dept reported that initial claims for state unemployment benefits rose by 20,000 to 350,000 last week. The number of former workers receiving state unemployment checks rose by 38,000 to 2.82 million. The Labor Dept could not think of a reason for the rise in initial claims for state unemployment because there weren't any hurricanes, typhoons, earthquakes, or soft patches.
Winston Churchill: "Some people's idea of free speech is that they are free to say anything they like, but if anyone says anything back, that is an outrage."
Why did U.S. durable goods orders rise 0.2% in September? Orders derived from military spending increased 26.5% in the month. Total orders excluding military goods fell 0.9%, the biggest drop since April. U.S. September durable goods shipments fell 1.2%, the biggest drop in 13 months.The private sector soft patch continues. It is not surprising that the latest LA Times poll reveals that 51% of those polled disapprove of the way Bush is handling the economy. An Annenberg Center survey from Tuesday found 41% stated Bush’s policies have made the economy worse and 34% made the economy better.
Despite a decline in commercial airplane revenue, Boeing managed to earn 56 cents a share, up from 32 cents a year ago. How did this happen? The company enjoyed strong growth in its defense business PLUS a 2-cent gain from the sale of the company’s commercial finance unit, a 14-cent gain from state tax settlements, and the fact they only paid $7 million in taxes on $445 million of pre-tax income. In other words, based on the latest quarter, Boeing stock is selling at 20 times 2005 pre-tax income. Unfortunately, Boeing is not a growth company. It’s middle name is not Google. It is shocking that Boeing stock has been the second-best performing stock in the Dow this year. That doesn’t say much for the other companies in the Dow.
DaimlerChrysler stated that demand for the fourth quarter in the auto business “seems likely to weaken.” At least one company is telling the truth.
Bush on March 13, 2002: “And again, I don’t know where he is. I- I’ll repeat what I said. I truly am not that concerned about him.”
Bush on October 13, 2004: “Gosh, I don’t think I ever said I’m not worried about Osama bin Laden. That’s kind of one of those exaggerations.” Gee. Golly. Gosh.
Teddy Roosevelt: “A typical vice of American politics is the avoidance of saying anything real on real issues.”
U.S. new home sales rose in September to the third highest on record. Low mortgage rates continue to assist home buyers. However, the median selling price declined 8.4% to $197,000 from $215,900 the previous month. The main reason for the decline was a larger percentage of lower-priced starter homes were sold during the month. A word of caution is in order. The National Association of Home Builders index of builder optimism rose to 72 in October, the highest level in 2004.
Asia Times: “As far as the American military was concerned Pir Baksh (the man responsible for intelligence operations in eastern Afghanistan) was adamant: ‘Al-Qaeda escaped right out from under their feet.’ So it was a major Pentagon blunder. It was a major Rumsfeld-Franks blunder. It was a major White House blunder. And there were two reasons for it: 1) The Pentagon outsourced the war in eastern Afghanistan to the wrong warlords, who were collecting suitcases full of cash with one hand and spreading disinformation with the other. 2) The White House’s and the Pentagon’s attention were already directed toward toppling Saddam…it’s a serious charge that debunks the whole myth of Bush as a strong and resolute commander-in-chief of the ‘war on terror.’”
Teddy Roosevelt: “Nobody cares how much you know, until they know how much you care.”
Yesterday was a day for volatility. Crude dropped 5% in price. The yen hit a six-month high versus the dollar. Ten-year treasury yields rose from 3.97% to 4.09% and the Dow had its second straight day of triple digit gains accompanied by a 40-point rally in the Nasdaq. It’s important that strong bear market rallies occur. It brings renewed optimism and hope and that improves liquidity as well as making the pricing of puts more reasonable. Maybe the price of crude, natural gas, and heating oil has topped out- at least for now. Do you want to bet your portfolio on it?
Bill Gates: “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
Celanese has decided to restructure, and this will result I the elimination of 1,100 jobs, or 10% of its work force. Celanese Acetate will lay off 200 to 225 employees at its Rock Hill, NC operations. Kemet will lay off 10% of its work force. LSI Logic will cut 510 jobs, or 11% of its work force.
John D. Rockefeller: “The way to make money is to buy when blood is running in the streets.”
The Labor Dept reported that initial claims for state unemployment benefits rose by 20,000 to 350,000 last week. The number of former workers receiving state unemployment checks rose by 38,000 to 2.82 million. The Labor Dept could not think of a reason for the rise in initial claims for state unemployment because there weren't any hurricanes, typhoons, earthquakes, or soft patches.
Winston Churchill: "Some people's idea of free speech is that they are free to say anything they like, but if anyone says anything back, that is an outrage."
Wednesday, October 27, 2004
10/27/04 The Polls Will Be Proven Wrong
I invest only my money. I do all my own research. My conclusions are based on a variety of data. In the end, my gut feel is the telling factor. Fortunately, God has endowed me with a gut that has not led me down the wrong path too often. I am not a political analyst. That gives me an advantage. I am not tied to historical methodologies. It will be proven that the 2004 presidential election will be different from all others. Polls may miss first time voters. The polls miss cell phone users. Curtis Gans, director of the nonpartisan Committee for the Study of the American Electorate, stated “the normal screening questions deal with past behavior. That’s going to understate the turnout this time around.” In Ohio, the turnout in presidential elections declined from 70% of all voting age people in 1960 to 56% in 2000. Since the start of this year, election officials report that in Ohio the number of registered voters have increased by 12% to at least 7.8 million. That’s only a part of the story. Michael W. Traugott, a senior researcher at the University of Michigan’s Center for Political Studies stated “the Democratic Party essentially registered more people than the Republicans.” Counties in Ohio that historically vote for Democratic presidential candidates have been registering three new voters for every two new voters in Republican-voting counties. Depending on how you count seldom-seen voters, the outcome of a poll will change dramatically. If you include only those who always participate in major elections and are very certain of voting this year, then Bush has a slight lead. If you include all registered voters- regardless of their voting record- then Kerry has a 5 point advantage. In essence, much depends on the definition of a likely voter. In addition, as David Krane of the Harris Poll noted, “we’ve all been working for the past 20 years on a low-turnout model.” The outcome of the election will come down to turnout. I anticipate that the turnout will be much larger than forecast, and this will prove a big factor in the Kerry win.
There are other clues pointing to a Kerry victory. In newspaper endorsements, Kerry holds a 17 million to 12 million lead by circulation. At least 35 papers that backed Bush in 2000 have now switched to Kerry. Another nine that supported Bush have declared their neutrality this year. Only five have gone from Gore to Bush. In Florida, every paper has endorsed Kerry except for the Ocala Star-Banner and the Lakeland Ledger. The Tampa Tribune is neutral. Pennsylvania’s newspapers have overwhelmingly endorsed Kerry with the exception of two papers- in York and Easton. Michigan papers are for Kerry. Ohio is more interesting. Bush got endorsements from newspapers in Cincinnati and Canton, The Plain Dealer is neutral, Kerry was endorsed in Dayton, Toledo, and Akron, and the Columbus Dispatch endorsement of Bush carried much criticism of him. In Iowa, the only endorsement Bush received was in Cedar Rapids.
Then there are other less likely clues. BlueBeat.com is a free hi-fidelity digital radio service. Tens of thousands of citizens are voting with their ears by choosing Republican and Democratic-themed musical play lists on the site’s “Red, White, and BlueBeat.com.” They feature music by artists favored by the Bush/Cheney and the Kerry/Edwards campaigns, as well as partisan musicians on both sides. Bush’s stream currently trails Kerry’s by 47% to 53%.
According to the number of Internet downloads of a popular cell phone and PDA game called Political Dodgeball, the Democrats have recently taken a significant lead with a surge in the number of Democratic versions downloaded.
I also focus on the state of the working class in 2004 America. Today the Keystone Research Center will release a new version of its “state of working Pennsylvania 2004.” It includes the latest employment data from the Commonwealth also released today. Here are some of the important facts and all leading to Kerry winning Pennsylvania:
Pennsylvania has fewer jobs than when the last recession began in March 2001. In fact, there are 71,000 fewer jobs. The state has 154,600 fewer manufacturing jobs in September 2004 than March 2001. Since January 2001, jobs have declined by 1.2% while working-age population growth has grown 2.4%. Across the state unemployment is up since August 2001 and wages are down in many areas.
Another nail in Bush’s re-election coffin was the Conference Board’s gauge of consumer confidence falling to 92.8 in October, the lowest in seven months, from 96.7 in September. It was the third straight monthly decline in confidence. The consumer expectations component declined to 92 from 97.7. This consumer confidence survey is based on a representative sample of 5,000 U.S. households. Consumers stated the job market and their income prospects would worsen in the coming months. It should be noted that the Conference Board’s confidence index was 115.7 when Bush took office.
Stephen Roach, Morgan Stanley’s chief global economist, believes there is a 40% chance of a global recession in 2005.
Peter W. Galbraith: “In spite of the chaos that followed the war, I am sure that Iraq is better off without Saddam Hussein. It is my own country that is worse off-- 1,100 dead soldiers, billions added to the deficit, and the enmity of much of the world. Someone out there has nuclear bomb-making equipment, and they may not be well disposed toward the U.S. Much of this could have been avoided with a competent postwar strategy. But without having planned or provided enough troops, we could be a lot safer if we hadn’t gone to war.”
Natural gas futures are at a 20-month high and crude remains at or above $55 a barrel. Heating oil continues at record high prices.
I invest only my money. I do all my own research. My conclusions are based on a variety of data. In the end, my gut feel is the telling factor. Fortunately, God has endowed me with a gut that has not led me down the wrong path too often. I am not a political analyst. That gives me an advantage. I am not tied to historical methodologies. It will be proven that the 2004 presidential election will be different from all others. Polls may miss first time voters. The polls miss cell phone users. Curtis Gans, director of the nonpartisan Committee for the Study of the American Electorate, stated “the normal screening questions deal with past behavior. That’s going to understate the turnout this time around.” In Ohio, the turnout in presidential elections declined from 70% of all voting age people in 1960 to 56% in 2000. Since the start of this year, election officials report that in Ohio the number of registered voters have increased by 12% to at least 7.8 million. That’s only a part of the story. Michael W. Traugott, a senior researcher at the University of Michigan’s Center for Political Studies stated “the Democratic Party essentially registered more people than the Republicans.” Counties in Ohio that historically vote for Democratic presidential candidates have been registering three new voters for every two new voters in Republican-voting counties. Depending on how you count seldom-seen voters, the outcome of a poll will change dramatically. If you include only those who always participate in major elections and are very certain of voting this year, then Bush has a slight lead. If you include all registered voters- regardless of their voting record- then Kerry has a 5 point advantage. In essence, much depends on the definition of a likely voter. In addition, as David Krane of the Harris Poll noted, “we’ve all been working for the past 20 years on a low-turnout model.” The outcome of the election will come down to turnout. I anticipate that the turnout will be much larger than forecast, and this will prove a big factor in the Kerry win.
There are other clues pointing to a Kerry victory. In newspaper endorsements, Kerry holds a 17 million to 12 million lead by circulation. At least 35 papers that backed Bush in 2000 have now switched to Kerry. Another nine that supported Bush have declared their neutrality this year. Only five have gone from Gore to Bush. In Florida, every paper has endorsed Kerry except for the Ocala Star-Banner and the Lakeland Ledger. The Tampa Tribune is neutral. Pennsylvania’s newspapers have overwhelmingly endorsed Kerry with the exception of two papers- in York and Easton. Michigan papers are for Kerry. Ohio is more interesting. Bush got endorsements from newspapers in Cincinnati and Canton, The Plain Dealer is neutral, Kerry was endorsed in Dayton, Toledo, and Akron, and the Columbus Dispatch endorsement of Bush carried much criticism of him. In Iowa, the only endorsement Bush received was in Cedar Rapids.
Then there are other less likely clues. BlueBeat.com is a free hi-fidelity digital radio service. Tens of thousands of citizens are voting with their ears by choosing Republican and Democratic-themed musical play lists on the site’s “Red, White, and BlueBeat.com.” They feature music by artists favored by the Bush/Cheney and the Kerry/Edwards campaigns, as well as partisan musicians on both sides. Bush’s stream currently trails Kerry’s by 47% to 53%.
According to the number of Internet downloads of a popular cell phone and PDA game called Political Dodgeball, the Democrats have recently taken a significant lead with a surge in the number of Democratic versions downloaded.
I also focus on the state of the working class in 2004 America. Today the Keystone Research Center will release a new version of its “state of working Pennsylvania 2004.” It includes the latest employment data from the Commonwealth also released today. Here are some of the important facts and all leading to Kerry winning Pennsylvania:
Pennsylvania has fewer jobs than when the last recession began in March 2001. In fact, there are 71,000 fewer jobs. The state has 154,600 fewer manufacturing jobs in September 2004 than March 2001. Since January 2001, jobs have declined by 1.2% while working-age population growth has grown 2.4%. Across the state unemployment is up since August 2001 and wages are down in many areas.
Another nail in Bush’s re-election coffin was the Conference Board’s gauge of consumer confidence falling to 92.8 in October, the lowest in seven months, from 96.7 in September. It was the third straight monthly decline in confidence. The consumer expectations component declined to 92 from 97.7. This consumer confidence survey is based on a representative sample of 5,000 U.S. households. Consumers stated the job market and their income prospects would worsen in the coming months. It should be noted that the Conference Board’s confidence index was 115.7 when Bush took office.
Stephen Roach, Morgan Stanley’s chief global economist, believes there is a 40% chance of a global recession in 2005.
Peter W. Galbraith: “In spite of the chaos that followed the war, I am sure that Iraq is better off without Saddam Hussein. It is my own country that is worse off-- 1,100 dead soldiers, billions added to the deficit, and the enmity of much of the world. Someone out there has nuclear bomb-making equipment, and they may not be well disposed toward the U.S. Much of this could have been avoided with a competent postwar strategy. But without having planned or provided enough troops, we could be a lot safer if we hadn’t gone to war.”
Natural gas futures are at a 20-month high and crude remains at or above $55 a barrel. Heating oil continues at record high prices.
Tuesday, October 26, 2004
10/26/04 The Terror And Fear Cards Will Prove A Losing Hand
I believe John Kerry will garner at least 289 electoral votes a week from today.
According to ComScore Networks, Kerry leads among women voters in Florida 50% to 45.5% for Bush.
The Financial Times states “John Kerry is a better choice for U.S. president…Mr. Bush’s crusading moralism has alienated the rest of the world, and a large constituency at home already fearful about the influence of the religious right. The scandal at Abu Gharaib has stained America’s reputation for a generation. The administration’s disdain for international law has shaken faith in American values. Overall, the U.S.-led war on terror misreads the battle against al-Qaeda as a clash of civilizations rather than a battle within the Muslim world. Mr. Kerry understands such nuances. He also understands that American power depends on American credibility.”
George Burns: “Too bad the only people who know how to run the country are busy driving cabs and cutting hair.”
According to the Pentagon and congressional officials, early next year the Bush administration intends to seek about $70 billion in emergency funding for the wars in Iraq and Afghanistan. According to Yale University economist William Nordhaus, in inflation adjusted terms, WW I cost just under $200 million for the U.S. The Viet Nam war cost roughly $500 million from 1964 to 1972. In another year from now, in 2 ½ years since we invaded Iraq, that war could cost nearly $250 billion. By my math, that number appears low.
According to a holiday survey of 3,500 respondents conducted by the NPD Group, the findings suggest “there’s no real frenzy to go out and grab an item, simply because there really aren’t any hot items this year. The absence of an ‘I can’t live without this’ factor means consumers will also spend less on themselves this year than last year.” According to a separate survey of 31,000 consumers by the NPD Group, 26% of shoppers stated they would shop for themselves over the holidays, down from 29% last year. Gift cards will remain popular.
Peter Lynch: “Go for a business that any idiot can run- because sooner or later, an idiot is probably going to run it.”
According to Petrologistics, OPEC pumped 200,000 barrels per day more in October than in September.
How do 377 tons of explosives disappear? Maybe they’re buried with Jimmy Hoffa.
The Christian Science Monitor reports that there are at least 8 million illegal aliens living in America today- and their numbers are growing by at least 400,000 a year. Maybe 500,000. No one knows for sure. How many yearly visits do they make to hospital emergency rooms?
W.C. Fields: “I never drink water, fish fuck in it.”
The McDonald Financial Group Affluent Customer Confidence Index, a quarterly measurement, showed the first decline since April 2003. The affluent, defined as those with at least $500,000 to invest, showed an increased pessimism toward the economy. Out of 100 total points, the index reached only 48, a 13 point decline since the last survey in July. In addition, 76% are concerned about the current state of the economy, compared with 64% in the July survey.
George Soros: “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
According to Foreclosures.com, “only 18% of California households can afford a median priced home in our state. When affordability gets that low, a price correction is inevitable.” The company stated sales volume is falling in several southern California markets, and “falling sales volume is often a precursor to falling prices.” The same could be said for the stock market. In rising markets, volume is greater.
According to a senior Commerce Ministry official, China expects its trade surplus to be around $10 billion in 2004. In 2003, China’s trade surplus fell 16% to about $25 billion.
Sales of U.S. existing homes increased 3.1% in September to the third highest rate ever. Median sales prices rose 8.6% year-over-year to $186,000.
George Soros: “His (Bush’s) campaign is based on the assumption that people do not really care about the truth and they will believe practically anything if it is repeated often enough, particularly by a President at a time of war. There must be something wrong with us if we fall for it.”
The International Council of Shopping Centers and UBS reported that sales at U.S. retail chain stores fell 0.6% last week after declining 0.2% the previous week. They probably will blame the drop on earthquakes, avalanches, typhoons, hurricanes, and Bush campaigning on terror and fear.
I believe John Kerry will garner at least 289 electoral votes a week from today.
According to ComScore Networks, Kerry leads among women voters in Florida 50% to 45.5% for Bush.
The Financial Times states “John Kerry is a better choice for U.S. president…Mr. Bush’s crusading moralism has alienated the rest of the world, and a large constituency at home already fearful about the influence of the religious right. The scandal at Abu Gharaib has stained America’s reputation for a generation. The administration’s disdain for international law has shaken faith in American values. Overall, the U.S.-led war on terror misreads the battle against al-Qaeda as a clash of civilizations rather than a battle within the Muslim world. Mr. Kerry understands such nuances. He also understands that American power depends on American credibility.”
George Burns: “Too bad the only people who know how to run the country are busy driving cabs and cutting hair.”
According to the Pentagon and congressional officials, early next year the Bush administration intends to seek about $70 billion in emergency funding for the wars in Iraq and Afghanistan. According to Yale University economist William Nordhaus, in inflation adjusted terms, WW I cost just under $200 million for the U.S. The Viet Nam war cost roughly $500 million from 1964 to 1972. In another year from now, in 2 ½ years since we invaded Iraq, that war could cost nearly $250 billion. By my math, that number appears low.
According to a holiday survey of 3,500 respondents conducted by the NPD Group, the findings suggest “there’s no real frenzy to go out and grab an item, simply because there really aren’t any hot items this year. The absence of an ‘I can’t live without this’ factor means consumers will also spend less on themselves this year than last year.” According to a separate survey of 31,000 consumers by the NPD Group, 26% of shoppers stated they would shop for themselves over the holidays, down from 29% last year. Gift cards will remain popular.
Peter Lynch: “Go for a business that any idiot can run- because sooner or later, an idiot is probably going to run it.”
According to Petrologistics, OPEC pumped 200,000 barrels per day more in October than in September.
How do 377 tons of explosives disappear? Maybe they’re buried with Jimmy Hoffa.
The Christian Science Monitor reports that there are at least 8 million illegal aliens living in America today- and their numbers are growing by at least 400,000 a year. Maybe 500,000. No one knows for sure. How many yearly visits do they make to hospital emergency rooms?
W.C. Fields: “I never drink water, fish fuck in it.”
The McDonald Financial Group Affluent Customer Confidence Index, a quarterly measurement, showed the first decline since April 2003. The affluent, defined as those with at least $500,000 to invest, showed an increased pessimism toward the economy. Out of 100 total points, the index reached only 48, a 13 point decline since the last survey in July. In addition, 76% are concerned about the current state of the economy, compared with 64% in the July survey.
George Soros: “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
According to Foreclosures.com, “only 18% of California households can afford a median priced home in our state. When affordability gets that low, a price correction is inevitable.” The company stated sales volume is falling in several southern California markets, and “falling sales volume is often a precursor to falling prices.” The same could be said for the stock market. In rising markets, volume is greater.
According to a senior Commerce Ministry official, China expects its trade surplus to be around $10 billion in 2004. In 2003, China’s trade surplus fell 16% to about $25 billion.
Sales of U.S. existing homes increased 3.1% in September to the third highest rate ever. Median sales prices rose 8.6% year-over-year to $186,000.
George Soros: “His (Bush’s) campaign is based on the assumption that people do not really care about the truth and they will believe practically anything if it is repeated often enough, particularly by a President at a time of war. There must be something wrong with us if we fall for it.”
The International Council of Shopping Centers and UBS reported that sales at U.S. retail chain stores fell 0.6% last week after declining 0.2% the previous week. They probably will blame the drop on earthquakes, avalanches, typhoons, hurricanes, and Bush campaigning on terror and fear.
10/26/04 The Terror And Fear Cards Will Prove A Losing Hand
I believe John Kerry will garner at least 289 electoral votes a week from today.
According to ComScore Networks, Kerry leads among women voters in Florida 50% to 45.5% for Bush.
The Financial Times states “John Kerry is a better choice for U.S. president…Mr. Bush’s crusading moralism has alienated the rest of the world, and a large constituency at home already fearful about the influence of the religious right. The scandal at Abu Gharaib has stained America’s reputation for a generation. The administration’s disdain for international law has shaken faith in American values. Overall, the U.S.-led war on terror misreads the battle against al-Qaeda as a clash of civilizations rather than a battle within the Muslim world. Mr. Kerry understands such nuances. He also understands that American power depends on American credibility.”
George Burns: “Too bad the only people who know how to run the country are busy driving cabs and cutting hair.”
According to the Pentagon and congressional officials, early next year the Bush administration intends to seek about $70 billion in emergency funding for the wars in Iraq and Afghanistan. According to Yale University economist William Nordhaus, in inflation adjusted terms, WW I cost just under $200 million for the U.S. The Viet Nam war cost roughly $500 million from 1964 to 1972. In another year from now, in 2 ½ years since we invaded Iraq, that war could cost nearly $250 billion. By my math, that number appears low.
According to a holiday survey of 3,500 respondents conducted by the NPD Group, the findings suggest “there’s no real frenzy to go out and grab an item, simply because there really aren’t any hot items this year. The absence of an ‘I can’t live without this’ factor means consumers will also spend less on themselves this year than last year.” According to a separate survey of 31,000 consumers by the NPD Group, 26% of shoppers stated they would shop for themselves over the holidays, down from 29% last year. Gift cards will remain popular.
Peter Lynch: “Go for a business that any idiot can run- because sooner or later, an idiot is probably going to run it.”
According to Petrologistics, OPEC pumped 200,000 barrels per day more in October than in September.
How do 377 tons of explosives disappear? Maybe they’re buried with Jimmy Hoffa.
The Christian Science Monitor reports that there are at least 8 million illegal aliens living in America today- and their numbers are growing by at least 400,000 a year. Maybe 500,000. No one knows for sure. How many yearly visits do they make to hospital emergency rooms?
W.C. Fields: “I never drink water, fish fuck in it.”
The McDonald Financial Group Affluent Customer Confidence Index, a quarterly measurement, showed the first decline since April 2003. The affluent, defined as those with at least $500,000 to invest, showed an increased pessimism toward the economy. Out of 100 total points, the index reached only 48, a 13 point decline since the last survey in July. In addition, 76% are concerned about the current state of the economy, compared with 64% in the July survey.
George Soros: “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
According to Foreclosures.com, “only 18% of California households can afford a median priced home in our state. When affordability gets that low, a price correction is inevitable.” The company stated sales volume is falling in several southern California markets, and “falling sales volume is often a precursor to falling prices.” The same could be said for the stock market. In rising markets, volume is greater.
According to a senior Commerce Ministry official, China expects its trade surplus to be around $10 billion in 2004. In 2003, China’s trade surplus fell 16% to about $25 billion.
Sales of U.S. existing homes increased 3.1% in September to the third highest rate ever. Median sales prices rose 8.6% year-over-year to $186,000.
George Soros: “His (Bush’s) campaign is based on the assumption that people do not really care about the truth and they will believe practically anything if it is repeated often enough, particularly by a President at a time of war. There must be something wrong with us if we fall for it.”
The International Council of Shopping Centers and UBS reported that sales at U.S. retail chain stores fell 0.6% last week after declining 0.2% the previous week. They probably will blame the drop on earthquakes, avalanches, typhoons, hurricanes, and Bush campaigning on terror and fear.
I believe John Kerry will garner at least 289 electoral votes a week from today.
According to ComScore Networks, Kerry leads among women voters in Florida 50% to 45.5% for Bush.
The Financial Times states “John Kerry is a better choice for U.S. president…Mr. Bush’s crusading moralism has alienated the rest of the world, and a large constituency at home already fearful about the influence of the religious right. The scandal at Abu Gharaib has stained America’s reputation for a generation. The administration’s disdain for international law has shaken faith in American values. Overall, the U.S.-led war on terror misreads the battle against al-Qaeda as a clash of civilizations rather than a battle within the Muslim world. Mr. Kerry understands such nuances. He also understands that American power depends on American credibility.”
George Burns: “Too bad the only people who know how to run the country are busy driving cabs and cutting hair.”
According to the Pentagon and congressional officials, early next year the Bush administration intends to seek about $70 billion in emergency funding for the wars in Iraq and Afghanistan. According to Yale University economist William Nordhaus, in inflation adjusted terms, WW I cost just under $200 million for the U.S. The Viet Nam war cost roughly $500 million from 1964 to 1972. In another year from now, in 2 ½ years since we invaded Iraq, that war could cost nearly $250 billion. By my math, that number appears low.
According to a holiday survey of 3,500 respondents conducted by the NPD Group, the findings suggest “there’s no real frenzy to go out and grab an item, simply because there really aren’t any hot items this year. The absence of an ‘I can’t live without this’ factor means consumers will also spend less on themselves this year than last year.” According to a separate survey of 31,000 consumers by the NPD Group, 26% of shoppers stated they would shop for themselves over the holidays, down from 29% last year. Gift cards will remain popular.
Peter Lynch: “Go for a business that any idiot can run- because sooner or later, an idiot is probably going to run it.”
According to Petrologistics, OPEC pumped 200,000 barrels per day more in October than in September.
How do 377 tons of explosives disappear? Maybe they’re buried with Jimmy Hoffa.
The Christian Science Monitor reports that there are at least 8 million illegal aliens living in America today- and their numbers are growing by at least 400,000 a year. Maybe 500,000. No one knows for sure. How many yearly visits do they make to hospital emergency rooms?
W.C. Fields: “I never drink water, fish fuck in it.”
The McDonald Financial Group Affluent Customer Confidence Index, a quarterly measurement, showed the first decline since April 2003. The affluent, defined as those with at least $500,000 to invest, showed an increased pessimism toward the economy. Out of 100 total points, the index reached only 48, a 13 point decline since the last survey in July. In addition, 76% are concerned about the current state of the economy, compared with 64% in the July survey.
George Soros: “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
According to Foreclosures.com, “only 18% of California households can afford a median priced home in our state. When affordability gets that low, a price correction is inevitable.” The company stated sales volume is falling in several southern California markets, and “falling sales volume is often a precursor to falling prices.” The same could be said for the stock market. In rising markets, volume is greater.
According to a senior Commerce Ministry official, China expects its trade surplus to be around $10 billion in 2004. In 2003, China’s trade surplus fell 16% to about $25 billion.
Sales of U.S. existing homes increased 3.1% in September to the third highest rate ever. Median sales prices rose 8.6% year-over-year to $186,000.
George Soros: “His (Bush’s) campaign is based on the assumption that people do not really care about the truth and they will believe practically anything if it is repeated often enough, particularly by a President at a time of war. There must be something wrong with us if we fall for it.”
The International Council of Shopping Centers and UBS reported that sales at U.S. retail chain stores fell 0.6% last week after declining 0.2% the previous week. They probably will blame the drop on earthquakes, avalanches, typhoons, hurricanes, and Bush campaigning on terror and fear.
Monday, October 25, 2004
10/25/04 We Are Responsible For the Forgery On the Wall
As Leonard Pitts, Jr., syndicated columnist for the Miami Herald, points out, “we are the reason Bush gets away with it.” He writes that, in March 2003, Pat Robertson advised Bush to prepare the nation for the likelihood of casualties in Iraq. Bush replied “we’re not going to have any casualties.” So far, 1,105 U.S. soldiers have been killed in Iraq. In addition, there are over 9,000 casualties. Pitts goes on “we bought a forgery, a fake ‘War on Terror’ for which we paid, and are still paying. Now we are loath to admit what anybody can see…For four years, he and cronies have blithely changed or suppressed government reports- on health, science, the environment- that counter the world view. Just last month, when intelligence agents issued a report whose pessimism was at odds with the party line on Iraq, the president dismissed it by saying these experts were ‘just guessing.’ On Planet Bush, a thing is true because the president believes it t be true and any facts marshaled in opposition are irrelevant. One’s job as the president’s adviser, apparently, is simply to nod vigorously. Ask yourself why we’re keeping that forgery on the wall. At this point, the only people being fooled are those who want to be.”
Mark Twain: "Denial ain't just a river in Egypt."
In a study by NPD Group, 42% of those polled said the price of gasoline will impact holiday spending. About a third of the consumers polled said they would wait for items to go on sale before making purchases.
Venture capital spending in Silicon Valley start-ups in the third quarter was down 24% from the prior quarter, according to an Ernst & Young survey.
For the ninth consecutive day the dollar fell against the euro to $1.28. It was an eight month high for the euro. The dollar dropped to 106.24 yen. It was the first time in six months it had traded below 107 yen. In addition, the dollar traded at four year lows against the Korean won and the Singapore dollar and to an eight year low against the Swiss franc. San Francisco Fed President Janet Yellen stated the dollar was still “relatively high despite our large and growing trade deficit.” There is increasing concern about capital inflows to the U.S.
Gold rallied to a six month high of $429 per ounce and crude remained at all-time high levels.
This week the U.S. Conference Board’s gauge of consumer sentiment in October will most probably show a steep decline. The NAPM-Chicago index in October will most likely also show a steep decline. Forecasts for fourth quarter GDP growth are too high.
Freddie Prinze: "My folks first met on the subway trying to pick each others pockets."
As Leonard Pitts, Jr., syndicated columnist for the Miami Herald, points out, “we are the reason Bush gets away with it.” He writes that, in March 2003, Pat Robertson advised Bush to prepare the nation for the likelihood of casualties in Iraq. Bush replied “we’re not going to have any casualties.” So far, 1,105 U.S. soldiers have been killed in Iraq. In addition, there are over 9,000 casualties. Pitts goes on “we bought a forgery, a fake ‘War on Terror’ for which we paid, and are still paying. Now we are loath to admit what anybody can see…For four years, he and cronies have blithely changed or suppressed government reports- on health, science, the environment- that counter the world view. Just last month, when intelligence agents issued a report whose pessimism was at odds with the party line on Iraq, the president dismissed it by saying these experts were ‘just guessing.’ On Planet Bush, a thing is true because the president believes it t be true and any facts marshaled in opposition are irrelevant. One’s job as the president’s adviser, apparently, is simply to nod vigorously. Ask yourself why we’re keeping that forgery on the wall. At this point, the only people being fooled are those who want to be.”
Mark Twain: "Denial ain't just a river in Egypt."
In a study by NPD Group, 42% of those polled said the price of gasoline will impact holiday spending. About a third of the consumers polled said they would wait for items to go on sale before making purchases.
Venture capital spending in Silicon Valley start-ups in the third quarter was down 24% from the prior quarter, according to an Ernst & Young survey.
For the ninth consecutive day the dollar fell against the euro to $1.28. It was an eight month high for the euro. The dollar dropped to 106.24 yen. It was the first time in six months it had traded below 107 yen. In addition, the dollar traded at four year lows against the Korean won and the Singapore dollar and to an eight year low against the Swiss franc. San Francisco Fed President Janet Yellen stated the dollar was still “relatively high despite our large and growing trade deficit.” There is increasing concern about capital inflows to the U.S.
Gold rallied to a six month high of $429 per ounce and crude remained at all-time high levels.
This week the U.S. Conference Board’s gauge of consumer sentiment in October will most probably show a steep decline. The NAPM-Chicago index in October will most likely also show a steep decline. Forecasts for fourth quarter GDP growth are too high.
Freddie Prinze: "My folks first met on the subway trying to pick each others pockets."
Sunday, October 24, 2004
10/24/04 The Changing Landscape
It was hardly a surprise to read the Washington Post’s endorsement of Kerry for President this morning. In its editorial, the paper stated that “on balance, though, we believe Mr. Kerry, with his promise of resoluteness tempered by wisdom and open-mindedness, has staked a stronger claim on the nation’s trust to lead for the next four years.” Possibly, more importantly, the Des Moines Register came out today in support of Kerry for President. In its endorsement entitled John Kerry, the real thing, the paper stated “now it is time to take the next logical step and recognize John Kerry as someone who could do better. It’s time to see Kerry as the person he is, not as the caricature created in the president’s campaign ads…By nature, he is more of a uniter than Bush…It is the nature of the man to listen and to respect others. He does not tend toward vindictiveness or in-your-face triumphalism. There is a dignity about him…We’re confident in recommending him as a person of common sense and decency- a leader who has what it takes to bring Americans back together.” I urge you all to read the entire endorsement.
Eligible registered voter rolls have increased 21% or by 470,000 more Arizonans for November 2 than could vote in 2000.
Sean P. Diddy is taking his Combs Citizen Change campaign for getting out the vote to the swing states. There are 40 million eligible voters between 18 and 35.
Wisconsin is one of four battleground states allowing same-day voter registration. In 2000, nearly one in six voters registered on election day.
In August, foreigners purchased a net $59 billion of Treasury bonds, stocks, and other securities. It was the smallest amount bought in 10 months.
Federal Reserve Bank President Janet Yellen stated the trade gap poses “significant issues” for the economy. This week the dollar declined 1.7% against the euro and 1.9% versus the yen. Lehman Bros. predicts the dollar will decline to $1.32 to the euro in a year and the dollar to 99 yen in 12 months.
Federal Reserve Governor Susan Bies: “I’m less worried about the tax side. The part that’s got me so upset is in the whole election debate nobody’s been talking about the spending side. If you take out Homeland Security and Defense, it has been a cookie jar in the last four years. Everything has gotten loaded in. Money has gotten loaded into these appropriation bills that are funding everything under the sun. There is absolutely no spending discipline.” She is recommending a return to pay-as-you-go policy requiring new spending to be offset.
Japan’s trade surplus in September declined 21.8% from the prior month.
The kids’ poll has correctly predicted the winner in the last four presidential elections. The latest poll of nearly 400,000 children gave 57% of their votes to Kerry.
For the first time since August 2003, the four-week moving average of U.S. bond purchases by foreign central banks has turned negative.
It is helpful to be open-minded about new ways to understand and assess the movement of prices in financial markets. An alternative look centers on fractal theory and described in a book written by Mandelbrot and Hudson entitled The (Mis)behavior of Markets:A Fractal View of Risk, Ruin, and Reward.
In September, 7,000 jobs were lost in Wisconsin, 14,800 in Michigan, and 9,500 in Florida. Over the last three months jobs were lost in Minnesota, Missouri, Oregon, and Michigan.
Mozilla’s Firefox version 1.0 has been in beta for the past four months. It is a revolutionary new browser. A very famous techie friend put it on my computer. It is a free open-source browser. It has been downloaded almost 3 million times. It has significant advantages over Microsoft’s Internet Explorer. Next month Mozilla hopes to release its non-beta 1.0 version, and they’re “hoping for 10 million downloads in 10 days.” Mozilla spells trouble for Microsoft.
In 1999, sales for Infosys amounted to $121 million. Last year, they surpassed $1 billion. Their CEO stated “after the boom, people no longer invested in technology as an act of faith. They started focusing on reliability, return on investment, and value for money, which is exactly what we deliver.” Nilekani, the CEO, sees their next big opportunity in consulting and services. He observed that “it’s like Wal-Mart getting into groceries or Dell getting into printers. On top of our global; delivery model, we’re adding these new capabilities at the point of customer contact.” Accenture and IBM had better take this competitor seriously. Infosys is hungry and will offer value and excellent customer service.
According to AMR Research, retailers will spend about $400 million worldwide this year on forecasting applications.
A Mercer survey last year found 80% of companies reduced health-care coverage for future retirees, and that 40% make current retirees pay the full cost of health insurance.
Since the start of 2002, the Goldman Sachs Commodities Index is up 100%.
Wally Weitz: “The risk of a short-term surprise or crisis is created by a weak dollar if the holders of some hundreds of billions or trillions of U.S. securities decide the interest rate they’re receiving on those securities is not compensating them enough for the chronic loss of value they would experience because of the dollar weakening.”
On Thursday, the Check Clearing for the 21st Century Act goes into effect. It will enable banks to accept electronic images of checks as proof of payment in place of the actual checks.
George W. Bush : "I've been to war. I've raised twins. If I had a choice, I'd rather go to war."
It was hardly a surprise to read the Washington Post’s endorsement of Kerry for President this morning. In its editorial, the paper stated that “on balance, though, we believe Mr. Kerry, with his promise of resoluteness tempered by wisdom and open-mindedness, has staked a stronger claim on the nation’s trust to lead for the next four years.” Possibly, more importantly, the Des Moines Register came out today in support of Kerry for President. In its endorsement entitled John Kerry, the real thing, the paper stated “now it is time to take the next logical step and recognize John Kerry as someone who could do better. It’s time to see Kerry as the person he is, not as the caricature created in the president’s campaign ads…By nature, he is more of a uniter than Bush…It is the nature of the man to listen and to respect others. He does not tend toward vindictiveness or in-your-face triumphalism. There is a dignity about him…We’re confident in recommending him as a person of common sense and decency- a leader who has what it takes to bring Americans back together.” I urge you all to read the entire endorsement.
Eligible registered voter rolls have increased 21% or by 470,000 more Arizonans for November 2 than could vote in 2000.
Sean P. Diddy is taking his Combs Citizen Change campaign for getting out the vote to the swing states. There are 40 million eligible voters between 18 and 35.
Wisconsin is one of four battleground states allowing same-day voter registration. In 2000, nearly one in six voters registered on election day.
In August, foreigners purchased a net $59 billion of Treasury bonds, stocks, and other securities. It was the smallest amount bought in 10 months.
Federal Reserve Bank President Janet Yellen stated the trade gap poses “significant issues” for the economy. This week the dollar declined 1.7% against the euro and 1.9% versus the yen. Lehman Bros. predicts the dollar will decline to $1.32 to the euro in a year and the dollar to 99 yen in 12 months.
Federal Reserve Governor Susan Bies: “I’m less worried about the tax side. The part that’s got me so upset is in the whole election debate nobody’s been talking about the spending side. If you take out Homeland Security and Defense, it has been a cookie jar in the last four years. Everything has gotten loaded in. Money has gotten loaded into these appropriation bills that are funding everything under the sun. There is absolutely no spending discipline.” She is recommending a return to pay-as-you-go policy requiring new spending to be offset.
Japan’s trade surplus in September declined 21.8% from the prior month.
The kids’ poll has correctly predicted the winner in the last four presidential elections. The latest poll of nearly 400,000 children gave 57% of their votes to Kerry.
For the first time since August 2003, the four-week moving average of U.S. bond purchases by foreign central banks has turned negative.
It is helpful to be open-minded about new ways to understand and assess the movement of prices in financial markets. An alternative look centers on fractal theory and described in a book written by Mandelbrot and Hudson entitled The (Mis)behavior of Markets:A Fractal View of Risk, Ruin, and Reward.
In September, 7,000 jobs were lost in Wisconsin, 14,800 in Michigan, and 9,500 in Florida. Over the last three months jobs were lost in Minnesota, Missouri, Oregon, and Michigan.
Mozilla’s Firefox version 1.0 has been in beta for the past four months. It is a revolutionary new browser. A very famous techie friend put it on my computer. It is a free open-source browser. It has been downloaded almost 3 million times. It has significant advantages over Microsoft’s Internet Explorer. Next month Mozilla hopes to release its non-beta 1.0 version, and they’re “hoping for 10 million downloads in 10 days.” Mozilla spells trouble for Microsoft.
In 1999, sales for Infosys amounted to $121 million. Last year, they surpassed $1 billion. Their CEO stated “after the boom, people no longer invested in technology as an act of faith. They started focusing on reliability, return on investment, and value for money, which is exactly what we deliver.” Nilekani, the CEO, sees their next big opportunity in consulting and services. He observed that “it’s like Wal-Mart getting into groceries or Dell getting into printers. On top of our global; delivery model, we’re adding these new capabilities at the point of customer contact.” Accenture and IBM had better take this competitor seriously. Infosys is hungry and will offer value and excellent customer service.
According to AMR Research, retailers will spend about $400 million worldwide this year on forecasting applications.
A Mercer survey last year found 80% of companies reduced health-care coverage for future retirees, and that 40% make current retirees pay the full cost of health insurance.
Since the start of 2002, the Goldman Sachs Commodities Index is up 100%.
Wally Weitz: “The risk of a short-term surprise or crisis is created by a weak dollar if the holders of some hundreds of billions or trillions of U.S. securities decide the interest rate they’re receiving on those securities is not compensating them enough for the chronic loss of value they would experience because of the dollar weakening.”
On Thursday, the Check Clearing for the 21st Century Act goes into effect. It will enable banks to accept electronic images of checks as proof of payment in place of the actual checks.
George W. Bush : "I've been to war. I've raised twins. If I had a choice, I'd rather go to war."
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