2/1/03 Is January Really Over?
For the month of January The Dow dropped 3.5%, the S&P 2.7%, and the Nasdaq 1.1%. Unfortunately, for the most part, it is fair to state as January goes so goes the rest of the year. Yale Hirsch's statistics show that since 1950 the month of January has been the accurate barometer for the remainder of the yesr 92% of the time! There have been only four misses, and I don't believe for one minute that 2003 will be the fifth. I recommend that you plan accordingly, and make the trend your friend and place the percentages in your corner.
The other day I commented on the GDP fourth quarter numbers. I would like to elaborate. Government spending in this quarter rose sharply. Had that not been the case, the GDP number would have been a negative one. I feel very strongly that the government cannot spend our way out of a recession(yes, we are in a recession) and, if they are not prudent, can spend our way into something much more serious.
Friday, January 31, 2003
1/31/03 The Fed
The December minutes of the Fed meeting revealed that partial justification for holding rates steady at that time was the market's late year rally. Using that thinking, then rates should have been lowered on Wednesday. The rally was wiped out by recent losses.
Ray Owens, vice president and senior economist at the Federal Reserve Bank in Richmond, Va said "people reading the economic tea leaves should be encouraged by strong consumer confidence." He must be on ecstasy tea leaves.
Dow Chemical cuts 4000 jobs.
Boeing's profits seen dropping in 2003.
Nikkei at a 20 year low.
eMarketer says the auto industry will account for 27% of all B2B e-commerce transactions by 2004.
According to a study prepared by Dell'Oro Group, global sales of routers will decline for the third consecutive year in 2003, and are forecast to fall 2%.
The December minutes of the Fed meeting revealed that partial justification for holding rates steady at that time was the market's late year rally. Using that thinking, then rates should have been lowered on Wednesday. The rally was wiped out by recent losses.
Ray Owens, vice president and senior economist at the Federal Reserve Bank in Richmond, Va said "people reading the economic tea leaves should be encouraged by strong consumer confidence." He must be on ecstasy tea leaves.
Dow Chemical cuts 4000 jobs.
Boeing's profits seen dropping in 2003.
Nikkei at a 20 year low.
eMarketer says the auto industry will account for 27% of all B2B e-commerce transactions by 2004.
According to a study prepared by Dell'Oro Group, global sales of routers will decline for the third consecutive year in 2003, and are forecast to fall 2%.
Thursday, January 30, 2003
1/30/03 Sphere Sovereignty
The above words mean decisions should be made whenever and wherever possible at the level closest to those affected by the decision. Unelected and unaccountable government employees ahould not be decision makers for healthcare reform. Consumers must be empowered to have expanded not limited choice. The Federal Employees Health Benefits Program (FEHBP) covers Congress, the White House staff, the federal judiciary, the U.S. postal service, and 9 million federal workers, retirees, and their dependents. It has been mostly successful and quite costly. The taxpayers have been paying for FEHBP. Healthcare must available for all, cost effective, and with on-going choice. Naturally, that's quite a task. So is making available an anti-aids drug cocktail for less than $1 per patient per day. India's Cipla accomplishes that feat, and it's something with which I am quite knowledgeable.
The GDP grew at a 0.7% rate in last year's 4th quarter. Consumer spending increased at a 1% rate for that period- the weakest since the 1st quarter of 1993. There was a 7.3% drop in spending on durable goods, such as, autos, and that was the biggest drop in about 12 years. However, government spending rose at a 4.6% annual rate, and this reflects an increased size and scope of governemnt. Bush campaigned on the theme "my opponent trust goverment, I trust you." With the growing loss of personal freedoms and the lack of fiscal responsibility, I don't believe that campaign slogan could be made today.
Jobless claims pick up again.
Disney's Eisner got a $5 million bonus in 2002. Meanwhile, the Disney stockholders lost their shirts.
Goodyear may trim their workforce.
The 2 month oil strike in Venezuela has forced at least 25,000 companies to go out of business.
Last year Florida's exports to its key Latin American trading partners fell by 25% or almost $4 billion.
Bank One to cut 700 jobs in Chicago.
GM has a 165 day supply of the Saturn LS at its plant in Wilmington, Del. That's double the norm. Chrysler's PT Cruiser has 125 days of inventory. The Ford Focus, Thunderbird, and Mustang have high inventory numbers. The Crown Victoria and the Chevy Astro are seriously overstocked. The list goes on and on. You can expect plant downtimes and lower prices for many vehicles as well as greater incentives. Auto profits will be lower.
Publilius Syrus: "Never promise more than you can perform."
The above words mean decisions should be made whenever and wherever possible at the level closest to those affected by the decision. Unelected and unaccountable government employees ahould not be decision makers for healthcare reform. Consumers must be empowered to have expanded not limited choice. The Federal Employees Health Benefits Program (FEHBP) covers Congress, the White House staff, the federal judiciary, the U.S. postal service, and 9 million federal workers, retirees, and their dependents. It has been mostly successful and quite costly. The taxpayers have been paying for FEHBP. Healthcare must available for all, cost effective, and with on-going choice. Naturally, that's quite a task. So is making available an anti-aids drug cocktail for less than $1 per patient per day. India's Cipla accomplishes that feat, and it's something with which I am quite knowledgeable.
The GDP grew at a 0.7% rate in last year's 4th quarter. Consumer spending increased at a 1% rate for that period- the weakest since the 1st quarter of 1993. There was a 7.3% drop in spending on durable goods, such as, autos, and that was the biggest drop in about 12 years. However, government spending rose at a 4.6% annual rate, and this reflects an increased size and scope of governemnt. Bush campaigned on the theme "my opponent trust goverment, I trust you." With the growing loss of personal freedoms and the lack of fiscal responsibility, I don't believe that campaign slogan could be made today.
Jobless claims pick up again.
Disney's Eisner got a $5 million bonus in 2002. Meanwhile, the Disney stockholders lost their shirts.
Goodyear may trim their workforce.
The 2 month oil strike in Venezuela has forced at least 25,000 companies to go out of business.
Last year Florida's exports to its key Latin American trading partners fell by 25% or almost $4 billion.
Bank One to cut 700 jobs in Chicago.
GM has a 165 day supply of the Saturn LS at its plant in Wilmington, Del. That's double the norm. Chrysler's PT Cruiser has 125 days of inventory. The Ford Focus, Thunderbird, and Mustang have high inventory numbers. The Crown Victoria and the Chevy Astro are seriously overstocked. The list goes on and on. You can expect plant downtimes and lower prices for many vehicles as well as greater incentives. Auto profits will be lower.
Publilius Syrus: "Never promise more than you can perform."
Wednesday, January 29, 2003
1/29/03 Only 5%
General MacArthur: "Expect only 5% of an intelligence report to be accurate. The trick of a good commander is to isolate the 5%."
That 5% maybe missing in the Bush healthcare plan. It requires senior citizens to enroll in HMOs. The problem- HMOs aren't available in many rural states, such as, Iowa. Medicare currently does not cover any outpatient prescription drug costs for its 41 million enrollees. Right now 4 in 10 seniors have no drug coverage. The number of HMOs willing to insure seniors has dropped from 346 to 153, and continues to drop.
The primary coalition necessary for going to war is to have the backing of the American people. That support comes before a unified front comprised of various nations.
More than 40 states have budget shortfalls totalling $70 billion. "States are facing a perfect storm with deteriorating tax bases, an explosion of health care costs, coupled with a virtual collapse of capital gains tax revenues and corporate profit taxes," said Raymond Scheppach, executive director of the National Governors Association.
This is the first January in 30 years that there hasn't been an IPO.
Durable goods in December rose 0.2%. Economists had predicted an increase of 0.9%.
The FTSE is at a 7 1/2 year low.
The Fed will not change rates today.
The German economics minister lowered his forecast for growth in 2003 to 1%.
AT&T wireless to cut capital spending by 40%.
Nikkei at an 11 week low.
Consumer confidence fell two points to 79, a very weak showing.
Earthlink to cut 25% of its workers.
Apple cuts Power Mac prices.
White House Budget Director Mitchell Daniels said the deficits for 2003 and 2004 would excced $300 billion. In July a deficit of $109 billion and $48 billion in 2004 had been projected. Daniels said the White House will no longer provide 10 year budget projections. Why? Daniels said "these numbers are meaningless. There never was a $5.6 trillion surplus; not even close." In other words, what comes out of the White House budget office is a figment of their own imagination. Imagine this!!!!!!
General MacArthur: "Expect only 5% of an intelligence report to be accurate. The trick of a good commander is to isolate the 5%."
That 5% maybe missing in the Bush healthcare plan. It requires senior citizens to enroll in HMOs. The problem- HMOs aren't available in many rural states, such as, Iowa. Medicare currently does not cover any outpatient prescription drug costs for its 41 million enrollees. Right now 4 in 10 seniors have no drug coverage. The number of HMOs willing to insure seniors has dropped from 346 to 153, and continues to drop.
The primary coalition necessary for going to war is to have the backing of the American people. That support comes before a unified front comprised of various nations.
More than 40 states have budget shortfalls totalling $70 billion. "States are facing a perfect storm with deteriorating tax bases, an explosion of health care costs, coupled with a virtual collapse of capital gains tax revenues and corporate profit taxes," said Raymond Scheppach, executive director of the National Governors Association.
This is the first January in 30 years that there hasn't been an IPO.
Durable goods in December rose 0.2%. Economists had predicted an increase of 0.9%.
The FTSE is at a 7 1/2 year low.
The Fed will not change rates today.
The German economics minister lowered his forecast for growth in 2003 to 1%.
AT&T wireless to cut capital spending by 40%.
Nikkei at an 11 week low.
Consumer confidence fell two points to 79, a very weak showing.
Earthlink to cut 25% of its workers.
Apple cuts Power Mac prices.
White House Budget Director Mitchell Daniels said the deficits for 2003 and 2004 would excced $300 billion. In July a deficit of $109 billion and $48 billion in 2004 had been projected. Daniels said the White House will no longer provide 10 year budget projections. Why? Daniels said "these numbers are meaningless. There never was a $5.6 trillion surplus; not even close." In other words, what comes out of the White House budget office is a figment of their own imagination. Imagine this!!!!!!
Tuesday, January 28, 2003
1/28/03 "Trust Is A Crucial Commodity"
These words were spoken by Colin Powell on Sunday before an international gathering of leaders in Davos, Switzerland. He might have included sound judgment and street smarts. No one seriously doubts that the U.S will release intelligence data on Iraqi weapons concealment and will show the direct link of Iraq to al Qaeda. Whether it's revealed today or next week is irrelevant. What isn't irrelevant is tonight's State of the Union address. There will be soaring rhetoric reminiscent of Churchill, Lincoln, Truman, and the Scriptures. Memorable words don't deliver results. Departments like Homeland Security can be initiated but the lack of infrastructure undermines success. In other words, there might have been four dress rehearsals for this speech and great preparation but there is a big gap between the lip and the cup, as it were. What does axis of evil mean? Every time I hear it spoken I cringe. Why? Little progress has happened but lots of talk. Hopefully there will be tangible improvements coming our way.
Merrill Lynch's chief strategist said technology shares should remain "significantly underweighted" due to evidence that capital spending expectations may be too optimistic.
The Dow closed below 8000 for the first time since Oct. 14.
Freddie Mac earnings below expectations.
Surveys show 4 out of 5 Europeans think the quality of healthcare stagnated or declined over the past decade.
Cross border pharmacies are the rage. There are at least 80 Canadian companies in the business. Simply put, Canada regulates drug prices. What the market will bear dictates prices in the U.S.
Pfizer Chairman and CEO McKinnell: "with a differing set of incentives the system can produce better outcomes at significantly lower costs." I don't see anyone stopping the drug companies from doing that- with the possible exception of greed.
2002 home sales rose 5% to a record 5.56 million homes.
Fujitsu cuts forecast.
These words were spoken by Colin Powell on Sunday before an international gathering of leaders in Davos, Switzerland. He might have included sound judgment and street smarts. No one seriously doubts that the U.S will release intelligence data on Iraqi weapons concealment and will show the direct link of Iraq to al Qaeda. Whether it's revealed today or next week is irrelevant. What isn't irrelevant is tonight's State of the Union address. There will be soaring rhetoric reminiscent of Churchill, Lincoln, Truman, and the Scriptures. Memorable words don't deliver results. Departments like Homeland Security can be initiated but the lack of infrastructure undermines success. In other words, there might have been four dress rehearsals for this speech and great preparation but there is a big gap between the lip and the cup, as it were. What does axis of evil mean? Every time I hear it spoken I cringe. Why? Little progress has happened but lots of talk. Hopefully there will be tangible improvements coming our way.
Merrill Lynch's chief strategist said technology shares should remain "significantly underweighted" due to evidence that capital spending expectations may be too optimistic.
The Dow closed below 8000 for the first time since Oct. 14.
Freddie Mac earnings below expectations.
Surveys show 4 out of 5 Europeans think the quality of healthcare stagnated or declined over the past decade.
Cross border pharmacies are the rage. There are at least 80 Canadian companies in the business. Simply put, Canada regulates drug prices. What the market will bear dictates prices in the U.S.
Pfizer Chairman and CEO McKinnell: "with a differing set of incentives the system can produce better outcomes at significantly lower costs." I don't see anyone stopping the drug companies from doing that- with the possible exception of greed.
2002 home sales rose 5% to a record 5.56 million homes.
Fujitsu cuts forecast.
Monday, January 27, 2003
1/27/03 "There's A Sausage Machine On Capitol Hill"
Before I get into the meat of this morning's blog, I want to make a sincere apology. It appears that my daily musings are making many of my readers depressed. That certainly is not my intention. In fact, I have always believed knowing the facts is uplifting and a great way to start the day- a little like the breakfast of champions. Now I could change the recipe, and dilute the truth, but then you wouldn't respect my independent thinking. So let's start fresh today. I will not say one word about unemployment, consumer sentiment, or economic malaise.
White House chief of staff Andrew Card: "There's a sausage machine on Capitol Hill. We gave the sausage machine all the right ingredients, they have to churn, and I'm confident that when they turn that sausage out, it'll be the right kind of sausage for America." Will it be vegetarian sausage or organic? I, for one, am always interested in creative recipes. Maybe Andrew Card could be a guest on the Food Network.
Martha Stewart: "I'm real lucky, because I am able to sort of compartmentalize. I can be concerned on one hand, and be productive on the other hand...I can still sleep." Maybe her nickname should be multi-task.
The drought sweeping the West is the worst in more than a century. Some scientists say it rivals the meanest dry spells of the past 1400 years! In some places for the past year and a half there hasn't been enough rain even to measure.
70% of those polled believe a war with Iraq will hurt the U.S. economy. Maybe a creative stimulus plan is not to go to war.
It is estimated that each year states are losing at least $12 billion in taxes on e-commerce and catalog purchases on the internet.
European stocks are at their lowest level in about 6 years. The FTSE is below 3500.
Gold is at $372 and 30% higher than a year ago.
The Euro is at $1.09 vs the dollar.
Crude oil is trading at $33.50 per barrel.
Microsoft's Gates says he does not expect a big pick-up in tech spending over the next 2 or 3 years.
Blix to say Iraq failed to fully comply with the UN resolution. What a revelation!
The Packard Foundation provided $616 million in grants in 2000. This year the expectation is for $200 million.
Ellison says Oracle's stock is undervalued. If so, why isn't he out there buying the shares in the marketplace? Maybe he should talk less, and spend more time trying to build revenue.
Before I get into the meat of this morning's blog, I want to make a sincere apology. It appears that my daily musings are making many of my readers depressed. That certainly is not my intention. In fact, I have always believed knowing the facts is uplifting and a great way to start the day- a little like the breakfast of champions. Now I could change the recipe, and dilute the truth, but then you wouldn't respect my independent thinking. So let's start fresh today. I will not say one word about unemployment, consumer sentiment, or economic malaise.
White House chief of staff Andrew Card: "There's a sausage machine on Capitol Hill. We gave the sausage machine all the right ingredients, they have to churn, and I'm confident that when they turn that sausage out, it'll be the right kind of sausage for America." Will it be vegetarian sausage or organic? I, for one, am always interested in creative recipes. Maybe Andrew Card could be a guest on the Food Network.
Martha Stewart: "I'm real lucky, because I am able to sort of compartmentalize. I can be concerned on one hand, and be productive on the other hand...I can still sleep." Maybe her nickname should be multi-task.
The drought sweeping the West is the worst in more than a century. Some scientists say it rivals the meanest dry spells of the past 1400 years! In some places for the past year and a half there hasn't been enough rain even to measure.
70% of those polled believe a war with Iraq will hurt the U.S. economy. Maybe a creative stimulus plan is not to go to war.
It is estimated that each year states are losing at least $12 billion in taxes on e-commerce and catalog purchases on the internet.
European stocks are at their lowest level in about 6 years. The FTSE is below 3500.
Gold is at $372 and 30% higher than a year ago.
The Euro is at $1.09 vs the dollar.
Crude oil is trading at $33.50 per barrel.
Microsoft's Gates says he does not expect a big pick-up in tech spending over the next 2 or 3 years.
Blix to say Iraq failed to fully comply with the UN resolution. What a revelation!
The Packard Foundation provided $616 million in grants in 2000. This year the expectation is for $200 million.
Ellison says Oracle's stock is undervalued. If so, why isn't he out there buying the shares in the marketplace? Maybe he should talk less, and spend more time trying to build revenue.
Sunday, January 26, 2003
1/26/03 What The State Of The Union Speech Won't Say
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
1/26/03 What The State Of The Union Speech Won't Say
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
I'm referring to what Americans have permitted or currently are permitting to go on in our lives. I suggest we assume the responsibility for wrongdoing and do something about creating change.
1983 was a very bad year. At that time Congress increased the employment tax and increased the retirement age in the future. We voted for these people, and we pay every day for it. Do you realize that the employment taxes we pay provide our eligibility for health, disability, retirement, and survivor benefits and that these benefits were tax-free until 1983? I strongly suggest we make enough noise to bring them into tax-free territory once again. Why should so many retirees who saved for retirement pay income taxes on the benefits that come from their employment taxes? This is real double taxation. This hits you where it hurts-below the belt. I bet this won't be in the state of the union speech.
Bush is proposing a 2% Federal pay raise. You are talking about millions of workers(I use that term gingerly) who, in all likelihood, couldn't compete in the private sector. We must never forget the government is the employer of last resort. I have a strong feeling that Bush will not be telling the millions of jobless Americans about his plan to raise Federal pay.
Medicare is actuarilly bankrupt. When discussing the potential overhaul for the healthcare system, I bet no mention will be made of Medicare's finances.
Rising malpractice insurance rates are causing physicians to leave clinical practice and/or to stop performing high-risk procedures. Meanwhile, payments to physicians from private insurers and federal programs are declining. Do you think these problems will be outlined Tuesday evening?
General Amir Al Saadi, a top Iraqi advisor, says he believes war is inevitable. Bush says he is running out of patience. The American public state that the fear of war is the main problem facing the U.S. today. Given all the rhetoric and listening to American's fears, what are the chances that a non-warlike discussion will take place Tuesday evening? It is up to our leaders to listen to the constituents, and bring whatever pressure is necessary to avoid Americans losing their lives in battle. We must ask ourselves. Is Saddam capable of being another Hittler? The latter had no peer in the evil department. He was the evil axis. With $6 billion in hidden assets, Saddam has the resources to retire. The world should show provide the one-way ticket to palookaville, but without the loss of life.
The current cold spell means that many Americans will see a doubling of their home heating bills. With the current state of the economy, few can afford the increases they face. What short-term program will be created to offset this problem? This won't be discussed on Tuesday.
The internet is global. For many, it is the most cost and time effective way to communicate. The companies providing the infrastructure for the internet have a responsibility to eliminate security flaws. They are receiving fees for their service, and consequently, users should get a reliable service. Once again, there was a security flaw in Microsoft's database management program, SQL Server. This flaw enabled a computer worm or virus to block traffic on the global internet this weekend, and even jammed ATMs. It's not a matter that Microsoft has $40 billion in the bank and has the resources to fix their repeated security flaws. The fact is the company responds to problems not before the problems exist. When will corporate managements learn to stand behind their products? This isn't about corporate governance? This is about doing what's right. Naturally, this won't be in the president's speech either.
Vendors have real trouble making ends meet. Large corporations often take advantage of the small guy. Take for example KMart. Their Project Slow It Down delayed payments to vendors in late 2001 in order to avoid a liquidity crisis. That's unethical, immoral, and pure bullshit. Kmart does not deserve to have the public shop in their stores. It's not just KMart. How long does it take for vendors to be paid by our government? What's being done about it? Do you think the president will discuss this Tuesday evening?
I have only mentioned a few omissions which will not be heard in the state of the union address. The problems run deep. I'm not a cheerleader. We can only solve problems if they are addressed.
Saturday, January 25, 2003
1/25/03 The Stock Market Headlines
Do you really believe the stock market is falling because investors fear a protracted war with Iraq or a possible nuclear confrontation with N. Korea? I mentioned weeks ago that I do not believe we will go to war with Iraq and that the problems with N. Korea would be settled thru discussions. If I am wrong about Iraq and there is a war, it will be short-lived. Helping to rebuild the Iraq infrastructure will take some time. From the market's standpoint Iraq and N. Korea are non-events. They are being used as headline diversions. The real story is the economy has entered a downward spiral and is picking up speed, and the consumer, business, and the government can't stop it. Time has run out.
How did we reach this point? It's pretty simple. We squandered our cash flow surpluses, overspent, didn't save, created excess capacity in just about every area, and then failed to see foreign competition wiping out pricing power. We are left with excess capacity, almost no pricing power, on-going surpluses of goods and services, too little demand, too much debt, and too little cash flow. The crack in the armor can clearly be witnessed in the falling dollar, which has dropped for 9 consecutive days to a 3 year low vs the Euro and a 4 year low vs the Swiss franc. The dollar's drop is picking up speed and reflects the weakening economic status of the U.S.
Over the lifespan of this 3 year bear market about $7 trillion has been lost. For a $10 trillion economy that's a major hit. Before this bear market ends, trillions more will be lost. It's a painful process, and only the strong-willed shall bounce back. The tough times have only just begun in earnest. You can listen to all the state of the union messages you want. You can salute the flag. All that talk and all that devotion to country will not solve our problems and will not return us to positive cash flow. A perfect example is the Pension Benefit Guaranty Corp, which was founded in 1974. It insures pensions of 44 million Americans, and in recent years had an $8 billion surplus. Because of numerous bankruptcies, that surplus has turned into a $1-2 billion deficit. Companies only pay $19 per person covered each year, or more if a pension fund is underfunded. I have pointed out how many companies have underfunded pension funds. Given the aforementioned information, do you believe guaranteed retirement benefits are at risk? I do.
The FTSE is at a 7 year low.
The IMF oks a $3 billion loan for Argentina.
Home Depot hit a 5 year low.
Congratulations to Serena and Venus Williams for putting on the best women's tennis match ever. They both are remarkable winners. We could use more like them.
Just a final word. Let me be very clear. I am an incredible optimist and not a doomsdayer. On the other hand, it would be stupid for me to put my head in the sand. Some of you were annoyed that I called for a long bear market in June, 2000. Maybe some of today's blog rubs you the wrong way. That's not my problem. I call it the way I see it- without emotion. It's just business for me.
Do you really believe the stock market is falling because investors fear a protracted war with Iraq or a possible nuclear confrontation with N. Korea? I mentioned weeks ago that I do not believe we will go to war with Iraq and that the problems with N. Korea would be settled thru discussions. If I am wrong about Iraq and there is a war, it will be short-lived. Helping to rebuild the Iraq infrastructure will take some time. From the market's standpoint Iraq and N. Korea are non-events. They are being used as headline diversions. The real story is the economy has entered a downward spiral and is picking up speed, and the consumer, business, and the government can't stop it. Time has run out.
How did we reach this point? It's pretty simple. We squandered our cash flow surpluses, overspent, didn't save, created excess capacity in just about every area, and then failed to see foreign competition wiping out pricing power. We are left with excess capacity, almost no pricing power, on-going surpluses of goods and services, too little demand, too much debt, and too little cash flow. The crack in the armor can clearly be witnessed in the falling dollar, which has dropped for 9 consecutive days to a 3 year low vs the Euro and a 4 year low vs the Swiss franc. The dollar's drop is picking up speed and reflects the weakening economic status of the U.S.
Over the lifespan of this 3 year bear market about $7 trillion has been lost. For a $10 trillion economy that's a major hit. Before this bear market ends, trillions more will be lost. It's a painful process, and only the strong-willed shall bounce back. The tough times have only just begun in earnest. You can listen to all the state of the union messages you want. You can salute the flag. All that talk and all that devotion to country will not solve our problems and will not return us to positive cash flow. A perfect example is the Pension Benefit Guaranty Corp, which was founded in 1974. It insures pensions of 44 million Americans, and in recent years had an $8 billion surplus. Because of numerous bankruptcies, that surplus has turned into a $1-2 billion deficit. Companies only pay $19 per person covered each year, or more if a pension fund is underfunded. I have pointed out how many companies have underfunded pension funds. Given the aforementioned information, do you believe guaranteed retirement benefits are at risk? I do.
The FTSE is at a 7 year low.
The IMF oks a $3 billion loan for Argentina.
Home Depot hit a 5 year low.
Congratulations to Serena and Venus Williams for putting on the best women's tennis match ever. They both are remarkable winners. We could use more like them.
Just a final word. Let me be very clear. I am an incredible optimist and not a doomsdayer. On the other hand, it would be stupid for me to put my head in the sand. Some of you were annoyed that I called for a long bear market in June, 2000. Maybe some of today's blog rubs you the wrong way. That's not my problem. I call it the way I see it- without emotion. It's just business for me.
Friday, January 24, 2003
1/24/03 Litigation Will Not Halt The Competition
A few months ago I wrote about China eating Cisco's lunch in the low-cost networking router business. I mentioned that life would never be the same for Cisco. Yesterday Cisco sued Huawei Technologies claiming the latter had copied intellectual property in their manufacturing of the low-cost routers. The lawsuit will not stop the competition. The marketplace wants lower prices, and Cisco hasn't provided them. We have seen Dell come to dominate in the PC and laptop area. We witness the growth of Linux in the low-cost server market. China is not a looming force. They are a force now and growing every day. Cisco has reason to be concerned. Their days of leadership are waning. Their pricing power is dead in the water.
Gold reached a 6 year high of $367.
AT&T's stock plunged over 20% after a disappointing 2003 forecast.
The FTSE closed down for the 9th consecutive day, and had the lowest close since 1995. UK's economy only grew 1.7% last year, the slowest since 1992.
The U.S. will give the inspectors more time to inspect.
The unemployment rate in N.Y.C. is 8.4%, the highest since 1998.
Bush's proposal on Medicare will link drug benefits to joining HMOs.
Bell South's quarterly profits fell 25%.
Caterpillar said their 2003 earnings would drop 5%.
McDonald's reported their first ever loss, and announced the closing of 719 restaurants worldwide.
As we move towards next week, we can look forward to the report from the UN inspectors on Iraq and then the President's state of the union message. Both reports will probably hold few surprises. The market, on the other hand, is full of surprises. Often I have said that the market accomodates the fewest number of people at any one time. To be one of the few means being prepared and willing to be extraordinarily nimble. Just like life throws us curves, so does the market. The curves can be wicked- more lethal than Barry Zito's breaking pitch. You will often miss a pitch, but when the count gets full, that's the time to get on base. We don't need homers. We just need to score to ring the register. Be consistent and come to play hard each day.
A few months ago I wrote about China eating Cisco's lunch in the low-cost networking router business. I mentioned that life would never be the same for Cisco. Yesterday Cisco sued Huawei Technologies claiming the latter had copied intellectual property in their manufacturing of the low-cost routers. The lawsuit will not stop the competition. The marketplace wants lower prices, and Cisco hasn't provided them. We have seen Dell come to dominate in the PC and laptop area. We witness the growth of Linux in the low-cost server market. China is not a looming force. They are a force now and growing every day. Cisco has reason to be concerned. Their days of leadership are waning. Their pricing power is dead in the water.
Gold reached a 6 year high of $367.
AT&T's stock plunged over 20% after a disappointing 2003 forecast.
The FTSE closed down for the 9th consecutive day, and had the lowest close since 1995. UK's economy only grew 1.7% last year, the slowest since 1992.
The U.S. will give the inspectors more time to inspect.
The unemployment rate in N.Y.C. is 8.4%, the highest since 1998.
Bush's proposal on Medicare will link drug benefits to joining HMOs.
Bell South's quarterly profits fell 25%.
Caterpillar said their 2003 earnings would drop 5%.
McDonald's reported their first ever loss, and announced the closing of 719 restaurants worldwide.
As we move towards next week, we can look forward to the report from the UN inspectors on Iraq and then the President's state of the union message. Both reports will probably hold few surprises. The market, on the other hand, is full of surprises. Often I have said that the market accomodates the fewest number of people at any one time. To be one of the few means being prepared and willing to be extraordinarily nimble. Just like life throws us curves, so does the market. The curves can be wicked- more lethal than Barry Zito's breaking pitch. You will often miss a pitch, but when the count gets full, that's the time to get on base. We don't need homers. We just need to score to ring the register. Be consistent and come to play hard each day.
Thursday, January 23, 2003
1/23/03 The Dow And The S&P 500 Close Below The Dec. 31, 2002 Levels
With the exception of a small gain for the Nasdaq, all the January market advancements have evaporated. As discussed often in this blog, the handwriting has been on the wall. The lonely road often has greater visibility while it can get pretty murky in a crowd. The consumer has been telling a story. About half of the consumers feel Bush's stimulus package will not prove of much benefit; the majority are negative on the current economic conditions; and overall consumer sentiment is at a 9 year low. With the consumer accounting for at least two thirds of our GDP, it is obvious that profit growth will not be forthcoming. Since the stock market follows profit growth or the lack of it, we remain in a bear market. Rallies take place frequently in bear markets, and they are opportunities to sell. These facts are for everyone to see, and not just for me. I may have more direct investing experience, but the rules are the same for me as they are for you. We need to concentrate intensely on the facts, and to think rationally on a consistent basis. Independent and dedicated thinking can prove intellectually and monetarily rewarding. It's available to all of us. It's a matter of how badly you want to succeed.
Once again, Kodak has announced layoffs. This time it is 3% of the workforce.
While the FTSE continues to decline, the Nikkei is starting to surprise on the upside. Will it be sustainable? It hasn't been up to this point.
Nokia is forecasting lower first quarter sales. They are the industry leader, and that should tell you something. Remember WalMart slowing in August and the collapse in overall holiday sales for the retail industry.
Non- performing bank loans continue to rise, and they are at a record level.
With the exception of a small gain for the Nasdaq, all the January market advancements have evaporated. As discussed often in this blog, the handwriting has been on the wall. The lonely road often has greater visibility while it can get pretty murky in a crowd. The consumer has been telling a story. About half of the consumers feel Bush's stimulus package will not prove of much benefit; the majority are negative on the current economic conditions; and overall consumer sentiment is at a 9 year low. With the consumer accounting for at least two thirds of our GDP, it is obvious that profit growth will not be forthcoming. Since the stock market follows profit growth or the lack of it, we remain in a bear market. Rallies take place frequently in bear markets, and they are opportunities to sell. These facts are for everyone to see, and not just for me. I may have more direct investing experience, but the rules are the same for me as they are for you. We need to concentrate intensely on the facts, and to think rationally on a consistent basis. Independent and dedicated thinking can prove intellectually and monetarily rewarding. It's available to all of us. It's a matter of how badly you want to succeed.
Once again, Kodak has announced layoffs. This time it is 3% of the workforce.
While the FTSE continues to decline, the Nikkei is starting to surprise on the upside. Will it be sustainable? It hasn't been up to this point.
Nokia is forecasting lower first quarter sales. They are the industry leader, and that should tell you something. Remember WalMart slowing in August and the collapse in overall holiday sales for the retail industry.
Non- performing bank loans continue to rise, and they are at a record level.
Wednesday, January 22, 2003
1/22/03 Humility And The Stock Market
Several times I have written that one cannot expect to buy at the low and sell at the top. In fact, should that occur in a particular stock, it should be considered luck and not brains. To be a successful investor one should expect to be humbled on a regular basis. My readers have commented that often I come across as brash, opinionated, and full of myself. I think I probably am all of those descriptions at one time or another; however, beneath the surface, I have a tremendous respect for the marketplace. I know I may be right 99 consecutive times, but on the 100th I will look really stupid. The market might attempt to take my big head off. That should be looked as a positive. We must learn from our mistakes, not make the same mistake twice, and cut our losses short. It is very costly to be stubborn in the face of a losing trade. Don't take it personally. No one is out to get you. Only you can do yourself in. You make the ultimate decision to buy, sell, or hold. No one else. Depend on your own rational thinking, and do not fall in love with a stock. It's only a piece of corporate ownership and not a heart and soul.
$130 billion went into bond funds in 2002. $10 billion came out of stock funds last year, and it was the first year of withdrawals since 1988. $5.5 billion were withdrawn in December.
Kodak has lowered its outlook.
Lucent recorded its 11th straight quarterly loss. That takes a concerted effort to pull off.
Hispanics are now the number one minority in the U.S., and will become the majority in Phoenix in 2007.
Insurance premiums from Blue Cross Blue Shield of Michigan will rise 23% in March.
Bush's budget will be released in the next few weeks, and it will not give the states added assistance to pay for Medicaid health insurance for the poor. Most states have cut Medicaid coverage because increased enrollment and rising healthcare costs have made the program unaffordable.
Microsoft to buy web-conferencing firm, PlaceWare of Mountain View.
Among companies in Georgia with revenues of $10 million or more, 25% are likely to move some manufacturing operations out of the U.S.
Due to the drought, water shortages can be expected in coming months in Montana, Colorado, and Utah, and possibly in Arizona and Nevada. In addition, lack of moisture in the midwest has created low supplies of grain.
Several times I have written that one cannot expect to buy at the low and sell at the top. In fact, should that occur in a particular stock, it should be considered luck and not brains. To be a successful investor one should expect to be humbled on a regular basis. My readers have commented that often I come across as brash, opinionated, and full of myself. I think I probably am all of those descriptions at one time or another; however, beneath the surface, I have a tremendous respect for the marketplace. I know I may be right 99 consecutive times, but on the 100th I will look really stupid. The market might attempt to take my big head off. That should be looked as a positive. We must learn from our mistakes, not make the same mistake twice, and cut our losses short. It is very costly to be stubborn in the face of a losing trade. Don't take it personally. No one is out to get you. Only you can do yourself in. You make the ultimate decision to buy, sell, or hold. No one else. Depend on your own rational thinking, and do not fall in love with a stock. It's only a piece of corporate ownership and not a heart and soul.
$130 billion went into bond funds in 2002. $10 billion came out of stock funds last year, and it was the first year of withdrawals since 1988. $5.5 billion were withdrawn in December.
Kodak has lowered its outlook.
Lucent recorded its 11th straight quarterly loss. That takes a concerted effort to pull off.
Hispanics are now the number one minority in the U.S., and will become the majority in Phoenix in 2007.
Insurance premiums from Blue Cross Blue Shield of Michigan will rise 23% in March.
Bush's budget will be released in the next few weeks, and it will not give the states added assistance to pay for Medicaid health insurance for the poor. Most states have cut Medicaid coverage because increased enrollment and rising healthcare costs have made the program unaffordable.
Microsoft to buy web-conferencing firm, PlaceWare of Mountain View.
Among companies in Georgia with revenues of $10 million or more, 25% are likely to move some manufacturing operations out of the U.S.
Due to the drought, water shortages can be expected in coming months in Montana, Colorado, and Utah, and possibly in Arizona and Nevada. In addition, lack of moisture in the midwest has created low supplies of grain.
Tuesday, January 21, 2003
1/21/03 Business Overcapacity And Unemployment
Kurt Barnard, president of Barnard's Retail Consulting Group: "there is really no government policy that will do much good in dealing with business overcapacity."
A year ago there were 1 million people who had been unemployed 26 weeks or longer. Now there are 1 3/4 million. Replacement jobs are increasingly difficult to find. We have Ph.Ds walking into career centers.
Ed Peters, chief investment officer of PanAgora Investment Fund in Boston: "we overinvested not only in technology but also in people and created more jobs than we actually needed."
Most states require a balanced budget. Governors are reluctantly turning to tax increases to offset deficits. An example is Idaho Governor Kempthorne. In his first term he cut taxes 48 times. Now faced with a 10% budget gap he is calling for an increase in state cigarette and sales taxes. He said "I have done something that is absolutely not part of my fiber but I'm not going to dismantle this state."
More IT jobs headed overseas. In 2000 only 27,000 jobs were outsourced. Now we're on the way to 100,000.
Unemployment taxes are going up. Why? More people are drawing unemployment benefits and they're on those benefits for a long period of time. As one manager put it, it's like auto insurance- the more car accidents you have, the higher the rates are going to be.
With the euro rising against the dollar, there is more pressure on European earnings. Philip Chitty, a senior European economist at ABN Amro Bank, figures "that a 10% depreciation of the dollar against the euro will lower projected 2003 euro-area growth by 0.6 percentage point to 0.8%."
Here is a statement which reflects the Fed's clear thinking. It comes from Federal Reserve Bank of Richmond President Alfred Broaddus: "For the first time in a while I think the chances that actual growth will exceed the consensus forecast somewhat are about equal to the chances that it will come in below it." Doesn't it give you a warm fuzzy feeling knowing that Broaddus is employed and that you have a hand in paying his salary?
Kurt Barnard, president of Barnard's Retail Consulting Group: "there is really no government policy that will do much good in dealing with business overcapacity."
A year ago there were 1 million people who had been unemployed 26 weeks or longer. Now there are 1 3/4 million. Replacement jobs are increasingly difficult to find. We have Ph.Ds walking into career centers.
Ed Peters, chief investment officer of PanAgora Investment Fund in Boston: "we overinvested not only in technology but also in people and created more jobs than we actually needed."
Most states require a balanced budget. Governors are reluctantly turning to tax increases to offset deficits. An example is Idaho Governor Kempthorne. In his first term he cut taxes 48 times. Now faced with a 10% budget gap he is calling for an increase in state cigarette and sales taxes. He said "I have done something that is absolutely not part of my fiber but I'm not going to dismantle this state."
More IT jobs headed overseas. In 2000 only 27,000 jobs were outsourced. Now we're on the way to 100,000.
Unemployment taxes are going up. Why? More people are drawing unemployment benefits and they're on those benefits for a long period of time. As one manager put it, it's like auto insurance- the more car accidents you have, the higher the rates are going to be.
With the euro rising against the dollar, there is more pressure on European earnings. Philip Chitty, a senior European economist at ABN Amro Bank, figures "that a 10% depreciation of the dollar against the euro will lower projected 2003 euro-area growth by 0.6 percentage point to 0.8%."
Here is a statement which reflects the Fed's clear thinking. It comes from Federal Reserve Bank of Richmond President Alfred Broaddus: "For the first time in a while I think the chances that actual growth will exceed the consensus forecast somewhat are about equal to the chances that it will come in below it." Doesn't it give you a warm fuzzy feeling knowing that Broaddus is employed and that you have a hand in paying his salary?
Monday, January 20, 2003
1/20/03 We Shall Overcome, Someday
Why doesn't someone write a book entitled race relations for dummies. The author could give a signed copy to the staff at Bob Jones University. Didn't Bush campaign in South Carolina at that university? So much for discrimination at the college entrance level.
The consumer expectations index, which gauges attitudes about the 12-month outlook, fell to 75.2 from 80.8. That should tell you where retail sales are headed- in the toilet.
The Venezuelan oil strike is in its 50th day. Income from oil exports accounts for 50% of the Venezuelan government's income.
New Mexico is choking on Medicaid costs. They're not alone.
Sellers outpaced buyers in 2002 insider trading. Wouldn't you be a seller too if your company's results were disappointing and getting worse? You don't have to run a company to be a seller.
The euro hit a 3 1/2 year high vs sterling.
You want to get depressed on your vacation day? Independent research company Datamonitor reports, that its study revealed, more than one in five depressed patients attempt suicide and a further 47% think about killing themselves before their condition is diagnosed. The stigma of depression has stopped patients from seeking therapy. This is truly a tragic trend.
Why doesn't someone write a book entitled race relations for dummies. The author could give a signed copy to the staff at Bob Jones University. Didn't Bush campaign in South Carolina at that university? So much for discrimination at the college entrance level.
The consumer expectations index, which gauges attitudes about the 12-month outlook, fell to 75.2 from 80.8. That should tell you where retail sales are headed- in the toilet.
The Venezuelan oil strike is in its 50th day. Income from oil exports accounts for 50% of the Venezuelan government's income.
New Mexico is choking on Medicaid costs. They're not alone.
Sellers outpaced buyers in 2002 insider trading. Wouldn't you be a seller too if your company's results were disappointing and getting worse? You don't have to run a company to be a seller.
The euro hit a 3 1/2 year high vs sterling.
You want to get depressed on your vacation day? Independent research company Datamonitor reports, that its study revealed, more than one in five depressed patients attempt suicide and a further 47% think about killing themselves before their condition is diagnosed. The stigma of depression has stopped patients from seeking therapy. This is truly a tragic trend.
Sunday, January 19, 2003
1/19/03 Is The Big D On The Doorstep?
Barron's reports that the government, corporations, and households are saddled with $31 trillion of debt. That's an overwhelming amount for a $10 trillion economy. Now you know why I increasingly worry about the big D arriving on our doorstep. It seems to be slowly creeping up on us.
The California state jobless rate is at a 5 year high of 6.6%.
The Mexican peso is at a 4 year low vs the dollar at 10.61 per dollar. Mexico sends 85% of its exports to the U.S.
Federal securities regulators have told Martha Stewart they've decided to file civil insider-trading charges against her.
Barron's reports that the government, corporations, and households are saddled with $31 trillion of debt. That's an overwhelming amount for a $10 trillion economy. Now you know why I increasingly worry about the big D arriving on our doorstep. It seems to be slowly creeping up on us.
The California state jobless rate is at a 5 year high of 6.6%.
The Mexican peso is at a 4 year low vs the dollar at 10.61 per dollar. Mexico sends 85% of its exports to the U.S.
Federal securities regulators have told Martha Stewart they've decided to file civil insider-trading charges against her.
Saturday, January 18, 2003
1/18/03 WalMart and Microsoft
Back in August, WalMart first warned that their same-store sales were slowing down to the 4% level. They stayed there thru November and declined again in December. I wrote about the significance of WalMart's warning, and basically pointed out that, if the best retail company in the world was warning about slowing sales, then how about every other company and particularly their competitors. It wasn't long before we saw the retail carnage, but meanwhile, Wall Street had for the most part ignored WalMart's words. Then, after the close on Thursday, Microsoft's CFO warned of the difficult economic environment and lowered the sales and earnings projections for the company's 2003 fiscal year. Like WalMart, Microsoft is the leader in the industry. If they are slowing down, watch out. This time Wall Street did listen and Microsoft dropped close to $3 per share and the Nasdaq over 3%. The problem is still two-fold. With a slowing environment for Microsoft, the P/E ratios need to come down for the tech stocks, and the earnings projections for the Nasdaq 100 need to be reduced further for 2003. In other words, the result will be lower stock prices. Rallies should be viewed as selling opportunities. Hopefully, you have been listening and lightening up your least favorable positions.
Factory production fell 0.2% in December with usable capacity resting at 75.4%. The U.S. trade gap in November jumped to $40 billion. Most importantly, consumer sentiment in January fell to 83.7 from 86.7 in December. Industrial production in 2002 declined for the second consecutive year, and was the first back to back decline since 1974-1975.
Home Depot to miss earnings targets for 2003.
The American Legislative Council says state deficits for 2003 could reach $90 billion. That sounds low to me.
As people have lost their jobs in the private sector, local governments have hired 429,000, states 115,000, and the Federal government 42,000. Where are they getting the money to pay these people? From taxes you are paying. There is something very wrong with this picture. Only the voters can change it.
Back in August, WalMart first warned that their same-store sales were slowing down to the 4% level. They stayed there thru November and declined again in December. I wrote about the significance of WalMart's warning, and basically pointed out that, if the best retail company in the world was warning about slowing sales, then how about every other company and particularly their competitors. It wasn't long before we saw the retail carnage, but meanwhile, Wall Street had for the most part ignored WalMart's words. Then, after the close on Thursday, Microsoft's CFO warned of the difficult economic environment and lowered the sales and earnings projections for the company's 2003 fiscal year. Like WalMart, Microsoft is the leader in the industry. If they are slowing down, watch out. This time Wall Street did listen and Microsoft dropped close to $3 per share and the Nasdaq over 3%. The problem is still two-fold. With a slowing environment for Microsoft, the P/E ratios need to come down for the tech stocks, and the earnings projections for the Nasdaq 100 need to be reduced further for 2003. In other words, the result will be lower stock prices. Rallies should be viewed as selling opportunities. Hopefully, you have been listening and lightening up your least favorable positions.
Factory production fell 0.2% in December with usable capacity resting at 75.4%. The U.S. trade gap in November jumped to $40 billion. Most importantly, consumer sentiment in January fell to 83.7 from 86.7 in December. Industrial production in 2002 declined for the second consecutive year, and was the first back to back decline since 1974-1975.
Home Depot to miss earnings targets for 2003.
The American Legislative Council says state deficits for 2003 could reach $90 billion. That sounds low to me.
As people have lost their jobs in the private sector, local governments have hired 429,000, states 115,000, and the Federal government 42,000. Where are they getting the money to pay these people? From taxes you are paying. There is something very wrong with this picture. Only the voters can change it.
Thursday, January 16, 2003
1/17/03 Big Deficits Seen For "Foreseeable Future"
The President's budget director said that federal deficits are expected to balloon to the $200-300 billion range in the next two years, and spoke of shortfalls "for the foreseeable future" and declined to predict when surpluses might surface. In July it was estimated a surplus would appear in 2005.
Last summer the administration projected deficits of $109 billion in 2003 and $48 billion in 2004. As one can see, they really have no clue whatsoever and are just picking numbers out of an embarrassing place. When you include the trade deficit and the off-balance sheet items for social security and the like, the deficit becomes an unruly percentage of our $10 trillion economy. You will hear the administration say the deficit is only 2-3% of GDP. That's pure BS.
The chief economist for Morgan Stanley said the U.S. needs a sizeable short-term stimulus to prevent deflation.
Goldman Sachs said it believes this year's deficit will hit $300 billion and increase to $375 billion in 2004.
As long as we continue to run large deficits, the dollar will stay weak.
Federated Dep't Stores cut its 2003 forecast, shut 11 stores, and fired 1500 workers.
Microsoft guided consensus for their 2003 year to $1.90-1.93 from the prior $1.98.
Pfizer lost its Neurontin patent case.
The recent spate of layoffs is taking its toll. At 8am the wait to speak to ADP about a payroll matter was 1 1/4 hours. There were only 7 calls in front of me. Obviously there are only a couple of people manning the phones. Then a call to Costco's business center brought a 15 minute wait, and the central warehouse was out of Coca Cola, towels, and toilet paper. The order was given to a competitor. This is the new business look- poor service and low inventory. You can expect lower earnings to spring forth and disenchanted customers.
The President's budget director said that federal deficits are expected to balloon to the $200-300 billion range in the next two years, and spoke of shortfalls "for the foreseeable future" and declined to predict when surpluses might surface. In July it was estimated a surplus would appear in 2005.
Last summer the administration projected deficits of $109 billion in 2003 and $48 billion in 2004. As one can see, they really have no clue whatsoever and are just picking numbers out of an embarrassing place. When you include the trade deficit and the off-balance sheet items for social security and the like, the deficit becomes an unruly percentage of our $10 trillion economy. You will hear the administration say the deficit is only 2-3% of GDP. That's pure BS.
The chief economist for Morgan Stanley said the U.S. needs a sizeable short-term stimulus to prevent deflation.
Goldman Sachs said it believes this year's deficit will hit $300 billion and increase to $375 billion in 2004.
As long as we continue to run large deficits, the dollar will stay weak.
Federated Dep't Stores cut its 2003 forecast, shut 11 stores, and fired 1500 workers.
Microsoft guided consensus for their 2003 year to $1.90-1.93 from the prior $1.98.
Pfizer lost its Neurontin patent case.
The recent spate of layoffs is taking its toll. At 8am the wait to speak to ADP about a payroll matter was 1 1/4 hours. There were only 7 calls in front of me. Obviously there are only a couple of people manning the phones. Then a call to Costco's business center brought a 15 minute wait, and the central warehouse was out of Coca Cola, towels, and toilet paper. The order was given to a competitor. This is the new business look- poor service and low inventory. You can expect lower earnings to spring forth and disenchanted customers.
1/16/03 The Fed Sees a "Subdued and Sluggish" Economy
The latest Fed beige book states that there is no evidence that either consumer or corporate spending is picking up and that business expansion remains minimal. Companies remain cautious about hiring. Consumer confidence is at a yearlong low. These statements are quite different from the comment about the economy hitting a soft patch. The Fed is beginning to see one half of the story. They fail to touch on the possibility of a contracting economy or one marked with deflation. That will come in time. The Fed can be counted on for late arrivals to reality.
There are $2 trillion in taxable money fund assets with an average yield of 0.84%. This tells you how distrusting the public is of the stock market.
Germany's $2 trillion economy only expanded 0.2% in 2002, the slowest in 9 years. Unemployment is at a 4 1/2 year high. For the first time since a unified Germany, consumer spending declined.
The ECB will cut interest rates at their next meeting on Feb. 6th.
According to CIO Insight magazine, a survey of 300 CIOs revealed that tech spending will decline in 2003.
U.S. producer prices were flat in Dec. Prices excluding food and energy costs actually fell 0.3%.
Prime Minister Koizumi visited the Yasukuni Shrine which honors Japan's war dead. There he said "I will visit the shrine to remind me about the priceless significance of peace. The visit will make me more determined to never go to war." Maybe some of our leaders should have joined Koizumi on his Shrine visit.
There are increasing attacks in the Southern no fly zone. On Monday allied planes struck 5 sites in S. Iraq.
Airbus lowered their estimate on airplane deliveries. As I have mentioned so often. Why buy new? Pick one up at firesale prices in the Mojave airplane parking lot.
DuPont warned that 4th quarter earnings would fall short of expectations. Apple reported a loss. ADP disappointed. Best Buy cut 700 jobs. The good news- Rand McNally will come out of bankruptcy with a new owner.
The latest Fed beige book states that there is no evidence that either consumer or corporate spending is picking up and that business expansion remains minimal. Companies remain cautious about hiring. Consumer confidence is at a yearlong low. These statements are quite different from the comment about the economy hitting a soft patch. The Fed is beginning to see one half of the story. They fail to touch on the possibility of a contracting economy or one marked with deflation. That will come in time. The Fed can be counted on for late arrivals to reality.
There are $2 trillion in taxable money fund assets with an average yield of 0.84%. This tells you how distrusting the public is of the stock market.
Germany's $2 trillion economy only expanded 0.2% in 2002, the slowest in 9 years. Unemployment is at a 4 1/2 year high. For the first time since a unified Germany, consumer spending declined.
The ECB will cut interest rates at their next meeting on Feb. 6th.
According to CIO Insight magazine, a survey of 300 CIOs revealed that tech spending will decline in 2003.
U.S. producer prices were flat in Dec. Prices excluding food and energy costs actually fell 0.3%.
Prime Minister Koizumi visited the Yasukuni Shrine which honors Japan's war dead. There he said "I will visit the shrine to remind me about the priceless significance of peace. The visit will make me more determined to never go to war." Maybe some of our leaders should have joined Koizumi on his Shrine visit.
There are increasing attacks in the Southern no fly zone. On Monday allied planes struck 5 sites in S. Iraq.
Airbus lowered their estimate on airplane deliveries. As I have mentioned so often. Why buy new? Pick one up at firesale prices in the Mojave airplane parking lot.
DuPont warned that 4th quarter earnings would fall short of expectations. Apple reported a loss. ADP disappointed. Best Buy cut 700 jobs. The good news- Rand McNally will come out of bankruptcy with a new owner.
Wednesday, January 15, 2003
1/15/03 Management Is The Difference
KMart and WalMart started their businesses at the same time. Yesterday Kmart, fighting to survive, announced the closing of 336 stores and laying off 37,000 workers. WalMart recently announced an aggressive store opening schedule and plans to hire another 800,000 workers over the next 5 years. The companies are in the same business. The main difference is management. It's a winning lesson. When investing, go with the proven talent. Ignore the media hype. Stick with the results.
Georgia Pacific warns its 4th quarter earnings will be disappointing. They have been hurt by "competitive market conditions and higher manufacturing costs." They failed to mention their overladen debt structure.
The analysts raved last night about Intel's 4th quarter. Get real. The stock sells at $18 with a 2003 EPS possibility of 60 cents or 30 times earnings. This is an excellent company, no longer run by Andy Grove, in a cyclical industry and there is no way their historical or present performance comes close to a 30% growth rate. Capital spending will drop about $1 billion this year to $3.7 billion, and this reflects uncertain market conditions going forward.
In December the Pew Global Attitudes opinion survey found increasingly negative views of the U.S. in over two-thirds of the 27 countries it surveyed. Given our recent troop movements, I believe that survey would be even more negative if taken today. We need to proceed cautiously and not just with a few friends. The world is a small place. It's vital to be right. It's more important to be right at the opportune time. We should take note that Germany wants a UN vote before there is a war in Iraq.
John S. Herold Inc. reports 2002 worldwide upstream M&A deal value plunged 44% to $46 billion.
Grocery distributor Fleming Cos. cut its 4th quarter profit estimate and blamed the growing dominance of WalMart. The latter does its own distributing.
The EU paints a bleak economic picture and stated that "the reaction to the slowdown in economic growth is characterized by policy inertia and backtracking."
AllFirst Financial eliminates 1132 jobs.
The dollar falls to 118.00 yen, the Euro up to 1.06 vs the dollar, and the dollar at 1.38 Swiss francs. The dollar is in a bear market.
Talking about bear markets, on occasion opportunities arise for trading rallies. I discussed that possibility 10 days after 9/11 and then again in mid-October of last year. Trading rallies do not change the basic trend. That is a given. In my view the high point for January will turn out to be the high point for 2003. I have no idea when the bear market will end. I just make the trend my friend and act accordingly. Those that fight the trend lose their capital.
December retail sales rose an expected meager 1.2% but were flat when excluding auto sales. I expect a continuation into January and beyond.
There was a new anthrax scare at the Fed's incoming mail center.
Mel Karmazin is in talks to become AOL Time Warner CEO. That would be a plus.
KMart and WalMart started their businesses at the same time. Yesterday Kmart, fighting to survive, announced the closing of 336 stores and laying off 37,000 workers. WalMart recently announced an aggressive store opening schedule and plans to hire another 800,000 workers over the next 5 years. The companies are in the same business. The main difference is management. It's a winning lesson. When investing, go with the proven talent. Ignore the media hype. Stick with the results.
Georgia Pacific warns its 4th quarter earnings will be disappointing. They have been hurt by "competitive market conditions and higher manufacturing costs." They failed to mention their overladen debt structure.
The analysts raved last night about Intel's 4th quarter. Get real. The stock sells at $18 with a 2003 EPS possibility of 60 cents or 30 times earnings. This is an excellent company, no longer run by Andy Grove, in a cyclical industry and there is no way their historical or present performance comes close to a 30% growth rate. Capital spending will drop about $1 billion this year to $3.7 billion, and this reflects uncertain market conditions going forward.
In December the Pew Global Attitudes opinion survey found increasingly negative views of the U.S. in over two-thirds of the 27 countries it surveyed. Given our recent troop movements, I believe that survey would be even more negative if taken today. We need to proceed cautiously and not just with a few friends. The world is a small place. It's vital to be right. It's more important to be right at the opportune time. We should take note that Germany wants a UN vote before there is a war in Iraq.
John S. Herold Inc. reports 2002 worldwide upstream M&A deal value plunged 44% to $46 billion.
Grocery distributor Fleming Cos. cut its 4th quarter profit estimate and blamed the growing dominance of WalMart. The latter does its own distributing.
The EU paints a bleak economic picture and stated that "the reaction to the slowdown in economic growth is characterized by policy inertia and backtracking."
AllFirst Financial eliminates 1132 jobs.
The dollar falls to 118.00 yen, the Euro up to 1.06 vs the dollar, and the dollar at 1.38 Swiss francs. The dollar is in a bear market.
Talking about bear markets, on occasion opportunities arise for trading rallies. I discussed that possibility 10 days after 9/11 and then again in mid-October of last year. Trading rallies do not change the basic trend. That is a given. In my view the high point for January will turn out to be the high point for 2003. I have no idea when the bear market will end. I just make the trend my friend and act accordingly. Those that fight the trend lose their capital.
December retail sales rose an expected meager 1.2% but were flat when excluding auto sales. I expect a continuation into January and beyond.
There was a new anthrax scare at the Fed's incoming mail center.
Mel Karmazin is in talks to become AOL Time Warner CEO. That would be a plus.
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