2/8/03 You Can't Fire Who You Don't Hire
The employment report for January said retail employment rose by 101,000. The fact is the hiring was not real. The employees weren't hired in December and therefore weren't fired in January. This is how ridiculous government reporting has become. They call this adjusting data for seasonal variations. I'm a simple guy. I call it bullshit. Aside from retail employment, supposedly the economy added 42,000 other jobs in January. We know this isn't true because over 100,000 net job losses were announced. The December payroll number was adjusted ownward today to show a much larger job loss of 156,000 or 55,000 more than originally stated. It would be so much easier to provide the correct number in the first place and indicate unemployment is rising.
Eurostocks near 6 year lows.
Volvo downbeat on future earnings.
In January the U.S. imported 67% of the oil Iraq exported a day. You still believe there will be a war?
Crude oil is over $35 a barrel, and gas will rise again at the pump.
Stocks declined for the fourth straight week, and have broken the chart support levels.
AIG hits 4 year low and closes at $46.70 or down $23 billion in value for the week. 38-40 looks like an interesting chart support level.
Credit card borrowing fell to a 27-year low in December. As I have been saying, the new trend is to save and not to consume.
Friday, February 07, 2003
2/7/03 Happy Birthday Edward
The Federal government announced they would be cutting 400 jobs. That's like a pimple on an elephant's ass. I was hoping for a number closer to 400,000.
In the journal, Human Production, researchers found progressive motility declined 3.1% each year. In other words, "the data suggest men may become progressively less fertile as they age." In less scientific terms, the sperm swims in circles(like the Wazoo bird) rather than making a mad dash for the female egg. The moral of the story is keep your eye on the ball.
Sears had its 17th straight monthly decline in same-store sales, and that's not easy to deliver! Their first quarter will come in below projections. Federated Dept Stores and J.C. Penney also had lower same-store sales. On the other hand, the leader of the pack, WalMart, had a sales gain of 2.3%. As always, ride the winner.
Bank of England cuts interest rates to the lowest level since 1955. They are trying to spur growth. I give them credit for trying. Hope springs eternal.
The NY Times ran an article stating the U.S. economy is in its worst hiring slump in 20 years. Tell that to Greenspan. He thinks we've hit a soft patch. I know a proctologist who thought that too.
Agilent lowers guidance. This Hewlett Packard spin-off has been a problem from the start.
Chicago topped the nation in job losses in 2002.
Circuit City cut 2000 jobs.
Hispanic births account for more than 50% of the births in California.
In the past couple of weeks gas prices have risen about 20 cents per gallon, and with that, crude oil is selling near a two year high.
Worker productivity in the fourth quarter fell far short of expectations. At some point there are diminishing returns, and we should remember that you can't get blood from a stone.
El Paso, the largest U.S. pipeline company, cut its dividend by 82%.
Dillingham Construction filed for chapter 11.
Too often individuals and/or groups don't appreciate what they have. This can be true in all walks of life. Take the 49ers and Steve Mariucci. Sometimes it takes place in relationships/marriages. Sometimes it happens with stocks. When you have a winner, don't look to see whether the grass is greener across the street. Appreciate what you have. Don't sell WalMart to buy the stock of another competitor. WalMart is probably the best run company in America. Stick with the winner, and don't overtrade. Overtrading can only bring with it losses and disappointments.
The Federal government announced they would be cutting 400 jobs. That's like a pimple on an elephant's ass. I was hoping for a number closer to 400,000.
In the journal, Human Production, researchers found progressive motility declined 3.1% each year. In other words, "the data suggest men may become progressively less fertile as they age." In less scientific terms, the sperm swims in circles(like the Wazoo bird) rather than making a mad dash for the female egg. The moral of the story is keep your eye on the ball.
Sears had its 17th straight monthly decline in same-store sales, and that's not easy to deliver! Their first quarter will come in below projections. Federated Dept Stores and J.C. Penney also had lower same-store sales. On the other hand, the leader of the pack, WalMart, had a sales gain of 2.3%. As always, ride the winner.
Bank of England cuts interest rates to the lowest level since 1955. They are trying to spur growth. I give them credit for trying. Hope springs eternal.
The NY Times ran an article stating the U.S. economy is in its worst hiring slump in 20 years. Tell that to Greenspan. He thinks we've hit a soft patch. I know a proctologist who thought that too.
Agilent lowers guidance. This Hewlett Packard spin-off has been a problem from the start.
Chicago topped the nation in job losses in 2002.
Circuit City cut 2000 jobs.
Hispanic births account for more than 50% of the births in California.
In the past couple of weeks gas prices have risen about 20 cents per gallon, and with that, crude oil is selling near a two year high.
Worker productivity in the fourth quarter fell far short of expectations. At some point there are diminishing returns, and we should remember that you can't get blood from a stone.
El Paso, the largest U.S. pipeline company, cut its dividend by 82%.
Dillingham Construction filed for chapter 11.
Too often individuals and/or groups don't appreciate what they have. This can be true in all walks of life. Take the 49ers and Steve Mariucci. Sometimes it takes place in relationships/marriages. Sometimes it happens with stocks. When you have a winner, don't look to see whether the grass is greener across the street. Appreciate what you have. Don't sell WalMart to buy the stock of another competitor. WalMart is probably the best run company in America. Stick with the winner, and don't overtrade. Overtrading can only bring with it losses and disappointments.
Thursday, February 06, 2003
2/6/03 The Trend
A month does not go by that I don't remind my readers to make the trend your friend. That's true of the market and also in business. We can learn from companies that do the opposite.
Let's look at Cisco. One money manager recently stated that "Cisco owns the market and they can still afford to charge the premium for the nameplate." How wrong he is. First, the customer cannot afford the premium for the nameplate. Second, Cisco only owns the high end of their market, and that sector is not growing. In fact, it is contracting. Another money manager said "Cisco still believes that price is still not the key issue in the marketplace." Maybe not three years ago, but price is very much a factor today, and the trend is towards saving money on less expensive equipment. For example, Conneticut's Naugatuck Valley Community College replaced Cisco equipment with 28 data switches from Hewlett-Packard and saved $80,000 or 40% over what Cisco would have charged. The savings get greater when we discuss the wins the Chinese manufacturers have provided to their customers. Cisco will pay dearly for ignoring the growing trend to price as a determining factor. The stockholders continue to pay. Cisco stock has dropped over 30% in the past year alone.
It is expected that the U.S. debt limit, currently $6.4 trillion, will be hit Feb. 20. I touched on this subject some weeks back. Now we are two weeks away from the government running out of money. The Congress should not provide a near-term fix to this problem without a plan carved in stone which reduces government expenditures by at least 5%, and that includes providing for funds for Iraq, N. Korea, and all points on the globe! They can start by rescinding the pay raise for all government workers, and then deep cuts in staff members should be included for all members of Congress as well as White House staff. Maybe then the right hand will know what the left hand is doing.
Since the slowdown started in the Silicon Valley, 130,000 jobs have been lost. To put it in perspective, that's the population of Berkeley, Ca.
Last week economic conditions took its toll on the law firm, Brobeck, Phleger and Harrison. This week San Jose-based Skjerven Morrill fell victim. The latter had been in the Silicon Valley for 26 years and specialized in intellectual property disputes. Maybe with less money for R&D, there's less intellectual property. Or maybe the intellectuals have left California and moved to a more tax friendly state- like Ted Turner.
Not all technology companies are in the soup. There's a small, privately-owned company in Bellevue, Wa called AskMe. Last year they doubled revenue, became profitable, and tripled its number of customers( Proctor & Gamble, Ford, Honeywell, Boeing, Network Appliance). The company builds Employee Knowledge Networks and collates information from HR databases, manuals, and case studies written by employees and provides the mechanism by which employees find answers to questions and thus reduce the time employees expend in spinning their wheels in utter frustration. Unlike most other software companies, AskMe is hiring.
A month does not go by that I don't remind my readers to make the trend your friend. That's true of the market and also in business. We can learn from companies that do the opposite.
Let's look at Cisco. One money manager recently stated that "Cisco owns the market and they can still afford to charge the premium for the nameplate." How wrong he is. First, the customer cannot afford the premium for the nameplate. Second, Cisco only owns the high end of their market, and that sector is not growing. In fact, it is contracting. Another money manager said "Cisco still believes that price is still not the key issue in the marketplace." Maybe not three years ago, but price is very much a factor today, and the trend is towards saving money on less expensive equipment. For example, Conneticut's Naugatuck Valley Community College replaced Cisco equipment with 28 data switches from Hewlett-Packard and saved $80,000 or 40% over what Cisco would have charged. The savings get greater when we discuss the wins the Chinese manufacturers have provided to their customers. Cisco will pay dearly for ignoring the growing trend to price as a determining factor. The stockholders continue to pay. Cisco stock has dropped over 30% in the past year alone.
It is expected that the U.S. debt limit, currently $6.4 trillion, will be hit Feb. 20. I touched on this subject some weeks back. Now we are two weeks away from the government running out of money. The Congress should not provide a near-term fix to this problem without a plan carved in stone which reduces government expenditures by at least 5%, and that includes providing for funds for Iraq, N. Korea, and all points on the globe! They can start by rescinding the pay raise for all government workers, and then deep cuts in staff members should be included for all members of Congress as well as White House staff. Maybe then the right hand will know what the left hand is doing.
Since the slowdown started in the Silicon Valley, 130,000 jobs have been lost. To put it in perspective, that's the population of Berkeley, Ca.
Last week economic conditions took its toll on the law firm, Brobeck, Phleger and Harrison. This week San Jose-based Skjerven Morrill fell victim. The latter had been in the Silicon Valley for 26 years and specialized in intellectual property disputes. Maybe with less money for R&D, there's less intellectual property. Or maybe the intellectuals have left California and moved to a more tax friendly state- like Ted Turner.
Not all technology companies are in the soup. There's a small, privately-owned company in Bellevue, Wa called AskMe. Last year they doubled revenue, became profitable, and tripled its number of customers( Proctor & Gamble, Ford, Honeywell, Boeing, Network Appliance). The company builds Employee Knowledge Networks and collates information from HR databases, manuals, and case studies written by employees and provides the mechanism by which employees find answers to questions and thus reduce the time employees expend in spinning their wheels in utter frustration. Unlike most other software companies, AskMe is hiring.
Wednesday, February 05, 2003
2/5/03 Forest Fires
I read an article recently about the Silicon Valley, and an analogy was brought out with respect to forest fires. It was suggested that periodic fires burning underbrush and weaker trees renew the entire forest region, and thus it was explained, allow it to grow and spread again. There wasn't any mention of greed, lack of managerial skills, and China. I suggest they burn the newspaper that printed this article which insults the intelligence of those feeling pain in the Silicon Valley. There are huge amounts of talented individuals without jobs and with little hope of getting a job. I have previously mentioned that one sixth of the area's space is comprised of vacant office buildings etc. There is real hurt there, and re-growth is not around the corner. Retrenchment will be the call for a long long time.
Take Cisco. Please! No one cares that their earnings improved for the past quarter. Their sales were down and Chambers said customers are even more cautious than they were at the beginning of the second quarter, and forecast another possible dip for this period. He sees no quick upturn for tech spending. He's not alone in this view.
Ted Turner will be making a move to Florida near Tallahassee for tax reasons. Florida hasn't any personal state income tax. When and if he sells his AOL stock, that will save him a wad of cash. Good for him.
AIG raises their liability reserves by $2.8 billion.
Germany's unemployment rate rose to a 5 year high.
Once again the dollar is nearing a new 4 year low vs the euro.
Senator Kent Conrad, D-N.D. "the president is taking us into an absolute swamp of deficit and debt...unparalleled in our nation's history." What would someone from ND know from swamps?
There were 132,000 job cuts in January. That's one soft patch.
Blix warns Iraq "it is five minutes to midnight." Does he really think Saddam gives a crap about the time? A little insight into Blix came when he stated "we do not have the same determination on substance as we have on process." I wonder whether he is thinking of dual citizenship and tossing his hat in the ring as a democratic candidate for president. They'll love this guy in NH. There they might be keen on processing rather than the process itself.
I read an article recently about the Silicon Valley, and an analogy was brought out with respect to forest fires. It was suggested that periodic fires burning underbrush and weaker trees renew the entire forest region, and thus it was explained, allow it to grow and spread again. There wasn't any mention of greed, lack of managerial skills, and China. I suggest they burn the newspaper that printed this article which insults the intelligence of those feeling pain in the Silicon Valley. There are huge amounts of talented individuals without jobs and with little hope of getting a job. I have previously mentioned that one sixth of the area's space is comprised of vacant office buildings etc. There is real hurt there, and re-growth is not around the corner. Retrenchment will be the call for a long long time.
Take Cisco. Please! No one cares that their earnings improved for the past quarter. Their sales were down and Chambers said customers are even more cautious than they were at the beginning of the second quarter, and forecast another possible dip for this period. He sees no quick upturn for tech spending. He's not alone in this view.
Ted Turner will be making a move to Florida near Tallahassee for tax reasons. Florida hasn't any personal state income tax. When and if he sells his AOL stock, that will save him a wad of cash. Good for him.
AIG raises their liability reserves by $2.8 billion.
Germany's unemployment rate rose to a 5 year high.
Once again the dollar is nearing a new 4 year low vs the euro.
Senator Kent Conrad, D-N.D. "the president is taking us into an absolute swamp of deficit and debt...unparalleled in our nation's history." What would someone from ND know from swamps?
There were 132,000 job cuts in January. That's one soft patch.
Blix warns Iraq "it is five minutes to midnight." Does he really think Saddam gives a crap about the time? A little insight into Blix came when he stated "we do not have the same determination on substance as we have on process." I wonder whether he is thinking of dual citizenship and tossing his hat in the ring as a democratic candidate for president. They'll love this guy in NH. There they might be keen on processing rather than the process itself.
Tuesday, February 04, 2003
2/4/03 20 Inches
Come on now. Let's not go there. This is not an x-rated blog! I'm talking the Columbia. A 20 inch piece of insulation weighing 2.67 pounds peeled off a spot where the orbiter is coupled to the external tank. It was this insulating foam which struck Columbia's left wing during takeoff. Tile damage from insulation had never been a prior a problem, and hence, not considered by NASA engineers.
After 64 days the Venezuelan oil strike is sort of over. Let's say it's fading.
With the consumer's weekend focus on the Columbia tragedy, retail sales at U.S. chain stores were down for the latest week.
American Airlines is burning thru $5 million per day. How long can that continue? The company has $2 billion in unrestricted cash on the balance sheet.
Georgia is set to lose 9000 jobs in 2003. During the past two years the state has lost 123,000 jobs.
Organizers of the Comdex computer trade show filed for chapter 11.
Gold is trading at a 7 year high.
Ericcson's losses widened in the quarter.
Germany's three largest banks will post their first yearly losses since WW II.
U.S. auto sales dropped in January.
The January ISM index dropped from the December level.
For all of you romantics with France on your mind, France's consumer sentiment is at a 5 year low and their unemployment rate is above 9%. France's pension system is shortly to be in a deficit position as the number of retirees swells.
Jean-Pascal Beaufret, Alcatel Sa CFO, "2003 will be a difficult year." Alcatel is eliminating 40% of their workforce!
Does anyone consider how little print coverage there is of the Fed? Greenspan had been on every front page of every newspaper and magazine. He's still very much alive. As I have said so often, the Fed is not the marketplace. The latter is king and not the Fed. Maybe Greenspan will retire to France and wow their economic system.
Come on now. Let's not go there. This is not an x-rated blog! I'm talking the Columbia. A 20 inch piece of insulation weighing 2.67 pounds peeled off a spot where the orbiter is coupled to the external tank. It was this insulating foam which struck Columbia's left wing during takeoff. Tile damage from insulation had never been a prior a problem, and hence, not considered by NASA engineers.
After 64 days the Venezuelan oil strike is sort of over. Let's say it's fading.
With the consumer's weekend focus on the Columbia tragedy, retail sales at U.S. chain stores were down for the latest week.
American Airlines is burning thru $5 million per day. How long can that continue? The company has $2 billion in unrestricted cash on the balance sheet.
Georgia is set to lose 9000 jobs in 2003. During the past two years the state has lost 123,000 jobs.
Organizers of the Comdex computer trade show filed for chapter 11.
Gold is trading at a 7 year high.
Ericcson's losses widened in the quarter.
Germany's three largest banks will post their first yearly losses since WW II.
U.S. auto sales dropped in January.
The January ISM index dropped from the December level.
For all of you romantics with France on your mind, France's consumer sentiment is at a 5 year low and their unemployment rate is above 9%. France's pension system is shortly to be in a deficit position as the number of retirees swells.
Jean-Pascal Beaufret, Alcatel Sa CFO, "2003 will be a difficult year." Alcatel is eliminating 40% of their workforce!
Does anyone consider how little print coverage there is of the Fed? Greenspan had been on every front page of every newspaper and magazine. He's still very much alive. As I have said so often, the Fed is not the marketplace. The latter is king and not the Fed. Maybe Greenspan will retire to France and wow their economic system.
Monday, February 03, 2003
2/3/03 Economic Debris Sheds Over The U.S.
I had planned to write on this subject yesterday; however, the Columbia tragedy took center stage, and rightly so. Just to set the record straight, I have been up all night, but that doesn't mean I'm cranky. I'm not a moody guy. I don't like it when others insult our intelligence and think it's business as usual.
I'm referring to the $2.23 trillion budget which the President plans to present to Congress. Think about this. Who has a budget of that size for a $10 trillion GDP? Remember please the consumer- that's us- is responsible for at least two-thirds of the GDP. Then healthcare represents another 15%. Those two numbers amount to about $8.2 trillion, and the latter subtracted from $10 trillion leaves only $1.8 trillion. Of the $1.8 trillion a good deal is comprised of services. As you can see, the government essentially generates no GDP. So what are we getting for that $2.23 trillion? Essentially protection via our military. The rest goes to support government agencies and/or appendages. We could eliminate two-thirds of the latter, and not miss a thing. Maybe then we wouldn't expect to see budget deficits for the next ten years. At least that's what the budget office is projecting. Their projections are so pathetic that they are an embarrassment. In fact, this budget is an embarrassment. It is worthless debris scattered over the American public's checkbooks. Wake up and smell the spending. It's rancid. This excessive spending is undermining our sovereignty and our homeland security. Unleashed government spending is a weapon of mass destruction!
I had planned to write on this subject yesterday; however, the Columbia tragedy took center stage, and rightly so. Just to set the record straight, I have been up all night, but that doesn't mean I'm cranky. I'm not a moody guy. I don't like it when others insult our intelligence and think it's business as usual.
I'm referring to the $2.23 trillion budget which the President plans to present to Congress. Think about this. Who has a budget of that size for a $10 trillion GDP? Remember please the consumer- that's us- is responsible for at least two-thirds of the GDP. Then healthcare represents another 15%. Those two numbers amount to about $8.2 trillion, and the latter subtracted from $10 trillion leaves only $1.8 trillion. Of the $1.8 trillion a good deal is comprised of services. As you can see, the government essentially generates no GDP. So what are we getting for that $2.23 trillion? Essentially protection via our military. The rest goes to support government agencies and/or appendages. We could eliminate two-thirds of the latter, and not miss a thing. Maybe then we wouldn't expect to see budget deficits for the next ten years. At least that's what the budget office is projecting. Their projections are so pathetic that they are an embarrassment. In fact, this budget is an embarrassment. It is worthless debris scattered over the American public's checkbooks. Wake up and smell the spending. It's rancid. This excessive spending is undermining our sovereignty and our homeland security. Unleashed government spending is a weapon of mass destruction!
Sunday, February 02, 2003
2/2/03 Someone Always Has It Worse Than You
The same Ames, Iowa couple who lost their son in the 911 terrorist attack on the World Trade Center mourn the death of their niece, Astronaut Laurel Clark, one of seven astronauts on board Columbia. Whether it was a heat problem, a tile problem, or a wing problem that is the cause, I would like to believe that this country does not require a tragedy to reflect on the value of life. To put matters in perspective, Ilan Ramon's Torah scroll survived the Auschwitz concentration camp, but it was destroyed in the Columbia explosion.
Don Nelson, a longtime NASA supervisor and mission planner going back to the first lunar missions, left NASA four years ago because of grave concerns about its safety program. In August he wrote to President Bush saying it was his "duty to inform you that our space shuttle astronauts are in eminent danger. Your intervention is required to prevent another catastrophic shuttle accident." He received a December 4 reply from the director of the Office of Science and Technology which stated that "NASA places a high priority on safety and has instituted a program of developing and implementing safety upgrades to reduce the risk to space shuttle crews." On December 21 Nelson replied with another letter to the White House and said "I assume that you are aware there never has been a launch vehicle that has not had multiple catastrophic failures."
As we learned yesterday, it only takes one overwhelming failure to produce a national mourning for our space heroes.
The same Ames, Iowa couple who lost their son in the 911 terrorist attack on the World Trade Center mourn the death of their niece, Astronaut Laurel Clark, one of seven astronauts on board Columbia. Whether it was a heat problem, a tile problem, or a wing problem that is the cause, I would like to believe that this country does not require a tragedy to reflect on the value of life. To put matters in perspective, Ilan Ramon's Torah scroll survived the Auschwitz concentration camp, but it was destroyed in the Columbia explosion.
Don Nelson, a longtime NASA supervisor and mission planner going back to the first lunar missions, left NASA four years ago because of grave concerns about its safety program. In August he wrote to President Bush saying it was his "duty to inform you that our space shuttle astronauts are in eminent danger. Your intervention is required to prevent another catastrophic shuttle accident." He received a December 4 reply from the director of the Office of Science and Technology which stated that "NASA places a high priority on safety and has instituted a program of developing and implementing safety upgrades to reduce the risk to space shuttle crews." On December 21 Nelson replied with another letter to the White House and said "I assume that you are aware there never has been a launch vehicle that has not had multiple catastrophic failures."
As we learned yesterday, it only takes one overwhelming failure to produce a national mourning for our space heroes.
Saturday, February 01, 2003
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.
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.
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