8/27/04 The Message Is Clear
If, as Bush maintains, we have turned the corner, then we have been greeted by increased poverty and decreased opportunity. This is failed leadership. It is not surprising that, according to the Community Service Society of N.Y. third annual survey, a third of voting age citizens in N.Y.C. live below twice the poverty level. The survey shows the main concerns, by a wide margin, are jobs and the economy.
Nine out of ten say their family finances have not improved over last year and 36% say they are even worse off.
For the first time in over a decade the number of poor in the U.S. increased for three years in a row. For the second year in a row the average income did not rise. Since Bush took office, the number of Americans without health insurance has increased by 5 million.
Since invading Iraq, 969 U.S. troops have died and 6,690 service members have been injured.
In a WSJ/NBC poll, 52% disapprove of Bush's handling of the economy and 51% state he needs to change his approach on Iraq.
General Eberhart, head of NORTHCOM and NORAD, stated "I believe it's just a matter of time until the terrorists try to use a ....maritime attack against us." He sees North Korea as posing the greatest threat to the U.S.
Next month Interstate Bakeries will close its Monroe, LA plant and 50 people will lose their jobs. In October, the company will close its Buffalo,N.Y. plant and there will be a loss of 200 jobs. Cirrus Logic is laying off 7% of its workforce. In Kingston, NC Unifi is buying a textile plant from Koch Industries. The new owner told hundreds of workers they must take a 20% pay cut if they want to keep their jobs. Novellus Systems sees some shipment delays due to some customer cautiousness.
Today, Greenspan will give a speech and tell the world everything is coming up roses. The U.S. second quarter GDP growth was revised downwward from 3% to 2.8%. Ex food and energy, the Consumer Price Consumption Expenditure Index rose at a 1.7% annual rate. In the meantime, in the latest report, consumer spending is slowing in Japan and their unemployment rate is rising.
The 10 year Treasury notes continue to hold its gains. With a yield of 4.21%, the market is telling us that GDP growth is going nowhere fast. That will continue to limit gains for equities. Those fighting that picture have faired poorly and will again do so in coming months.
Thursday, August 26, 2004
8/26/04 Follow The Facts
U.S. new home sales declined 6.4% in July.
The latest weekly jobless claims rose by 10,000 to 343,000. The number of people collecting state unemployment checks rose by 5,000 to 2.897 million in the week ending August 14.
The good news yesterday was that crude closed down to $43.47 per barrel. One should remember that, in 1979, a gallon of gas cost $3.78 in 2004 dollars. On a relative basis, gas is a good value at $2 per gallon. Unless China's thirst for oil lessens, pressure will remain on the world's oil supply.
Including state and federal subsidies, it costs $2.24 to produce a gallon of ethanol compared with 63 cents for gasoline.
Analysts just don't get it. Boeing rose to a new yearly high based on a $4 billion order for 18 777s from Singapore Airlines. The market ignored the bigger news. The airline decided against placing an order for the 7E7. Why? The economics for the new plane were not sufficiently compelling. Boeing was banking on Singapore Airlines to provide the second biggest order for the 7E7 behind the All Nippon deal for 50 planes. The 7E7 is Boeing's future.
LaCrosse Footwear is laying off 70 workers and closing its Claremont, NH plant.
Square D is closing its Oxford, Ohio plant and laying off 242 hourly and salaried employees.
Harry Truman: "I want a one-armed economist so that the guy could never make a statement and then say 'on the other hand.'"
GM has asked the supplier of the Hummer H2 to cut production because sales have slowed.
The IMF raised the forecast for GDP growth for China in 2004 from 8.5% to 9% and stated it is not certain that China can achieve a soft landing.
Bob Beckham: "I put the Financial Times on the floor and called my dog William over to pee on it. Wherever there was a mark I could do some trading."
India's gold imports, accroding to commerce industry data, rose 30.7% in the April-June quarter this year compared with the prior year's period.
Kerry won the endorsement of 10 Nobel Prize-winning economists.
There are 78 ethanol plants in 19 states. Approximately 10% of all the corn grown in the U.S. goes into ethanol while 70% is fed to cattle. ADM controls 60% of the ethanol market. According to the Cato Institute, every dollar in profits earned by ADM from ethanol costs taxpayers $30. Since 1980, ADM has received over $10 billion in subsidies. Ethanol is protected by a 54 cent per gallon foreign trade tariff. It should be noted that, of all the major crops, corn creates the most soil erosion and demands huge amounts of herbicides, insecticides, and chemical fertilizers. According to studies at Cornell University, without factoring in costs to ship ethanol to blending sites, it costs 29% more energy to produce ethanol than you get from burning it. Ethanol causes air pollution by releasing significant amounts of hydrocarbons and nitrogen oxides.
U.S. new home sales declined 6.4% in July.
The latest weekly jobless claims rose by 10,000 to 343,000. The number of people collecting state unemployment checks rose by 5,000 to 2.897 million in the week ending August 14.
The good news yesterday was that crude closed down to $43.47 per barrel. One should remember that, in 1979, a gallon of gas cost $3.78 in 2004 dollars. On a relative basis, gas is a good value at $2 per gallon. Unless China's thirst for oil lessens, pressure will remain on the world's oil supply.
Including state and federal subsidies, it costs $2.24 to produce a gallon of ethanol compared with 63 cents for gasoline.
Analysts just don't get it. Boeing rose to a new yearly high based on a $4 billion order for 18 777s from Singapore Airlines. The market ignored the bigger news. The airline decided against placing an order for the 7E7. Why? The economics for the new plane were not sufficiently compelling. Boeing was banking on Singapore Airlines to provide the second biggest order for the 7E7 behind the All Nippon deal for 50 planes. The 7E7 is Boeing's future.
LaCrosse Footwear is laying off 70 workers and closing its Claremont, NH plant.
Square D is closing its Oxford, Ohio plant and laying off 242 hourly and salaried employees.
Harry Truman: "I want a one-armed economist so that the guy could never make a statement and then say 'on the other hand.'"
GM has asked the supplier of the Hummer H2 to cut production because sales have slowed.
The IMF raised the forecast for GDP growth for China in 2004 from 8.5% to 9% and stated it is not certain that China can achieve a soft landing.
Bob Beckham: "I put the Financial Times on the floor and called my dog William over to pee on it. Wherever there was a mark I could do some trading."
India's gold imports, accroding to commerce industry data, rose 30.7% in the April-June quarter this year compared with the prior year's period.
Kerry won the endorsement of 10 Nobel Prize-winning economists.
There are 78 ethanol plants in 19 states. Approximately 10% of all the corn grown in the U.S. goes into ethanol while 70% is fed to cattle. ADM controls 60% of the ethanol market. According to the Cato Institute, every dollar in profits earned by ADM from ethanol costs taxpayers $30. Since 1980, ADM has received over $10 billion in subsidies. Ethanol is protected by a 54 cent per gallon foreign trade tariff. It should be noted that, of all the major crops, corn creates the most soil erosion and demands huge amounts of herbicides, insecticides, and chemical fertilizers. According to studies at Cornell University, without factoring in costs to ship ethanol to blending sites, it costs 29% more energy to produce ethanol than you get from burning it. Ethanol causes air pollution by releasing significant amounts of hydrocarbons and nitrogen oxides.
Wednesday, August 25, 2004
8/25/04 Capital Equipment Purchases Are On Borrowed Time
There are only four months remaining for large companies to write off 50% of qualified capital equipment orders. After Dec. 31, the tax incentive ends. You have witnessed what happens to consumer spending after the child tax credit impact ended. The same will take place with business equipment purchases. In the meantime, orders for core capital goods increased 0.6% in July after gaining 1.4% in June. Computers, autos, and defense goods declined while transportation goods, such as, aircraft gained 5.6%. Bookings for commercial aircraft increased 100%. A year ago, Boeing's orders for commercial aircraft were at a standstill.
The California Association of Realtors stated the median price of an existing home in California in July increased 21.4% compared to the same period one year ago. Greenspan stated more data was needed to declare a housing bubble. Obviously, he and his wife are not out house hunting.
Mortgage applications volume was down 6.3% last week. The National Association of Realtors stated sales of previously owned homes declined 2.9% in July from June's record-high pace.
U.S. bombs damaged part of the walls in the Ali Shrine complex. George Will predicted the Baath's planning of a big October offensive, possibly in the al-Anbar Province.
Due to a very early spring and warm summer, Stony Hill Winery in the Napa Valley started its crush on August 11, the earliest in their 52-year history.
Toyota's main Chinese partner posted a decline of 79% in second quarter profit due to sliding car prices and higher raw material costs.
According to the National Women's Business Council, 15.6 million women owned or co-owned businesses in 2002.
Speaking of the new overtime rules, Sen. Tom Harkin stated "plain and simple, this is a rip-off of the American worker."
Mark Zandi, chief economist for Economy.com, stated "in this environment, when the numbers don't come in as strong as expected, businesses pull back."
Mark Twain: "In the beginning of a change, the Patriot is a scarce man- brave, hated, and scorned. When his cause succeeds however, the timid join him. For then, it costs nothing to be a Patriot."
There are only four months remaining for large companies to write off 50% of qualified capital equipment orders. After Dec. 31, the tax incentive ends. You have witnessed what happens to consumer spending after the child tax credit impact ended. The same will take place with business equipment purchases. In the meantime, orders for core capital goods increased 0.6% in July after gaining 1.4% in June. Computers, autos, and defense goods declined while transportation goods, such as, aircraft gained 5.6%. Bookings for commercial aircraft increased 100%. A year ago, Boeing's orders for commercial aircraft were at a standstill.
The California Association of Realtors stated the median price of an existing home in California in July increased 21.4% compared to the same period one year ago. Greenspan stated more data was needed to declare a housing bubble. Obviously, he and his wife are not out house hunting.
Mortgage applications volume was down 6.3% last week. The National Association of Realtors stated sales of previously owned homes declined 2.9% in July from June's record-high pace.
U.S. bombs damaged part of the walls in the Ali Shrine complex. George Will predicted the Baath's planning of a big October offensive, possibly in the al-Anbar Province.
Due to a very early spring and warm summer, Stony Hill Winery in the Napa Valley started its crush on August 11, the earliest in their 52-year history.
Toyota's main Chinese partner posted a decline of 79% in second quarter profit due to sliding car prices and higher raw material costs.
According to the National Women's Business Council, 15.6 million women owned or co-owned businesses in 2002.
Speaking of the new overtime rules, Sen. Tom Harkin stated "plain and simple, this is a rip-off of the American worker."
Mark Zandi, chief economist for Economy.com, stated "in this environment, when the numbers don't come in as strong as expected, businesses pull back."
Mark Twain: "In the beginning of a change, the Patriot is a scarce man- brave, hated, and scorned. When his cause succeeds however, the timid join him. For then, it costs nothing to be a Patriot."
Tuesday, August 24, 2004
8/24/04 Signs Of Diminished Inflation
Sanderson Farms reported that the price for boneless chicken breast during the quarter peaked at $2.56 a poundbut has since dropped significantly to $1.75 per pound. Meanwhile, oil declined to below $46 per barrel.
First Energy to cut 205 employees at their Ohio plant. Interstate Bakeries to close its Long Island, N.Y. bakery and cut 200 workers.
According to the BLS, the number of American workers in furniture and related products dropped 14% from 674,900 in January 2000 to 581,700 in July 2004.
The BLS is doing yet another study on the 9.5 million self-employed Americans. At first glance, it appears, that as a generalization, income for the self-employed has been on a yearly decline and that has been accompanied by reduced annual workloads.
Target sees August sales in range from flat to plus 2%. That mirrors what Wal-Mart stated.
Tom Nardoni of the Labor Dept's Division of Labor Statistics stated "I can't tell you. We just don't know why there's a difference between the surveys (payroll and household)."
Sanderson Farms reported that the price for boneless chicken breast during the quarter peaked at $2.56 a poundbut has since dropped significantly to $1.75 per pound. Meanwhile, oil declined to below $46 per barrel.
First Energy to cut 205 employees at their Ohio plant. Interstate Bakeries to close its Long Island, N.Y. bakery and cut 200 workers.
According to the BLS, the number of American workers in furniture and related products dropped 14% from 674,900 in January 2000 to 581,700 in July 2004.
The BLS is doing yet another study on the 9.5 million self-employed Americans. At first glance, it appears, that as a generalization, income for the self-employed has been on a yearly decline and that has been accompanied by reduced annual workloads.
Target sees August sales in range from flat to plus 2%. That mirrors what Wal-Mart stated.
Tom Nardoni of the Labor Dept's Division of Labor Statistics stated "I can't tell you. We just don't know why there's a difference between the surveys (payroll and household)."
Monday, August 23, 2004
8/23/04 The Paycheck-To-Paycheck Consumer And Investor Optimism
Slightly less than a months ago, Wal-Mart expressed confidence that their August comp sales would rise by 2 to 4%. That forecast was made knowing that the prior August comp sales were up 6.9%, that there would be less discounted merchandise to sell, that the Labor Day weekend fell one week later, and that there would not be child-credit checks available. Today, the company reduced the forecast to a range from no change to plus 2%. The reason provided was Hurricane Charley which forced the closure of 75 stores and impacted a total of 200 stores. Importantly, Wal-Mart stated that back-to-school sales were tracking below plan. This is highly significant. Operations at Wal-Mart's 3,600 U.S. locations tell you more about consumer spending than any other information available. It is a mirror of Main Street spending. In addition, other than the pre-Christmas holiday season, this back-to-school period is the most important contributor to a retailer's annual sales. In sum, the consumer is cutting back again in August. The Fed may miss this point, the Administration may gloss over it, but an investor had better take notice. If you do not adjust your portfolio accordingly, there will be non-pleasantries eating away at your positions.
According to the UBS Index of Investor Optimism, less confidence was expressed by investors in August about the economy and their personal investments. The overall Index declined 11 points to 77 from July's 88. Only 43% expressed optimism on unemployment, down 6% points from July, and now 46% are optimistic about the stock market, down 3% points from July and 4% points from one year ago.
Slightly less than a months ago, Wal-Mart expressed confidence that their August comp sales would rise by 2 to 4%. That forecast was made knowing that the prior August comp sales were up 6.9%, that there would be less discounted merchandise to sell, that the Labor Day weekend fell one week later, and that there would not be child-credit checks available. Today, the company reduced the forecast to a range from no change to plus 2%. The reason provided was Hurricane Charley which forced the closure of 75 stores and impacted a total of 200 stores. Importantly, Wal-Mart stated that back-to-school sales were tracking below plan. This is highly significant. Operations at Wal-Mart's 3,600 U.S. locations tell you more about consumer spending than any other information available. It is a mirror of Main Street spending. In addition, other than the pre-Christmas holiday season, this back-to-school period is the most important contributor to a retailer's annual sales. In sum, the consumer is cutting back again in August. The Fed may miss this point, the Administration may gloss over it, but an investor had better take notice. If you do not adjust your portfolio accordingly, there will be non-pleasantries eating away at your positions.
According to the UBS Index of Investor Optimism, less confidence was expressed by investors in August about the economy and their personal investments. The overall Index declined 11 points to 77 from July's 88. Only 43% expressed optimism on unemployment, down 6% points from July, and now 46% are optimistic about the stock market, down 3% points from July and 4% points from one year ago.
Sunday, August 22, 2004
8/22/04 Screams From The Graveyard
On Friday, market participants turned to the media for their news. They relied on headlines to trade oil, stocks, and bonds. They will never learn, and their P&L will rightly suffer the consequences. Either do your own work or expect to be carried out on a stretcher. The news about the mosque turnover was wrong. It wasn't even the main event. No major news bureau has carried the story about the graveyard. The Administration made a very serious error in judgment in their repeated bombing of Najaf's sacred cementary. Many Iranian loved ones are buried there. This is the story that holds significant after shocks. As for the mosque, Al-Jazeerah stated that a Muqtada spokesperson related that, even after the handover, their army of fighters would continue to guard the shrine. It's too late for guarding the graveyard. We will hear the screams.
Southwest of Basra guerillas bombed and set fire to an oil pipeline, one that had been shut down as a precautionary measure. In the meantime, the Snowman stated "the energy experts that I've talked to all indicate current prices are abnormally high, something of a bubble, and they ought to reced as the uncertainties get clarified." I figure his "experts" are short oil and are getting clocked. When you rely on the Snowman's info for wealth creation, things have truly deteriorated. He couldn't even run a railroad.
Lehman Bros. reduced its forecast for U.S. GDP in 2005 from 3.7% to 3.3% due to the slowing of consumer spending and job creation.
John Edwards on the new overtime rules: "Why would anyone want to take overtime pay away from as many as 6 million Americans at a time when they need it the most? And why would anyone support the new rule which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year? If you work hard, then you should be rewarded with that effort." The answer, John, to your questions is simple. Bush's base is fighting wealth distribution, and the Administration has tried to sell the American people on the notion that the tax cuts have promoted wealth creation. You can't create wealth with lower paying jobs and wages and benefits trailing a muted inflation rate for almost four years.
On Friday, market participants turned to the media for their news. They relied on headlines to trade oil, stocks, and bonds. They will never learn, and their P&L will rightly suffer the consequences. Either do your own work or expect to be carried out on a stretcher. The news about the mosque turnover was wrong. It wasn't even the main event. No major news bureau has carried the story about the graveyard. The Administration made a very serious error in judgment in their repeated bombing of Najaf's sacred cementary. Many Iranian loved ones are buried there. This is the story that holds significant after shocks. As for the mosque, Al-Jazeerah stated that a Muqtada spokesperson related that, even after the handover, their army of fighters would continue to guard the shrine. It's too late for guarding the graveyard. We will hear the screams.
Southwest of Basra guerillas bombed and set fire to an oil pipeline, one that had been shut down as a precautionary measure. In the meantime, the Snowman stated "the energy experts that I've talked to all indicate current prices are abnormally high, something of a bubble, and they ought to reced as the uncertainties get clarified." I figure his "experts" are short oil and are getting clocked. When you rely on the Snowman's info for wealth creation, things have truly deteriorated. He couldn't even run a railroad.
Lehman Bros. reduced its forecast for U.S. GDP in 2005 from 3.7% to 3.3% due to the slowing of consumer spending and job creation.
John Edwards on the new overtime rules: "Why would anyone want to take overtime pay away from as many as 6 million Americans at a time when they need it the most? And why would anyone support the new rule which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year? If you work hard, then you should be rewarded with that effort." The answer, John, to your questions is simple. Bush's base is fighting wealth distribution, and the Administration has tried to sell the American people on the notion that the tax cuts have promoted wealth creation. You can't create wealth with lower paying jobs and wages and benefits trailing a muted inflation rate for almost four years.
Saturday, August 21, 2004
8/21/04 Compassionate Conservatism At Work
About 115 million workers are covered by overtime rules in the 1938 Fair Labor Standards Act. Starting Monday, new overtime rules go into effect. They have been brought to 115 working Americans by Bush and the Republican-controlled Congress. Elaine Chao told Congress the new rules would help stop "needless litigation" because it is designed to clarift who's entitled to overtime. Deputy Labor Secretary Law stated the new rules will "provide a stronger and clearer overtime guarantee for more working Americans." This is such a load of shit. In drafting the language, significant changes were made. The draft had said 1.5 million to 2.7 million workers "will be more readily identified as exempt." The final language stated "it is impossible to quantitatively estimate the number of exempt workers."It is impossible to give an exact number but it had been agreed that a range was realistic. These politicians are dangerous. They are taking away your personal freedoms and now your right to receiving compensation for working more than 40 hours a week. If you vote them in for another four years, you are one huge jerk.
Nancy Pelosi: "These new regulations represent the largest middle-class pay cut in history-- starting Monday, more than 6 million workers will lose their right to overtime pay. President Bush and the Republicans simply do not understand that middle-class families need their overtime pay to put food on the table, to make ends meet, to buy a home, and to send their children to college."
According to the BLS, compared with June, July's unemployment rates were lower in 22 states, higher in 18 states and DC, and unchanged in 10 states.
Alaska Air cut up to 150 mangement jobs. Federal Mogul and Southern Mills will close two plants in west Georgia, laying off 340 workers. Moore Wallace is closing its Manchester, VT plant and 97 employees are losing their jobs. Microsoft is cutting production of their Xbox games, closing its video-game studio in Redmond, and laying off 76 employees.
It should come as no surprise that some big automotive retailers and car dealerships are reducing their orders for GM's 2005 models. GM already acknowledged they were cutting production in this third quarter by 5%. With about 1 million unsold vehicles in inventory, where should the dealers put the 2005 models?
Iranian Defense Minister Ali Shamkhani: "We will not sit to wait for what others will do to us. Some military commanders in Iran are convinced that preventive operations which the Americans talk about are not their monoploy...The U.S. military presence will not become an element of strength at our expense. The opposite is true because their forces would turn into a hostage."
Oil demand growth this year is running at a 24-year high. According to new customs data, China's oil imports are up 40% from July 2003 to July 2004. India expects its crude oil imports to rise 11% in 2004-2005. OPEC is pumping oil at its highest level since 1979.
About 115 million workers are covered by overtime rules in the 1938 Fair Labor Standards Act. Starting Monday, new overtime rules go into effect. They have been brought to 115 working Americans by Bush and the Republican-controlled Congress. Elaine Chao told Congress the new rules would help stop "needless litigation" because it is designed to clarift who's entitled to overtime. Deputy Labor Secretary Law stated the new rules will "provide a stronger and clearer overtime guarantee for more working Americans." This is such a load of shit. In drafting the language, significant changes were made. The draft had said 1.5 million to 2.7 million workers "will be more readily identified as exempt." The final language stated "it is impossible to quantitatively estimate the number of exempt workers."It is impossible to give an exact number but it had been agreed that a range was realistic. These politicians are dangerous. They are taking away your personal freedoms and now your right to receiving compensation for working more than 40 hours a week. If you vote them in for another four years, you are one huge jerk.
Nancy Pelosi: "These new regulations represent the largest middle-class pay cut in history-- starting Monday, more than 6 million workers will lose their right to overtime pay. President Bush and the Republicans simply do not understand that middle-class families need their overtime pay to put food on the table, to make ends meet, to buy a home, and to send their children to college."
According to the BLS, compared with June, July's unemployment rates were lower in 22 states, higher in 18 states and DC, and unchanged in 10 states.
Alaska Air cut up to 150 mangement jobs. Federal Mogul and Southern Mills will close two plants in west Georgia, laying off 340 workers. Moore Wallace is closing its Manchester, VT plant and 97 employees are losing their jobs. Microsoft is cutting production of their Xbox games, closing its video-game studio in Redmond, and laying off 76 employees.
It should come as no surprise that some big automotive retailers and car dealerships are reducing their orders for GM's 2005 models. GM already acknowledged they were cutting production in this third quarter by 5%. With about 1 million unsold vehicles in inventory, where should the dealers put the 2005 models?
Iranian Defense Minister Ali Shamkhani: "We will not sit to wait for what others will do to us. Some military commanders in Iran are convinced that preventive operations which the Americans talk about are not their monoploy...The U.S. military presence will not become an element of strength at our expense. The opposite is true because their forces would turn into a hostage."
Oil demand growth this year is running at a 24-year high. According to new customs data, China's oil imports are up 40% from July 2003 to July 2004. India expects its crude oil imports to rise 11% in 2004-2005. OPEC is pumping oil at its highest level since 1979.
Thursday, August 19, 2004
8/20/04 This Is Not A Soft Patch
The Conference Board reported that the Composite Index of Leading Economic Indicators declined 0.3% in July, the largest drop since February 2003. This followed a 0.1% drop in June. Conference Board economist Ken Goldstein stated "the latest decline in the Leading Index reflects a loss of forward momentum. There are growing concerns about the high cost of gasoline and milk, as well as worries about where economic growth will come from now that tax refunds have been spent and short-term interest rates are rising. Hurricane Charley and renewed concerns about further terrorist attacks may be exogenous but add to overall anxieties." The weakness in the last two months was widespread, stated the Conference Board, and this weakness slowed the growth rate of the leading index into the annual rate range of 1 to 2%. It should be noted that the average annual growth rate of the leading index since 1959 has been about 1.5%. The Conference Board stated that "the slower growth of the leading index so far this year is consistent with a moderate rate of real GDP growth in the near term." In sum, this is not a soft patch but rather is consistent with economic conditions since 1959. If you are expecting more, especially with crude selling near $49 a barrel, then you need to seek professional help.
If Bush thinks he will win Michigan, he needs a reality check. The state lost 16,000 factory jobs in July, and the manufacturing sector jobs dropped to 686,000, the smallest number since the state’s current method of counting them in 1990 and the first time they have dropped below 700,000 since 1990.
Output at U.S. Mid-Atlantic factories slowed in August. The Philadelphia Federal Reserve stated its regional manufacturing index fell to 28.5 in August from 36.1 in July. A gauge of orders for new goods slumped to 19.2 from 35.3 in July. The survey’s employment component also declined.
The number of people who remained on the jobless rolls after collecting an initial week of benefits rose 16,000 to 2.90 million in the week ended August 7. These figures do not include any impact from Hurricane Charley.
Hooker Furniture, a furniture manufacturer and importer, will close its Maiden, NC plant and put 240 employees out of work. After this closure, the company will operate three remaining wood furniture plants.
The Conference Board reported that the Composite Index of Leading Economic Indicators declined 0.3% in July, the largest drop since February 2003. This followed a 0.1% drop in June. Conference Board economist Ken Goldstein stated "the latest decline in the Leading Index reflects a loss of forward momentum. There are growing concerns about the high cost of gasoline and milk, as well as worries about where economic growth will come from now that tax refunds have been spent and short-term interest rates are rising. Hurricane Charley and renewed concerns about further terrorist attacks may be exogenous but add to overall anxieties." The weakness in the last two months was widespread, stated the Conference Board, and this weakness slowed the growth rate of the leading index into the annual rate range of 1 to 2%. It should be noted that the average annual growth rate of the leading index since 1959 has been about 1.5%. The Conference Board stated that "the slower growth of the leading index so far this year is consistent with a moderate rate of real GDP growth in the near term." In sum, this is not a soft patch but rather is consistent with economic conditions since 1959. If you are expecting more, especially with crude selling near $49 a barrel, then you need to seek professional help.
If Bush thinks he will win Michigan, he needs a reality check. The state lost 16,000 factory jobs in July, and the manufacturing sector jobs dropped to 686,000, the smallest number since the state’s current method of counting them in 1990 and the first time they have dropped below 700,000 since 1990.
Output at U.S. Mid-Atlantic factories slowed in August. The Philadelphia Federal Reserve stated its regional manufacturing index fell to 28.5 in August from 36.1 in July. A gauge of orders for new goods slumped to 19.2 from 35.3 in July. The survey’s employment component also declined.
The number of people who remained on the jobless rolls after collecting an initial week of benefits rose 16,000 to 2.90 million in the week ended August 7. These figures do not include any impact from Hurricane Charley.
Hooker Furniture, a furniture manufacturer and importer, will close its Maiden, NC plant and put 240 employees out of work. After this closure, the company will operate three remaining wood furniture plants.
8/19/04 Uncertainty And Caution
September crude traded at $47.54. As U.S. stockpiles have fallen, U.S. oil demand has risen 3.4% this year. In April, Iraq exported 1.8 million barrels a day. Iraq’s OPEC governor stated "we are exporting right now about a million barrels a day." U.S. Energy Administration inventory data for the week that ended Friday estimated commercial crude stocks had fallen 1.3 million barrels to 293 million, the third week in a row that inventories have declined. ChevronTexaco CEO Reilly stated "this may not be a short term aberration. I believe energy prices are going to face continued pressure- reflecting fundamental changes in demand, supply, and geopolitics. We are, in fact, witnessing a change in the basic energy equation."
German Chancellor Schroeder stated "we don’t currently see any negative impact from the oil price, and we still have very robust global growth." Germany’s unemployment rate exceeds 10%. U.K. July retail sales were down 0.4%. When was the last time Schroeder got out of his limousine and filled its tank with gas? Talk is cheap. Gas is not.
U.S. Air’s Chairman Bonner stated, that without $800 million in new wage and benefit cuts by Sept. 30, the airline could face liquidation.
Yesterday, heating oil futures rose 0.31 cents to $1.225 per gallon.
Knight Ridder said yesterday that its total ad revenue were up 1.4% from last year. CEO Tony Ridder called the revenue increase "soft" with weakness in national ads.
Ciena Corp. stated "short term, we expect revenue for our fourth quarter will be roughly flat with out fiscal third quarter revenue, reflecting ongoing customer uncertainty and caution."
An Iowa Beef plant in Tama, Iowa will close tomorrow, laying off 540 employees. Hahn Elastomer, which supplies plastics to auto and appliance makers, is closing its Plymouth headquarters and two plants in southeast Michigan, putting 273 people out of work. The company could not provide the required 60-day layoff notice because it was not able to obtain the necessary capital to remain open. Nortel to cut 3,500 jobs.
Google cut the size of its IPO sharply and reduced the price to $85. Still the company raised over $1 billion in new capital.
Speaking yesterday in Minnesota, Bush remarked "even though we did not find the stockpiles that we expected to find, I want you to remember that Saddam Hussein had the capability of making weapons, and he could have passed that capability on to our enemies. And that was a risk we could not afford to take after September the 11th." You will notice that he didn’t mention what type of weapons Hussein had the capability to make. The statement was cleverly worded. Hussein was capable of making foreign bank deposits. That’s what we know. We also know Bush has hit a "soft patch" two and one half months before the election. That’s what happens when your mission is not accomplished.
September crude traded at $47.54. As U.S. stockpiles have fallen, U.S. oil demand has risen 3.4% this year. In April, Iraq exported 1.8 million barrels a day. Iraq’s OPEC governor stated "we are exporting right now about a million barrels a day." U.S. Energy Administration inventory data for the week that ended Friday estimated commercial crude stocks had fallen 1.3 million barrels to 293 million, the third week in a row that inventories have declined. ChevronTexaco CEO Reilly stated "this may not be a short term aberration. I believe energy prices are going to face continued pressure- reflecting fundamental changes in demand, supply, and geopolitics. We are, in fact, witnessing a change in the basic energy equation."
German Chancellor Schroeder stated "we don’t currently see any negative impact from the oil price, and we still have very robust global growth." Germany’s unemployment rate exceeds 10%. U.K. July retail sales were down 0.4%. When was the last time Schroeder got out of his limousine and filled its tank with gas? Talk is cheap. Gas is not.
U.S. Air’s Chairman Bonner stated, that without $800 million in new wage and benefit cuts by Sept. 30, the airline could face liquidation.
Yesterday, heating oil futures rose 0.31 cents to $1.225 per gallon.
Knight Ridder said yesterday that its total ad revenue were up 1.4% from last year. CEO Tony Ridder called the revenue increase "soft" with weakness in national ads.
Ciena Corp. stated "short term, we expect revenue for our fourth quarter will be roughly flat with out fiscal third quarter revenue, reflecting ongoing customer uncertainty and caution."
An Iowa Beef plant in Tama, Iowa will close tomorrow, laying off 540 employees. Hahn Elastomer, which supplies plastics to auto and appliance makers, is closing its Plymouth headquarters and two plants in southeast Michigan, putting 273 people out of work. The company could not provide the required 60-day layoff notice because it was not able to obtain the necessary capital to remain open. Nortel to cut 3,500 jobs.
Google cut the size of its IPO sharply and reduced the price to $85. Still the company raised over $1 billion in new capital.
Speaking yesterday in Minnesota, Bush remarked "even though we did not find the stockpiles that we expected to find, I want you to remember that Saddam Hussein had the capability of making weapons, and he could have passed that capability on to our enemies. And that was a risk we could not afford to take after September the 11th." You will notice that he didn’t mention what type of weapons Hussein had the capability to make. The statement was cleverly worded. Hussein was capable of making foreign bank deposits. That’s what we know. We also know Bush has hit a "soft patch" two and one half months before the election. That’s what happens when your mission is not accomplished.
Wednesday, August 18, 2004
8/18/04 Searching
Google reduced the range on its IPO pricing from $108 to $135 to $85 to $95, Selling shareholders are reducing the amount of shares to be offered.
In the plant closing category, Alcoa is closing an automotive components plant in Northwood, just outside of Toledo, Ohio. About 140 people will lose their jobs. Libbey will close an LA plant and also eliminate 140 jobs. Time Warner Cable will consolidate its News 14 Carolina support operations and administration in Raleigh and cut between 40 and 50 workers. Bank of America to layoff 1,500 at FleetBoston branches.
N.Y. crude futures traded at $47 this morning, another new high. Getting less headlines is the price for this winter’s heating oil. The Energy Information Agency estimates it will cost consumers an extra $100 to keep their homes warm this winter using heating oil and an extra $179 using natural gas. That estimate is based on crude dropping down to $38 a barrel. Mark Zandi of Economy.com stated "higher energy prices are the key threat to the contiued strength of the economy. There is a risk if prices move higher and stay there that it would begin to undermine productivity growth and the economy’s long-term potential, as happened in the 1970s and 1980s." Al Qaida doesn’t need to attempt another attack on our soil. They simply have to create dislocations in energy supplies and keep prices escalated. We’re a consumer-based economy. Main Street doesn’t have the extra cash flow to offset higher energy prices. Consumption will be reduced, and that includes holiday shopping.
The International Energy Agency stated that rising crude demand has left OPEC countries with "effective" spare oil-production capacity of 500,000 barrels a day. The U.S. will eat up that spare capacity by simply filling the Strategic Oil Reserve to the brim. Bush will make certain it happens. He wants to keep his "base" happy. In addition, when figuring world daily production, it might be wise to count Venezuela’s at 2.5 million barrels per day rather than the reported 3.1 million barrels a day.
U.S. consumer prices fell 0.1% in July, the first time in 8 months. The core rate rose 0.1%. Through the first seven months of 2004, core prices have risen at a 2.4% rate, up from 1.3% a year earlier. Given the significant rise in crude, heating oil, milk, beef, and lumber, the rise in the overall CPI has been modest. As such, the treasury market viewed the news as quite favorable and the yield on the 10 year Treasury bonds dropped to 4.20%.
Google reduced the range on its IPO pricing from $108 to $135 to $85 to $95, Selling shareholders are reducing the amount of shares to be offered.
In the plant closing category, Alcoa is closing an automotive components plant in Northwood, just outside of Toledo, Ohio. About 140 people will lose their jobs. Libbey will close an LA plant and also eliminate 140 jobs. Time Warner Cable will consolidate its News 14 Carolina support operations and administration in Raleigh and cut between 40 and 50 workers. Bank of America to layoff 1,500 at FleetBoston branches.
N.Y. crude futures traded at $47 this morning, another new high. Getting less headlines is the price for this winter’s heating oil. The Energy Information Agency estimates it will cost consumers an extra $100 to keep their homes warm this winter using heating oil and an extra $179 using natural gas. That estimate is based on crude dropping down to $38 a barrel. Mark Zandi of Economy.com stated "higher energy prices are the key threat to the contiued strength of the economy. There is a risk if prices move higher and stay there that it would begin to undermine productivity growth and the economy’s long-term potential, as happened in the 1970s and 1980s." Al Qaida doesn’t need to attempt another attack on our soil. They simply have to create dislocations in energy supplies and keep prices escalated. We’re a consumer-based economy. Main Street doesn’t have the extra cash flow to offset higher energy prices. Consumption will be reduced, and that includes holiday shopping.
The International Energy Agency stated that rising crude demand has left OPEC countries with "effective" spare oil-production capacity of 500,000 barrels a day. The U.S. will eat up that spare capacity by simply filling the Strategic Oil Reserve to the brim. Bush will make certain it happens. He wants to keep his "base" happy. In addition, when figuring world daily production, it might be wise to count Venezuela’s at 2.5 million barrels per day rather than the reported 3.1 million barrels a day.
U.S. consumer prices fell 0.1% in July, the first time in 8 months. The core rate rose 0.1%. Through the first seven months of 2004, core prices have risen at a 2.4% rate, up from 1.3% a year earlier. Given the significant rise in crude, heating oil, milk, beef, and lumber, the rise in the overall CPI has been modest. As such, the treasury market viewed the news as quite favorable and the yield on the 10 year Treasury bonds dropped to 4.20%.
Tuesday, August 17, 2004
8/17/04 Sign Of The Times
Costco began selling caskets at two Chicago-area stores.
The poor August employment numbers will be blamed on Hurricane Charley. Meanwhile, little mention is made of plant closings, non-seasonal events. After 50 years in business, Azusa-based Pacific Precision Metals, which makes a wide range of metal products including doorknobs and automotive, furniture, and bathroom accessories, is losing the plant and shifting its workload to Mexico. Layoffs of all 300 employees will begin around September 26. Maytag is closing its refrigerator plant in Galesburg, Illinois. All 1600 employees will lose their jobs. Much of the production will be moved to Reynosa, Mexico.
Swiss chip maker, Unaxis, warned about temporary over-capacity and the slowing investment by its customers.
Since January 2001, Pennsylvania has lost 160,000 manufacturing jobs. Similar experiences have taken place in Ohio and Michigan. Voters vote with their pocketbooks.
Dr. Jane Liu, vice president of Data Analysis for Edmunds.com, stated "new models are being introduced at higher price points, but the competitiveness of the market is dramatically pushing down net prices, resulting in a record average discount." In July, the average discount from MSRP was a record $4,982, or 16.8% of MSRP. Are you still thinking about buying GM or Ford common stock?
The Empire State Manufacturing Index plunged to 12.6 in August from 35.6 in July. The index is at its lowest level since May 2003. The new-orders index fell to 14.9 from 28.6 in July, while shipments fell to 11.9 from 34. The unfilled orders index fell to –4.6 from 14.3 in the previous month. The average employee workweek fell to 6.8 in August from 22.5 in July. The bulls will tell you there is no reason to worry. The overall index is still above zero. My response is Costco has a new item waiting for you.
PricewaterhouseCoopers’ ‘Trendsetter Barometer’ interviewed CEOs of 364 privately-held product and service companies, identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from $5 million to $150 million in revenue/sales. More than half remain concerned about the stability of demand.
According to the Census Bureau, the wealthiest 20% of households in 1973 accounted for 44% of total U.S. income. Their share increased to 50% in 2002. For the bottom fifth, the share dropped from 4.2% to 3.5%. Mark Zandi, chief economist at Economy.com, stated "for those working in the bottom half of the pay scale, they’re under an enormous amount of pressure." On a weekly basis, the average wage of $525.84 is at the lowest level since October 2001. This is the primary reason Bush will lose on November 2. People on Main Street are not better off than they were in 2001.
Ryan Puckett, spokesperson for the Portland Cement Association, a trade group that represents cement companies in the U.S. and Canada, observed that the U.S. has long imported about 25% of its cement, and that much comes from China. Unfortunately, with China in an infrastructure-building boom, that country is now using far more concrete than it exports. Shortages of cement have been declared in 29 states. Puckett stated "it’s impacting customers, employees, company profits, and building projects all over the U.S. Everywhere there is construction, there are cement customers lined up without enough supply to keep them happy." Adding to the problem, are bottlenecked transportation situations at U.S. ports and rail systems, particularly that of the Union Pacific’s.
Senator Tom Harkin was angered by Dick Cheney's remarks questioning John Kerry's ability to understand the war on terrorism. Harkin stated "it just outrages me that someone who got five deferments during Vietnam and said he had 'other priorities' at the time would say that. When I hear this coming from Dick Cheney, who is a coward, who would not serve during the Vietnam War, it makes my blood boil. He'll be tough, he'll be tough with someone else's kid's blood."
Costco began selling caskets at two Chicago-area stores.
The poor August employment numbers will be blamed on Hurricane Charley. Meanwhile, little mention is made of plant closings, non-seasonal events. After 50 years in business, Azusa-based Pacific Precision Metals, which makes a wide range of metal products including doorknobs and automotive, furniture, and bathroom accessories, is losing the plant and shifting its workload to Mexico. Layoffs of all 300 employees will begin around September 26. Maytag is closing its refrigerator plant in Galesburg, Illinois. All 1600 employees will lose their jobs. Much of the production will be moved to Reynosa, Mexico.
Swiss chip maker, Unaxis, warned about temporary over-capacity and the slowing investment by its customers.
Since January 2001, Pennsylvania has lost 160,000 manufacturing jobs. Similar experiences have taken place in Ohio and Michigan. Voters vote with their pocketbooks.
Dr. Jane Liu, vice president of Data Analysis for Edmunds.com, stated "new models are being introduced at higher price points, but the competitiveness of the market is dramatically pushing down net prices, resulting in a record average discount." In July, the average discount from MSRP was a record $4,982, or 16.8% of MSRP. Are you still thinking about buying GM or Ford common stock?
The Empire State Manufacturing Index plunged to 12.6 in August from 35.6 in July. The index is at its lowest level since May 2003. The new-orders index fell to 14.9 from 28.6 in July, while shipments fell to 11.9 from 34. The unfilled orders index fell to –4.6 from 14.3 in the previous month. The average employee workweek fell to 6.8 in August from 22.5 in July. The bulls will tell you there is no reason to worry. The overall index is still above zero. My response is Costco has a new item waiting for you.
PricewaterhouseCoopers’ ‘Trendsetter Barometer’ interviewed CEOs of 364 privately-held product and service companies, identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from $5 million to $150 million in revenue/sales. More than half remain concerned about the stability of demand.
According to the Census Bureau, the wealthiest 20% of households in 1973 accounted for 44% of total U.S. income. Their share increased to 50% in 2002. For the bottom fifth, the share dropped from 4.2% to 3.5%. Mark Zandi, chief economist at Economy.com, stated "for those working in the bottom half of the pay scale, they’re under an enormous amount of pressure." On a weekly basis, the average wage of $525.84 is at the lowest level since October 2001. This is the primary reason Bush will lose on November 2. People on Main Street are not better off than they were in 2001.
Ryan Puckett, spokesperson for the Portland Cement Association, a trade group that represents cement companies in the U.S. and Canada, observed that the U.S. has long imported about 25% of its cement, and that much comes from China. Unfortunately, with China in an infrastructure-building boom, that country is now using far more concrete than it exports. Shortages of cement have been declared in 29 states. Puckett stated "it’s impacting customers, employees, company profits, and building projects all over the U.S. Everywhere there is construction, there are cement customers lined up without enough supply to keep them happy." Adding to the problem, are bottlenecked transportation situations at U.S. ports and rail systems, particularly that of the Union Pacific’s.
Senator Tom Harkin was angered by Dick Cheney's remarks questioning John Kerry's ability to understand the war on terrorism. Harkin stated "it just outrages me that someone who got five deferments during Vietnam and said he had 'other priorities' at the time would say that. When I hear this coming from Dick Cheney, who is a coward, who would not serve during the Vietnam War, it makes my blood boil. He'll be tough, he'll be tough with someone else's kid's blood."
Monday, August 16, 2004
8/16/04 Questions
Prior to injecting further funds into either the equity or debt markets, I suggest one ponder the following questions: (1) When was the last time there was such a disconnect between the Fed raising rates and 10 year Treasury bonds declining in yield? What is behind this disconnect? (2) Crude is approaching $47 a barrel. While crude has risen sharply in price over the past two months, prices at the pump have declined? What is the reason for this disconnect? If pump prices begin to rise once again, what impact will that have on consumer spending? (3) Higher prices for crude have had an impact on the world economy as a slowing economic trend is developing around the globe. As this slowing expands with record crude prices, the appetite for our nation's exports will decrease and our trade deficit will expand as it did in the latest figures. What impact will this have on our ability, if any, to attract foreign capital to fund our twin deficits? (4) What impact will the decline in the equity markets have on our economy and consumer and business spending?
Maybe there is a good reason KMart is selling some of its store locations. In the latest reproting period, the company's same-store sales dropped 14.9%.
Prior to injecting further funds into either the equity or debt markets, I suggest one ponder the following questions: (1) When was the last time there was such a disconnect between the Fed raising rates and 10 year Treasury bonds declining in yield? What is behind this disconnect? (2) Crude is approaching $47 a barrel. While crude has risen sharply in price over the past two months, prices at the pump have declined? What is the reason for this disconnect? If pump prices begin to rise once again, what impact will that have on consumer spending? (3) Higher prices for crude have had an impact on the world economy as a slowing economic trend is developing around the globe. As this slowing expands with record crude prices, the appetite for our nation's exports will decrease and our trade deficit will expand as it did in the latest figures. What impact will this have on our ability, if any, to attract foreign capital to fund our twin deficits? (4) What impact will the decline in the equity markets have on our economy and consumer and business spending?
Maybe there is a good reason KMart is selling some of its store locations. In the latest reproting period, the company's same-store sales dropped 14.9%.
Sunday, August 15, 2004
8/15/04 The Damage Is Done
In Charley’s wake there are at least 15 dead and possibly $15 billion in damages. It will be many months before the clean-up process is completed. It was the most severe hurricane to hit Florida since Andrew in 1992.
According to the California state Department of Insurance, state workers’ comp insurance rates rose an average of 149% between 2000 and 2003.
According to a recent study by the National Center for Policy Analysis, it is estimated that elderly funding will consume 3.6% of federal income taxes this year, twice that in five years, and twice that again in ten years. The aging of our population is possibly the most significant trend in the U.S.
Bush: "I’d like to be the person known as somebody getting the job done." He should have thought of that before invading Iraq without a supporting coalition of foreign nations. He should have thought of that before going on a discretionary spending spree and constructing record-setting twin tower deficits. He should have thought of that before bragging to our citizenry in February 2002 that our economic recovery would produce 6 million net new jobs. He should have thought of that before parading around the country telling folks he wanted each and every American to have a job. Instead there are less jobs. Jobs are returning less after inflation than they did in January 2001 and the greatest percentage of job growth since February 2002 has been in part-time employment. Families are worse off than they were in January 2001. Maybe if Bush had had to depend on a job for his livelihood he would understand the economic struggles on Main Street. He won’t find them in Medina, Washington. Bush has all but exhausted the reservoir of confidence Americans have in their leaders. He has chipped away at the fabric woven over the past two plus centuries. Fortunately, as we look into the mirror, we can say you can fool us some of the time but not all of the time. In two and one-half months his job will officially be over. He never understood that the job entails leading all the people and not just a few. His mission was never started much less accomplished.
Delta Airlines threatened bankruptcy unless they could achieve more cuts from the pilots and the like. Unfortunately, the company didn’t realize that threats can wear away loyalty. Flights are being canceled because sufficient number of crew members are not showing for work. Planes don’t fly without pilots. Passengers are being stranded in cities, such as, Atlanta and are being provided rooms at the Sheraton Gateway Hotel. Is this any way to run an airline?
In Charley’s wake there are at least 15 dead and possibly $15 billion in damages. It will be many months before the clean-up process is completed. It was the most severe hurricane to hit Florida since Andrew in 1992.
According to the California state Department of Insurance, state workers’ comp insurance rates rose an average of 149% between 2000 and 2003.
According to a recent study by the National Center for Policy Analysis, it is estimated that elderly funding will consume 3.6% of federal income taxes this year, twice that in five years, and twice that again in ten years. The aging of our population is possibly the most significant trend in the U.S.
Bush: "I’d like to be the person known as somebody getting the job done." He should have thought of that before invading Iraq without a supporting coalition of foreign nations. He should have thought of that before going on a discretionary spending spree and constructing record-setting twin tower deficits. He should have thought of that before bragging to our citizenry in February 2002 that our economic recovery would produce 6 million net new jobs. He should have thought of that before parading around the country telling folks he wanted each and every American to have a job. Instead there are less jobs. Jobs are returning less after inflation than they did in January 2001 and the greatest percentage of job growth since February 2002 has been in part-time employment. Families are worse off than they were in January 2001. Maybe if Bush had had to depend on a job for his livelihood he would understand the economic struggles on Main Street. He won’t find them in Medina, Washington. Bush has all but exhausted the reservoir of confidence Americans have in their leaders. He has chipped away at the fabric woven over the past two plus centuries. Fortunately, as we look into the mirror, we can say you can fool us some of the time but not all of the time. In two and one-half months his job will officially be over. He never understood that the job entails leading all the people and not just a few. His mission was never started much less accomplished.
Delta Airlines threatened bankruptcy unless they could achieve more cuts from the pilots and the like. Unfortunately, the company didn’t realize that threats can wear away loyalty. Flights are being canceled because sufficient number of crew members are not showing for work. Planes don’t fly without pilots. Passengers are being stranded in cities, such as, Atlanta and are being provided rooms at the Sheraton Gateway Hotel. Is this any way to run an airline?
Saturday, August 14, 2004
8/14/04 The Improving Inflation Front
Crude did hit $46 a barrel yesterday; however, there were other bright spots. According to the BLS, the crude goods index declined 0.2% in July after climbing 1.6% in June. The index for finished consumer foods declined 1.6% in July, compared with a 0.6% drop in June. The core PPI is up 1.7% in the past 12 months; however, in July it rose a scant 0.1%.
The Hune trade gap increased by $19 billion to a record $55.8 billion.
China stated crude import growth held in July at 40% versus the same period last year.
The Univ. of Michigan August consumer sentiment declined from July's 96.7 to 94. The expectations index dropped to 84.7 from 91.2.
Crude did hit $46 a barrel yesterday; however, there were other bright spots. According to the BLS, the crude goods index declined 0.2% in July after climbing 1.6% in June. The index for finished consumer foods declined 1.6% in July, compared with a 0.6% drop in June. The core PPI is up 1.7% in the past 12 months; however, in July it rose a scant 0.1%.
The Hune trade gap increased by $19 billion to a record $55.8 billion.
China stated crude import growth held in July at 40% versus the same period last year.
The Univ. of Michigan August consumer sentiment declined from July's 96.7 to 94. The expectations index dropped to 84.7 from 91.2.
Thursday, August 12, 2004
8/13/04 Plant Closings Are Accelerating
La-Z-Boy blames the closing of three manufacturing plants on the U.S. antidumping tariffs set against Chinese producers of wood furniture. The company will lay off 645 employees. Low-carb diets took a toll on the NorSun Food Group's potato processing plant in Ft. Kent, Maine. The plant closed without advanced warning and 50 employees were out of work. Pennsylvania House Furniture will close its manufacturing and warehouse facilities in Lewisburg, White Deer, and Milton, PA. About 425 jobs will be lost. MeadWestvaco will close its St. Joseph, MO operations and 400 jobs will be lost. They will also close a facility in Garland, TX and 200 jobs will be eliminated. The Columbus, Ohio Techneglas plant will close and 300+ employees will lose their jobs. The 106 year old Union City Body plant in Indiana will close and 115 jobs will be lost. Fifteen days like this and you'll have a loss of 32,000 jobs. This is not a soft patch. Plant closings are building a head of steam. It's no wonder that the yield on 10 year treasury notes has dropped to 4.24%. It is also not surprising that, in the latest American Research Group poll, Kerry leads Bush 50 to 43, and in the latest Quinnpiac poll in Florida, Kerry leads Bush 47 to 41.
The BLS reported that prices for imported consumer goods were unchanged for the second consecutive month in July. In contrast, imported capital goods prices fell 0.1% in July, the sixth consecutive monthly decline. Export prices rose 0.4% in July, and overall, export prices rose 4.4% over the last year.
GM recalled 200,000 Buicks.
Mexico's auto industry output and exports fell in July.
July retail sales, ex autos, were up only 0.2%. Record high energy prices and stagnant wage growth are taking a toll on the paycheck-to-paycheck consumer. Muted sales are contributing to rising business inventories.
IBM stated it continues to experience growth in consulting and services, and the company will hire 18,800 new workers in 2004 with one-third in the U.S. and the Americas.
Servers and printers highlight strategic product growth for Dell in the latest quarter. In addition, U.S. consumers purchased 29% more Dell notebook computers than in the same period a year ago. The company generated more than $700 million in cash from operations in the quarter. Dell continues to be one of the great ones.
GDP annualized growth in Japan was a disappointing 1.7% rather than the expectations of 4.1%
There are many analysts who ponder the significance of round numbers, such as the Dow 10,000, the Nasdaq 2000, and gold $400. It's fair to state that most of these analysts believe there is a nugget in their spoken and/or written words. I suggest the nugget is not in the proximity to the round numbers but rather the substance and sustainability supporting the number. The most recent economic data has created a question about the judgment of those calling the month of June simply a "soft patch." When you question the reliability of the Fed's thinking, it creates an uneasiness in the marketplace. This uneasiness flushes round numbers like shit going through a goose. As such, the Dow closed at 9814 and the Nasdaq at 1752.
La-Z-Boy blames the closing of three manufacturing plants on the U.S. antidumping tariffs set against Chinese producers of wood furniture. The company will lay off 645 employees. Low-carb diets took a toll on the NorSun Food Group's potato processing plant in Ft. Kent, Maine. The plant closed without advanced warning and 50 employees were out of work. Pennsylvania House Furniture will close its manufacturing and warehouse facilities in Lewisburg, White Deer, and Milton, PA. About 425 jobs will be lost. MeadWestvaco will close its St. Joseph, MO operations and 400 jobs will be lost. They will also close a facility in Garland, TX and 200 jobs will be eliminated. The Columbus, Ohio Techneglas plant will close and 300+ employees will lose their jobs. The 106 year old Union City Body plant in Indiana will close and 115 jobs will be lost. Fifteen days like this and you'll have a loss of 32,000 jobs. This is not a soft patch. Plant closings are building a head of steam. It's no wonder that the yield on 10 year treasury notes has dropped to 4.24%. It is also not surprising that, in the latest American Research Group poll, Kerry leads Bush 50 to 43, and in the latest Quinnpiac poll in Florida, Kerry leads Bush 47 to 41.
The BLS reported that prices for imported consumer goods were unchanged for the second consecutive month in July. In contrast, imported capital goods prices fell 0.1% in July, the sixth consecutive monthly decline. Export prices rose 0.4% in July, and overall, export prices rose 4.4% over the last year.
GM recalled 200,000 Buicks.
Mexico's auto industry output and exports fell in July.
July retail sales, ex autos, were up only 0.2%. Record high energy prices and stagnant wage growth are taking a toll on the paycheck-to-paycheck consumer. Muted sales are contributing to rising business inventories.
IBM stated it continues to experience growth in consulting and services, and the company will hire 18,800 new workers in 2004 with one-third in the U.S. and the Americas.
Servers and printers highlight strategic product growth for Dell in the latest quarter. In addition, U.S. consumers purchased 29% more Dell notebook computers than in the same period a year ago. The company generated more than $700 million in cash from operations in the quarter. Dell continues to be one of the great ones.
GDP annualized growth in Japan was a disappointing 1.7% rather than the expectations of 4.1%
There are many analysts who ponder the significance of round numbers, such as the Dow 10,000, the Nasdaq 2000, and gold $400. It's fair to state that most of these analysts believe there is a nugget in their spoken and/or written words. I suggest the nugget is not in the proximity to the round numbers but rather the substance and sustainability supporting the number. The most recent economic data has created a question about the judgment of those calling the month of June simply a "soft patch." When you question the reliability of the Fed's thinking, it creates an uneasiness in the marketplace. This uneasiness flushes round numbers like shit going through a goose. As such, the Dow closed at 9814 and the Nasdaq at 1752.
8/12/04 Assurances Are Not Sure Things
The Saudis tried to reassure the market that, by increasing daily production, oil shortages would be avoided and the price would go down. The price did go down on that announcement- for an hour or so. Today Sept. crude futures are at $45.12. So much for placing value on assurances.
The opposite is true in the treasury market. The "experts" give daily reasons why interest rates must rise. The market ignores the experts. A clue might be that, in the most recent report, business sales rose only 0.1% and that inventories increased 1.1% in June. Another clue might be that, even with crude at record levels, import prices rose only 0.2% in July. This is even more significant when you consider that consumer prices in China rose 5.3% in the latest month. I found that interesting since the Financial Times reported that Chinese data show easing inflationary pressures. Lastly, Redbook Research stated that sales at major retailers in August were down 0.5% compared with July.
Blue Chip Economic Indicators Survey cut their growth forecast stating "the persistence of sky-high energy prices, lackluster growth in employment and earnings, a weak stock market, anxiety about possible terrorist attacks, and an uncertain outcome to this November's national elections could dampen consumer spending and business investment well into the fall."
Bush: "I'm running for re-election because I understand how to take a strong economy and make it stronger."
Niles Helmboldt, a San Francisco banker and a Republican: "I'm not as well off as I was. My cost of living has gone up, but wages have not kept pace. I don't see his (Bush's) economic policies helping. It's not a pretty picture."
The IEA stated world oil demand will jump by 1.8 million barrels in 2005 after a gain of 2.5 million barrels a day this year.
Dramexchange.com stated there is weaker-than-expected demand for computer-memory chips from computer manufacturers.
John Chambers of Cisco: "Most of the CEOs that I talk with view the economy as growing at a modest level and are a little more cautious...than they were a quarter ago." John, I would asy HP is a lot more than cautious. They badly missed estimates for this latest quarter and for the next quarter they will also disappoint badly. Fortunately, there is Wal-Mart. Even though their profits are rising faster than sales, for the latest quarter, comps for the Wal-Mart stores rose 3.2% while Sam's Club hit it big at an 8.8% jump.
New federal overtime rules go into effect in less than two weeks. Generally, employees are eligible for overtime if they work more than 40 hours a week, except if they are classified as administrative workers, executives, or professionals. Workers in those classifications are exempt from overtime pay.
The middle class squeeze is partly explained by the Kaiser Family Foundation, Health Reserach and Education Trust. They stated that, since Jan. 2001, the cost of family health insurance has increased more than $2,700. From 2001 to 2004, workers' share of family health care premiums has increased by nearly 50%.
The Saudis tried to reassure the market that, by increasing daily production, oil shortages would be avoided and the price would go down. The price did go down on that announcement- for an hour or so. Today Sept. crude futures are at $45.12. So much for placing value on assurances.
The opposite is true in the treasury market. The "experts" give daily reasons why interest rates must rise. The market ignores the experts. A clue might be that, in the most recent report, business sales rose only 0.1% and that inventories increased 1.1% in June. Another clue might be that, even with crude at record levels, import prices rose only 0.2% in July. This is even more significant when you consider that consumer prices in China rose 5.3% in the latest month. I found that interesting since the Financial Times reported that Chinese data show easing inflationary pressures. Lastly, Redbook Research stated that sales at major retailers in August were down 0.5% compared with July.
Blue Chip Economic Indicators Survey cut their growth forecast stating "the persistence of sky-high energy prices, lackluster growth in employment and earnings, a weak stock market, anxiety about possible terrorist attacks, and an uncertain outcome to this November's national elections could dampen consumer spending and business investment well into the fall."
Bush: "I'm running for re-election because I understand how to take a strong economy and make it stronger."
Niles Helmboldt, a San Francisco banker and a Republican: "I'm not as well off as I was. My cost of living has gone up, but wages have not kept pace. I don't see his (Bush's) economic policies helping. It's not a pretty picture."
The IEA stated world oil demand will jump by 1.8 million barrels in 2005 after a gain of 2.5 million barrels a day this year.
Dramexchange.com stated there is weaker-than-expected demand for computer-memory chips from computer manufacturers.
John Chambers of Cisco: "Most of the CEOs that I talk with view the economy as growing at a modest level and are a little more cautious...than they were a quarter ago." John, I would asy HP is a lot more than cautious. They badly missed estimates for this latest quarter and for the next quarter they will also disappoint badly. Fortunately, there is Wal-Mart. Even though their profits are rising faster than sales, for the latest quarter, comps for the Wal-Mart stores rose 3.2% while Sam's Club hit it big at an 8.8% jump.
New federal overtime rules go into effect in less than two weeks. Generally, employees are eligible for overtime if they work more than 40 hours a week, except if they are classified as administrative workers, executives, or professionals. Workers in those classifications are exempt from overtime pay.
The middle class squeeze is partly explained by the Kaiser Family Foundation, Health Reserach and Education Trust. They stated that, since Jan. 2001, the cost of family health insurance has increased more than $2,700. From 2001 to 2004, workers' share of family health care premiums has increased by nearly 50%.
Tuesday, August 10, 2004
8/11/04 Measure This!
Tomorrow is a travel day. As such, I continue as a substitute blogger this afternoon. For the first time, crude futures topped $45 a barrel. Richard Schaeffer of ABN AMRO, while talking about the terror premium for oil, stated "we probably have a $5 to $10 extra charge on top of what the price should be." Meanwhile, the Energy Dept predicted lower retail gas prices and crude for the quarter; however, the price level predicted, $41 a barrel, was10% higher than the prediction made just one month ago. Rather than going out on a terror limb and shorting crude futures, one might consider buying the yen. The risk/reward appears more favorable.
I began by discussing crude because the Fed stated "the economy appears poised to resume a stronger pace of expansion going forward." They blamed the recent softness in output growth and the slowing of job creation on "the substantial rise in energy prices." In sum, the Fed is basing a forecast on a decline in oil prices, and that is highly speculative. The Fed's Phillips stated a Sept. interest rate hike was "a toss up." That indicates the Fed's lack of confidence in their forecasting ability. The Fed and Bush have at least three things in common- both fail to acknowledge mistakes; both attempt to mask mistakes with rhetoric; and both try to change the landscape to suit their original positions. Inflation, ex energy, is moderating. Wages and benefits continue to trail the inflation rate on an annualized basis. Productivity continues to exceed inflation. GDP growth is declining monthly. Job creation has fallen sharply for three consecutive months. There was not one valid reason to raise the Fed Funds rate and the Discount rate today.
Housing has been the strongest sector of the economy for the past two years. According to a July survey conducted by the National Association of Home Builders, builders report shortages of cement, gypsum wallboard, oriented strand board, steel framing, and insulating materials. They state these shortages could result in serious disruptions in the housing market.
Countrywide Credit's July loan production fell to $30 billion from $51.8 billion last July and down 7% from this June.
I wonder whether the Fed knows Nat'l Semi expects 1st quarter sales to drop 4-5% and that Cisco anticipates sales in the Sept. quarter to be flat to up 2%. Cisco's cash flow from operations in the June quarter were $2.1 billion, a decline from the prior quarter's $2.4 billion. Inventory turns were 6.4 this quarter compared with the year ago's 6.8 times. In this quarter Cisco repurchased 90 million shares for $2 billion or all but $100 million of their latest 90 days of cash flow. For the entire fiscal year, they repurchased 408 million shares for $9.1 billion. Considering the limited growth in routers and switches, this does not appear to be money well-spent.
Prior to raising rates, the Fed might have considered the growing list of layoffs announced just recently: KMart to cut 10% of HQ; Lockheed Martin to cut 149; Bosch USA to lay off 530; Sykes to cut 121; Dow Chemical to eliminate 160 employees; the IRS will cut 218 tech employees; Gruner & Jahr USA to lay off 105 workers; Bristol Meyers will phase out 120 jobs; and Premier Blue Cross to cut 82 employees.
A reporter from the Arizona Republic observed John McCain embarked on a multi-state campaign swing with Pres. Bush for what t-shirt vendors shouldmarket as the "Dishonest and Dishonorable Tour."
Tomorrow is a travel day. As such, I continue as a substitute blogger this afternoon. For the first time, crude futures topped $45 a barrel. Richard Schaeffer of ABN AMRO, while talking about the terror premium for oil, stated "we probably have a $5 to $10 extra charge on top of what the price should be." Meanwhile, the Energy Dept predicted lower retail gas prices and crude for the quarter; however, the price level predicted, $41 a barrel, was10% higher than the prediction made just one month ago. Rather than going out on a terror limb and shorting crude futures, one might consider buying the yen. The risk/reward appears more favorable.
I began by discussing crude because the Fed stated "the economy appears poised to resume a stronger pace of expansion going forward." They blamed the recent softness in output growth and the slowing of job creation on "the substantial rise in energy prices." In sum, the Fed is basing a forecast on a decline in oil prices, and that is highly speculative. The Fed's Phillips stated a Sept. interest rate hike was "a toss up." That indicates the Fed's lack of confidence in their forecasting ability. The Fed and Bush have at least three things in common- both fail to acknowledge mistakes; both attempt to mask mistakes with rhetoric; and both try to change the landscape to suit their original positions. Inflation, ex energy, is moderating. Wages and benefits continue to trail the inflation rate on an annualized basis. Productivity continues to exceed inflation. GDP growth is declining monthly. Job creation has fallen sharply for three consecutive months. There was not one valid reason to raise the Fed Funds rate and the Discount rate today.
Housing has been the strongest sector of the economy for the past two years. According to a July survey conducted by the National Association of Home Builders, builders report shortages of cement, gypsum wallboard, oriented strand board, steel framing, and insulating materials. They state these shortages could result in serious disruptions in the housing market.
Countrywide Credit's July loan production fell to $30 billion from $51.8 billion last July and down 7% from this June.
I wonder whether the Fed knows Nat'l Semi expects 1st quarter sales to drop 4-5% and that Cisco anticipates sales in the Sept. quarter to be flat to up 2%. Cisco's cash flow from operations in the June quarter were $2.1 billion, a decline from the prior quarter's $2.4 billion. Inventory turns were 6.4 this quarter compared with the year ago's 6.8 times. In this quarter Cisco repurchased 90 million shares for $2 billion or all but $100 million of their latest 90 days of cash flow. For the entire fiscal year, they repurchased 408 million shares for $9.1 billion. Considering the limited growth in routers and switches, this does not appear to be money well-spent.
Prior to raising rates, the Fed might have considered the growing list of layoffs announced just recently: KMart to cut 10% of HQ; Lockheed Martin to cut 149; Bosch USA to lay off 530; Sykes to cut 121; Dow Chemical to eliminate 160 employees; the IRS will cut 218 tech employees; Gruner & Jahr USA to lay off 105 workers; Bristol Meyers will phase out 120 jobs; and Premier Blue Cross to cut 82 employees.
A reporter from the Arizona Republic observed John McCain embarked on a multi-state campaign swing with Pres. Bush for what t-shirt vendors shouldmarket as the "Dishonest and Dishonorable Tour."
8/10/04 Productivity And Prosperity
There are some who hold that the productivity of jobs is a key element to our prosperity and not necessarily the number of jobs reported in either an establishment or household survey. In actuality, there are many components to the makings of prosperity. If we examine the latest BLS numbers, it will quickly become apparent that the Bush tax cuts have not initiated positive impetus in the workplace for those producing output in both the nonfarm and business sectors.
In the second quarter, productivity rose 2.9% in the nonfarm sector and 1.9% in the business sector while unit labor costs increased 1.9% on an annualized basis. During this period, real hourly compensation, adjusted for inflation, increased 0.1% on an annualized basis. Prductivity growth in the business sector reflected increases of 3.5% in output and 1.5% in hours. In manufacturing, in the second quarter, productivity rose 7.5% in manufacturing as output increased 6.6% and hours declined 0.9%(seasonally adjusted rates); growth was 5.7% in durable goods manufacturing; and 10.7% in nondurable goods. It should be noted that, according to the BLS, output and hours include about 13% of U.S. business-sector employment.
Analyzing these BLS numbers, we can quickly come to the realization that, those producing the output, have lagged in hours worked and in hourly compensation. Taking all the BLS numbers as a whole, since Jan. 2001, there has been a decline in hours worked, in compensation adjusted for inflation, and in the number of jobs in the nonfarm sector. Even though productivity has increased over this period, prosperity has not found its way into paychecks of the output producing workers. Greenspan does understand this. Many other economists and doctorates do not. That is most unfortunate. It goes to the core of what is wrong in the workplace.
Crude hovers close to the $45 level.
Trump Hotels to file Chapter 11.
Ford is laying off 5,000 salaried employees.
There are some who hold that the productivity of jobs is a key element to our prosperity and not necessarily the number of jobs reported in either an establishment or household survey. In actuality, there are many components to the makings of prosperity. If we examine the latest BLS numbers, it will quickly become apparent that the Bush tax cuts have not initiated positive impetus in the workplace for those producing output in both the nonfarm and business sectors.
In the second quarter, productivity rose 2.9% in the nonfarm sector and 1.9% in the business sector while unit labor costs increased 1.9% on an annualized basis. During this period, real hourly compensation, adjusted for inflation, increased 0.1% on an annualized basis. Prductivity growth in the business sector reflected increases of 3.5% in output and 1.5% in hours. In manufacturing, in the second quarter, productivity rose 7.5% in manufacturing as output increased 6.6% and hours declined 0.9%(seasonally adjusted rates); growth was 5.7% in durable goods manufacturing; and 10.7% in nondurable goods. It should be noted that, according to the BLS, output and hours include about 13% of U.S. business-sector employment.
Analyzing these BLS numbers, we can quickly come to the realization that, those producing the output, have lagged in hours worked and in hourly compensation. Taking all the BLS numbers as a whole, since Jan. 2001, there has been a decline in hours worked, in compensation adjusted for inflation, and in the number of jobs in the nonfarm sector. Even though productivity has increased over this period, prosperity has not found its way into paychecks of the output producing workers. Greenspan does understand this. Many other economists and doctorates do not. That is most unfortunate. It goes to the core of what is wrong in the workplace.
Crude hovers close to the $45 level.
Trump Hotels to file Chapter 11.
Ford is laying off 5,000 salaried employees.
Monday, August 09, 2004
8/9/04 The Market Is A Leading Economic Indicator
Acorn mutual fund's Ralph Wanger stated "the market usually leads. O ne could argue that the recovery we've had was predicted by the market last year." Conversely, with the market indexes making new 2004 lows, maybe the present slowdown and possible future recession is being predicted. However, the most recent Bloomberg survey of 54 economists reveals expectations of third quarter GDP growth of 3.9%. In other words, they expect a 30% improvement from the 3% growth rate in the second quarter. These are the same economists who predicted a gain in July's non-farm payrolls of 240,000. I wonder how many of these same economists believe the Snowman's predictions of strong job gains in the second half of this year. They probably forgot that the Snowman's performance at CSX was the worst of all the CEOs at the major railroads. That may be the reason for Bush choosing him as Secretary of the Treasury. He could relate to him.
Why was U.S. machine tool demand up about 32% in the six months ended June 30? Bush's 50% expensing allowance for machine tools is the answer. That provision expires at the end of this year. This is no more than demand on steroids. It creates a false impression of well-being and is not sustainable. Even the Fed took the bait. They have forgotten the Hummer tax-credit.
According to a Time Magazine poll published Saturday, the economy is the biggest issue in this year's election. Even if Bush "finds" bin Laden, he still will be playing a card from a losing deck.
Who is hiring? Last year, Infosys of Bangalore hired 9,000 employees. That's more than Microsoft hired. Revenues at Infosys exceeded $1 billion for the first time. Microsoft's revenues are over 30 times greater. Infosys is expanding in the Silicon Valley and Texas. Microsoft is expanding in India.
Bangalore-based Elind Computers developed an internalization engine called Stride that can intelligently cross/or route orders depending on the liquidity source. Wall Street firms can hopefully improve service and lower transaction costs.
Acorn mutual fund's Ralph Wanger stated "the market usually leads. O ne could argue that the recovery we've had was predicted by the market last year." Conversely, with the market indexes making new 2004 lows, maybe the present slowdown and possible future recession is being predicted. However, the most recent Bloomberg survey of 54 economists reveals expectations of third quarter GDP growth of 3.9%. In other words, they expect a 30% improvement from the 3% growth rate in the second quarter. These are the same economists who predicted a gain in July's non-farm payrolls of 240,000. I wonder how many of these same economists believe the Snowman's predictions of strong job gains in the second half of this year. They probably forgot that the Snowman's performance at CSX was the worst of all the CEOs at the major railroads. That may be the reason for Bush choosing him as Secretary of the Treasury. He could relate to him.
Why was U.S. machine tool demand up about 32% in the six months ended June 30? Bush's 50% expensing allowance for machine tools is the answer. That provision expires at the end of this year. This is no more than demand on steroids. It creates a false impression of well-being and is not sustainable. Even the Fed took the bait. They have forgotten the Hummer tax-credit.
According to a Time Magazine poll published Saturday, the economy is the biggest issue in this year's election. Even if Bush "finds" bin Laden, he still will be playing a card from a losing deck.
Who is hiring? Last year, Infosys of Bangalore hired 9,000 employees. That's more than Microsoft hired. Revenues at Infosys exceeded $1 billion for the first time. Microsoft's revenues are over 30 times greater. Infosys is expanding in the Silicon Valley and Texas. Microsoft is expanding in India.
Bangalore-based Elind Computers developed an internalization engine called Stride that can intelligently cross/or route orders depending on the liquidity source. Wall Street firms can hopefully improve service and lower transaction costs.
Sunday, August 08, 2004
8/8/04 Playing Cards
Bush: "We're a nation in danger." This was from yesterday's radio address. He elected to play the terror/danger card once again. It's over and over again. Why? Would you like him to talk about the economy? He can't relate to that. He stated the other day "the economy is strong and getting stronger." He has a job- at least for another few months. He has never worried about finding employment. Family and friends took care of that chore. As such, he spends and spends. He doesn't know anything different. It's not his money. The twin tower deficits depreciate the dollar and erode the purchasing power of Americans. Bush pushes for a weaker dollar in an effort to enhance exports. Unfortunately, with all the plant closings and loss of jobs, what do we export? Boeing will deliver 285 planes this year, and only a portion are for export. We export farm products. Of course, farm imports are rising each year. Just go to the supermarket. Buying American might mean toothpaste. If you go to McDonald's, the meat could come from Canada. The coffee at Starbucks comes from many foreign countries. Krispy Kreme is American, but Americans are cutting down on carbs. You can't blame Bush. It's the terror card or bust.
The Fed meets Tuesday. They can't play the growth card. Second quarter growth dropped to 3%, and the third quarter will certainly be less. They are left with the inflation card. They can point to crude being up 30% this year and milk is higher. Of course, wages are only 1.9% higher on an annual basis. If they don't increase rates, they signal the economy is in more than a "soft patch." If they raise rates, economic activity, including hiring, could decrease even more so. Will they swallow and state they misread the economy? Can you see these supposed geniuses with the doctorates doing that? They can always pull a Snowman and state growth will pick up and so will hiring, and then remark, if wrong, adjustments can be fine-tuned down the road. It's the soft patch card or bust.
Against the euro, the dollar had its biggest weekly drop since November.
Schwab forecasts more job cuts.
High crude prices are hurting airlines, truckers, and orange juice manufacturers.
Greg Maddux gets his 300th win.
San Jose's city manager forecasts that annual revenue from the federal gov't will plunge 80% this year to $1 million, and that California's new budget will eliminate another $11 million from the city's $725 million general fund.
The Climate Prediction Centre stated sea surface temperatures have risen in the central Pacific Ocean and may "indicate the possible early stages of a warm episode" and that El Nino could possibly develop by late 2004.
Bush: "We're a nation in danger." This was from yesterday's radio address. He elected to play the terror/danger card once again. It's over and over again. Why? Would you like him to talk about the economy? He can't relate to that. He stated the other day "the economy is strong and getting stronger." He has a job- at least for another few months. He has never worried about finding employment. Family and friends took care of that chore. As such, he spends and spends. He doesn't know anything different. It's not his money. The twin tower deficits depreciate the dollar and erode the purchasing power of Americans. Bush pushes for a weaker dollar in an effort to enhance exports. Unfortunately, with all the plant closings and loss of jobs, what do we export? Boeing will deliver 285 planes this year, and only a portion are for export. We export farm products. Of course, farm imports are rising each year. Just go to the supermarket. Buying American might mean toothpaste. If you go to McDonald's, the meat could come from Canada. The coffee at Starbucks comes from many foreign countries. Krispy Kreme is American, but Americans are cutting down on carbs. You can't blame Bush. It's the terror card or bust.
The Fed meets Tuesday. They can't play the growth card. Second quarter growth dropped to 3%, and the third quarter will certainly be less. They are left with the inflation card. They can point to crude being up 30% this year and milk is higher. Of course, wages are only 1.9% higher on an annual basis. If they don't increase rates, they signal the economy is in more than a "soft patch." If they raise rates, economic activity, including hiring, could decrease even more so. Will they swallow and state they misread the economy? Can you see these supposed geniuses with the doctorates doing that? They can always pull a Snowman and state growth will pick up and so will hiring, and then remark, if wrong, adjustments can be fine-tuned down the road. It's the soft patch card or bust.
Against the euro, the dollar had its biggest weekly drop since November.
Schwab forecasts more job cuts.
High crude prices are hurting airlines, truckers, and orange juice manufacturers.
Greg Maddux gets his 300th win.
San Jose's city manager forecasts that annual revenue from the federal gov't will plunge 80% this year to $1 million, and that California's new budget will eliminate another $11 million from the city's $725 million general fund.
The Climate Prediction Centre stated sea surface temperatures have risen in the central Pacific Ocean and may "indicate the possible early stages of a warm episode" and that El Nino could possibly develop by late 2004.
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