6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Saturday, June 12, 2004
6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
6/12/04 Being Inefficient
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Ronald Reagan on how cumbersome the bureaucracy can be with its many rules: "Don't mind them being inefficent. If they were efficient, we wouldn't have any liberty."
Jack Guynn, President of the Atlanta Fed, stated that long-term inflation expectations remain well contained; however, " a great deal depends upon how much of the recent spate of price increases turns out to be transitory. Recent developments on the price front warrant significant attention."
Over the past six years, Chevron Texaco's proven oil and gas reserves have risen more than 15% or more than 1 billion barrels while its annual output during this same period has falllen by about 14%. The company expects production to begin rising in 2006.
For the first time since 1974, talks have broken down between Maytag and its 2,225 union workers. The sticking points revolve around the company's desire to have workers pick up more health care costs and the proposal to freeze retirement benefits and not credit union members with future years of service to Maytag. There is an expectation for a long strike.
Friday, June 11, 2004
6/11/04 For All Seasons
Ronald Wilson Reagan may not have been all things to all people; however, he was a man for all seasons.
In this year's first quarter, our federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these growth rates are not sustainable.
The nation's debt accumulation has outpaced nominal GDP for the 14th time in the past 15 quarters.
This nation's mortgage debt has grown to almost $7 trillion and the household consumer debt has risen to just over $2 trillion. I guess debt can grow to the sky. It's a little like being short a stock. There is no limit on how high a stock can rise. Too bad our indebtedness is not replaced by equity ownership.
Atlanta Federal Reserve Bank President Jack Guynn: Rising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are certainly subject to change.
Ronald Wilson Reagan may not have been all things to all people; however, he was a man for all seasons.
In this year's first quarter, our federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these growth rates are not sustainable.
The nation's debt accumulation has outpaced nominal GDP for the 14th time in the past 15 quarters.
This nation's mortgage debt has grown to almost $7 trillion and the household consumer debt has risen to just over $2 trillion. I guess debt can grow to the sky. It's a little like being short a stock. There is no limit on how high a stock can rise. Too bad our indebtedness is not replaced by equity ownership.
Atlanta Federal Reserve Bank President Jack Guynn: Rising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are certainly subject to change.
6/11/04 For All Seasons
Ronald Wilson Reagan was not all things to all people; however, he was a man for all seasons.
In this year's first quarter, federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these rates of growth are not sustainable.
In this year's first quarter, the nation's debt accumulation outpaced nominal GDP for the 14th time in the past 15 months. I hope our citizens do not believe this is an achievement.
Mortgage debt has risen to almost $7 trillion. Household consumer debt increased to just over $2 trillion. Greenspan says we have nothing to worry about when it comes to these debt levels. I am worried about his judgment.
Atlanta Federal Reserve Bank President Jack Guynn: Raising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are made to change with the wind.
Ronald Wilson Reagan was not all things to all people; however, he was a man for all seasons.
In this year's first quarter, federal debt grew by 11.6%, household debt by 10.9%, and the debt of state and local governments by 9.6%. Hopefully, these rates of growth are not sustainable.
In this year's first quarter, the nation's debt accumulation outpaced nominal GDP for the 14th time in the past 15 months. I hope our citizens do not believe this is an achievement.
Mortgage debt has risen to almost $7 trillion. Household consumer debt increased to just over $2 trillion. Greenspan says we have nothing to worry about when it comes to these debt levels. I am worried about his judgment.
Atlanta Federal Reserve Bank President Jack Guynn: Raising interest rates at a "measured" pace is "more of a plan than a pledge." Plans are made to change with the wind.
Thursday, June 10, 2004
6/10/04 Behind The 8 Ball
Prices of goods imported into the U.S. rose by 1.6% in May. Export prices, on the other hand, rose o.3% in May. One doesn't need to be a genius to realize our currency won't be worth diddly should this relationship continue.
Initial unemployment claims in the most recent week rose 12,000 to 352,000, a 7 week high. Some temps must have lost their low-paying contracts.
Morgan Stanley and ABN Amro Holding predict that the Fed will lift interest rates 4 times this year to 2%. Several others share this view. In the meantime, the Bank of England lifted its benchmark lending rate by a quarter point to 4.5% citing rising house prices and other inflation concerns. It sounds like they could be describing the U.S.
Robert Arnott, manager of the $2.3 billion Pimco All Asset Fund: "18 months ago there was a lot of low-hanging fruit. Today there isn't. Almost everything is moderately to significantly expensive." Be patient, Robert. Value is waiting around the corner.
The International Energy Agency revised its oil demand forcast for 2004 by 360,000 barrels per day to the highest rate since 1980.
According to a new LA Times poll, with Nader in the race, Kerry leads Bush by 48% to 42%.
Prices of goods imported into the U.S. rose by 1.6% in May. Export prices, on the other hand, rose o.3% in May. One doesn't need to be a genius to realize our currency won't be worth diddly should this relationship continue.
Initial unemployment claims in the most recent week rose 12,000 to 352,000, a 7 week high. Some temps must have lost their low-paying contracts.
Morgan Stanley and ABN Amro Holding predict that the Fed will lift interest rates 4 times this year to 2%. Several others share this view. In the meantime, the Bank of England lifted its benchmark lending rate by a quarter point to 4.5% citing rising house prices and other inflation concerns. It sounds like they could be describing the U.S.
Robert Arnott, manager of the $2.3 billion Pimco All Asset Fund: "18 months ago there was a lot of low-hanging fruit. Today there isn't. Almost everything is moderately to significantly expensive." Be patient, Robert. Value is waiting around the corner.
The International Energy Agency revised its oil demand forcast for 2004 by 360,000 barrels per day to the highest rate since 1980.
According to a new LA Times poll, with Nader in the race, Kerry leads Bush by 48% to 42%.
Wednesday, June 09, 2004
6/9/04 Home Equity Loans
According to Lending Tree, Inc., by the end of 2004, a projected 23.5% of homeowners will have secured a home equity loan, double the number who did so in 2003. Only 6.7% had home equity loans in 2002. With wages and salaries running behind the rate of inflation for the past three years, the home equity loans have kept the consumer in the spending game. As interest rates have risen about 100 basis points, the refinancing of homes has declined to about one-third of all mortgages. The engine fueling consumers is about to run out of gas. When it does, the fallout will not present a pretty picture.
GM expects to start its car financing business in China by September or October. Car financing is another description for sales incentives. It reminds me of the barker at the circus shouting "come right this way to the greatest show on earth."
July crude fell to the contract's lowest level since May 3, and settled at $37.15 per barrel. Soon the goniffs at the gas stations will lower their prices.
John Carlson, columnist for the Des Moines Register on Ronald Reagan: "He was like a confused poker player who kept asking if a flush beat two pair and left the table with all the cash. The other players never figured out he invented the game."
Patti Davis: "There is nothing stronger than love between two people, two souls."
Tata Consultancy Services has a new clinical drug management system that could reduce a drug's time to market and lower the trial's costs.
Sen. Diane Feinstein: "There appears to be an effort to redefine torture and narrow the prohibition against it."
According to Lending Tree, Inc., by the end of 2004, a projected 23.5% of homeowners will have secured a home equity loan, double the number who did so in 2003. Only 6.7% had home equity loans in 2002. With wages and salaries running behind the rate of inflation for the past three years, the home equity loans have kept the consumer in the spending game. As interest rates have risen about 100 basis points, the refinancing of homes has declined to about one-third of all mortgages. The engine fueling consumers is about to run out of gas. When it does, the fallout will not present a pretty picture.
GM expects to start its car financing business in China by September or October. Car financing is another description for sales incentives. It reminds me of the barker at the circus shouting "come right this way to the greatest show on earth."
July crude fell to the contract's lowest level since May 3, and settled at $37.15 per barrel. Soon the goniffs at the gas stations will lower their prices.
John Carlson, columnist for the Des Moines Register on Ronald Reagan: "He was like a confused poker player who kept asking if a flush beat two pair and left the table with all the cash. The other players never figured out he invented the game."
Patti Davis: "There is nothing stronger than love between two people, two souls."
Tata Consultancy Services has a new clinical drug management system that could reduce a drug's time to market and lower the trial's costs.
Sen. Diane Feinstein: "There appears to be an effort to redefine torture and narrow the prohibition against it."
Tuesday, June 08, 2004
6/8/04 Whatever It Takes
Greenspan: The FOMC "is prepared to do what is required" to fight inflation. If necessary, interest rate hikes will not be measured.
Shell Oil is cutting 600 to 800 IT jobs in the U.S. in a cost cutting move. Currently, Shell has 9,000 software developers. The company plans to send more of its work to India and Malaysia.
India is seeking to develop "value partnerships" in discovery drug research with U.S. firms. The new Indian government is committed to protect intellectual property rights.
India's forex reserves have climbed to $120 billion. Gold assets remain at $4.19 billion.
Home Depot plansd to create a business development operation in China. They will find little competition in that country.
Is Bush being to crack under the many pressures he is feeling and confronting?
Greenspan: The FOMC "is prepared to do what is required" to fight inflation. If necessary, interest rate hikes will not be measured.
Shell Oil is cutting 600 to 800 IT jobs in the U.S. in a cost cutting move. Currently, Shell has 9,000 software developers. The company plans to send more of its work to India and Malaysia.
India is seeking to develop "value partnerships" in discovery drug research with U.S. firms. The new Indian government is committed to protect intellectual property rights.
India's forex reserves have climbed to $120 billion. Gold assets remain at $4.19 billion.
Home Depot plansd to create a business development operation in China. They will find little competition in that country.
Is Bush being to crack under the many pressures he is feeling and confronting?
Monday, June 07, 2004
6/7/04 Inflation
It is hard to measure inflation. In the end, it is a personal matter. It depends on each individual's spending habits. Some drive more miles. Some do a good deal of home improvement projects and can get impacted by rising lumber and possibly even metal prices. Shipping costs can cause some hurt to the bottom line. You may be effected by rising airline prices due to fuel adjustments. For some inflation is alive and well. The CRB Index recently hit a 23 year high. For others, it may come down to the cost of eggs and milk. The fact is though that no one escapes the hand of inflation when it is rising. You don't need the Fed to remind you. Your bank balance feels it. If inflation should gain traction, you had better hunker down. The results will not be pleasant. Fighting inflation and high interst rates took its toll some two decades ago. They were trying times for all Americans, and that included Ronadl Reagan. Let's hope those times are not revisited.
The Congress is working on a $447 billion defense budget. You can do the math. We have 285 million Americans. That size budget, is, in my view, indefensible. It is irrational and irresponsible. I guarantee they cannot reconcile the accounting for all those expenditures. Hopefully, all Amnericans will not swallow and accept this budget in the name of the war on terror. Our greatest enemy is the great divide in our country. It costs nothing to fix it but the will to do so.
It is hard to measure inflation. In the end, it is a personal matter. It depends on each individual's spending habits. Some drive more miles. Some do a good deal of home improvement projects and can get impacted by rising lumber and possibly even metal prices. Shipping costs can cause some hurt to the bottom line. You may be effected by rising airline prices due to fuel adjustments. For some inflation is alive and well. The CRB Index recently hit a 23 year high. For others, it may come down to the cost of eggs and milk. The fact is though that no one escapes the hand of inflation when it is rising. You don't need the Fed to remind you. Your bank balance feels it. If inflation should gain traction, you had better hunker down. The results will not be pleasant. Fighting inflation and high interst rates took its toll some two decades ago. They were trying times for all Americans, and that included Ronadl Reagan. Let's hope those times are not revisited.
The Congress is working on a $447 billion defense budget. You can do the math. We have 285 million Americans. That size budget, is, in my view, indefensible. It is irrational and irresponsible. I guarantee they cannot reconcile the accounting for all those expenditures. Hopefully, all Amnericans will not swallow and accept this budget in the name of the war on terror. Our greatest enemy is the great divide in our country. It costs nothing to fix it but the will to do so.
Sunday, June 06, 2004
6/6/04 Thanks For The Memories
Only three times have I felt good about voting for a presidential candidate, and of those, twice were for Ronald Reagan. He was a great leader, a fantastic communicator to nations around the globe, and provided optimism and a feel good red, white, and blue spirit to Americans. Our country has not come close to electing an individual who could carry his genuine smile.
It is the 60th anniversary of D- Day. Our veterans did make the world a safer place. They made a difference that is still felt today.
Smarty Jones has great courage and grit. His owners, handlers, and jockey have displayed great class throughout the running of the triple crown events. I thought this 15.3 hands thoroughbred was a lock on the Belmont Stakes. He just came up a bit short in the end. The loss was disappointing but not Smarty Jones. He gave it everything he had.
As I was watching the events of yesterday and thinking about the ending to WWII, I could not help but turn my attention once again to the battle raging within our nation. We can’t defeat time. No warhead can do it. Praying cannot stop a clock. Americans are aging. Millions are squeezed for co-payments and deductibles. Millions are squeezed due to no health insurance. At present, this is a losing battle. According to Hewitt Associates, in 1998, employees nationwide paid out-of-pocket medical expenses of $385 per year. This year, it’s averaging $1,030. In addition, in 1998, health insurance premiums cost $630. This year employees are paying an average of $1,565. In 1998, employers covered 75% of the health expenses. This year that’s down to 68%. In essence, you have the underinsured and the uninsured. The average hourly paycheck cannot carry the burden of rising healthcare costs.
Only three times have I felt good about voting for a presidential candidate, and of those, twice were for Ronald Reagan. He was a great leader, a fantastic communicator to nations around the globe, and provided optimism and a feel good red, white, and blue spirit to Americans. Our country has not come close to electing an individual who could carry his genuine smile.
It is the 60th anniversary of D- Day. Our veterans did make the world a safer place. They made a difference that is still felt today.
Smarty Jones has great courage and grit. His owners, handlers, and jockey have displayed great class throughout the running of the triple crown events. I thought this 15.3 hands thoroughbred was a lock on the Belmont Stakes. He just came up a bit short in the end. The loss was disappointing but not Smarty Jones. He gave it everything he had.
As I was watching the events of yesterday and thinking about the ending to WWII, I could not help but turn my attention once again to the battle raging within our nation. We can’t defeat time. No warhead can do it. Praying cannot stop a clock. Americans are aging. Millions are squeezed for co-payments and deductibles. Millions are squeezed due to no health insurance. At present, this is a losing battle. According to Hewitt Associates, in 1998, employees nationwide paid out-of-pocket medical expenses of $385 per year. This year, it’s averaging $1,030. In addition, in 1998, health insurance premiums cost $630. This year employees are paying an average of $1,565. In 1998, employers covered 75% of the health expenses. This year that’s down to 68%. In essence, you have the underinsured and the uninsured. The average hourly paycheck cannot carry the burden of rising healthcare costs.
Saturday, June 05, 2004
6/5/06 Do You Feel Lucky Today?
You are in the chips. Congratulations. If you are a production or non-supervisory worker, your average hourly wages rose by 5 cents in May, and that’s after the 4 cent increase in April. That’s the good news. Unfortunately, your hours worked per week remained unchanged at 33.8 hours per week. That leaves plenty of time to place a bet on Smarty Jones. It could be worse. The number of unemployed persons remained unchanged in May at 8.2 million. That does not include the 80,000 dropped from the unemployment tally each week due to the loss of benefits. The unemployment rate has essentially remained the same since December 2003. The proportion of the population age 16 and over with jobs—remained at 62.2%. The civilian labor force participation rate was 65.9% for the fourth consecutive month. Also not counted as unemployed were another 1.5 million marginally attached to the labor force, about the same number as one year ago. There were 476,000 discouraged workers in May, also about the same number as a year earlier. The number of persons who had been jobless for 27 weeks or longer held at 1.8 million.
There are always bright spots. In May, construction employment grew by 37,000 and over the past 14 months the construction industry has added about 250,000 jobs. Essentially in the durable goods sector, 32,000 jobs were added in May, and most were in construction-related manufacturing industries, such as, fabricated metal products and wood products. Employment in temporary help was once again the real star in May, and in the last 13 months about 299,000 temp jobs have been added. Health care and social assistance added 36,000 jobs in May, and over the past year a total of 274,000 jobs. We can’t forget that old standby food services. That sector added 33,000 jobs in May, roughly the monthly increase for 2004. Lastly, the retail industry, and that includes building material and garden supply, food and beverage, and clothing stores, has added 142,000 jobs over the past year. These are the same sectors I have highlighted for the past year. Nothing has changed. I do want to include one thought. The unemployment rate for adult women is only 4.8%. It is more cost effective for businesses to hire women rather than men. For the same job, women, on average, only earn 75% or less than do the men. It is one more reason why the average hourly earnings per week has hardly increased over the past year, and when viewed in the light of rising inflation, the salaries and wages have declined.
Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago: “I don’t see anything not to like in this report.” He is talking about the employment report I just discussed. It’s not enough to state that 248,000 non-farm payroll jobs were added in May. One must also focus on the quality of those jobs. They continue to be lower paying and, for the most part, without benefits or with minor benefits. Do you know a great many people who can make ends meet on $528.63 per week before taxes? That’s what’s wrong with the employment picture. Too many Americans cannot earn a living leading to some quality of life. How much income can one expect from employment in service industries? This sector added 176,000 jobs in May and 294,000 in April. The leading area within the entire sector was temporary employment. That’s truly why the weekly hours worked remain at such a low level. I am certain of one thing. The weekly wages of $528.63 will not lead to a sustained recovery. It will not lead to the re-election of Bush. It will not lead to higher interest rates. Consumer spending will no longer carry the day.
I was happy to see that, in May, there was a net decrease of 27,000 government jobs. I also noticed that on Friday it was announced that more than 400 government jobs will be eliminated by Iowa Gov. Tom Vilsack in an effort to reduce the state’s budget gap.
Boeing continues to eliminate workers. In the state of Washington they shed 250 workers in April. IBM will cut 63 jobs at their Rational Software subsidiary in Redmond, Washington. Maytag will cut 20% of its salaried workforce or about 1,100 jobs.
The rate of growth in China’s car sales in the month of May dropped by more than 50% from the prior month. It is still a healthy 15% or so, but it won’t help carry the day for GM. With incentives rising to $5,000, GM needs a blowout performance from its China operations. They delivered in the first four months of 2004; however, with the curbing of car loans by the Chinese government, it would appear that results for the remainder of 2005 will reflect a significant slowdown.
The price for Brent crude fell 1.9% this week. U.S. crude futures closed below $39 per barrel, and 8% below the record intraday high set on Tuesday.
The race is 1 ½ miles. There are only nine horses entered in the Belmont Stakes. Based on past results, maybe four horses should be racing. When you have Secretariat and Mr. Prospector running through your veins, it might be realistic to see only one horse running. Bring two pairs of binoculars. You’ll see Smarty Jones in one and the other eight horses in the other binoculars. It will be a split screen race. The question is how lucky do you feel today? Can you pick the number of lengths Smarty will win by today? Will it be 13?
That’s my guess. Smarty can retire undefeated --- like Seattle Slew and Rocky Marciano.
Karen Taylor, co-owner with her husband of Seattle Slew: “When you looked him in the eye he would look into your soul.”
You are in the chips. Congratulations. If you are a production or non-supervisory worker, your average hourly wages rose by 5 cents in May, and that’s after the 4 cent increase in April. That’s the good news. Unfortunately, your hours worked per week remained unchanged at 33.8 hours per week. That leaves plenty of time to place a bet on Smarty Jones. It could be worse. The number of unemployed persons remained unchanged in May at 8.2 million. That does not include the 80,000 dropped from the unemployment tally each week due to the loss of benefits. The unemployment rate has essentially remained the same since December 2003. The proportion of the population age 16 and over with jobs—remained at 62.2%. The civilian labor force participation rate was 65.9% for the fourth consecutive month. Also not counted as unemployed were another 1.5 million marginally attached to the labor force, about the same number as one year ago. There were 476,000 discouraged workers in May, also about the same number as a year earlier. The number of persons who had been jobless for 27 weeks or longer held at 1.8 million.
There are always bright spots. In May, construction employment grew by 37,000 and over the past 14 months the construction industry has added about 250,000 jobs. Essentially in the durable goods sector, 32,000 jobs were added in May, and most were in construction-related manufacturing industries, such as, fabricated metal products and wood products. Employment in temporary help was once again the real star in May, and in the last 13 months about 299,000 temp jobs have been added. Health care and social assistance added 36,000 jobs in May, and over the past year a total of 274,000 jobs. We can’t forget that old standby food services. That sector added 33,000 jobs in May, roughly the monthly increase for 2004. Lastly, the retail industry, and that includes building material and garden supply, food and beverage, and clothing stores, has added 142,000 jobs over the past year. These are the same sectors I have highlighted for the past year. Nothing has changed. I do want to include one thought. The unemployment rate for adult women is only 4.8%. It is more cost effective for businesses to hire women rather than men. For the same job, women, on average, only earn 75% or less than do the men. It is one more reason why the average hourly earnings per week has hardly increased over the past year, and when viewed in the light of rising inflation, the salaries and wages have declined.
Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago: “I don’t see anything not to like in this report.” He is talking about the employment report I just discussed. It’s not enough to state that 248,000 non-farm payroll jobs were added in May. One must also focus on the quality of those jobs. They continue to be lower paying and, for the most part, without benefits or with minor benefits. Do you know a great many people who can make ends meet on $528.63 per week before taxes? That’s what’s wrong with the employment picture. Too many Americans cannot earn a living leading to some quality of life. How much income can one expect from employment in service industries? This sector added 176,000 jobs in May and 294,000 in April. The leading area within the entire sector was temporary employment. That’s truly why the weekly hours worked remain at such a low level. I am certain of one thing. The weekly wages of $528.63 will not lead to a sustained recovery. It will not lead to the re-election of Bush. It will not lead to higher interest rates. Consumer spending will no longer carry the day.
I was happy to see that, in May, there was a net decrease of 27,000 government jobs. I also noticed that on Friday it was announced that more than 400 government jobs will be eliminated by Iowa Gov. Tom Vilsack in an effort to reduce the state’s budget gap.
Boeing continues to eliminate workers. In the state of Washington they shed 250 workers in April. IBM will cut 63 jobs at their Rational Software subsidiary in Redmond, Washington. Maytag will cut 20% of its salaried workforce or about 1,100 jobs.
The rate of growth in China’s car sales in the month of May dropped by more than 50% from the prior month. It is still a healthy 15% or so, but it won’t help carry the day for GM. With incentives rising to $5,000, GM needs a blowout performance from its China operations. They delivered in the first four months of 2004; however, with the curbing of car loans by the Chinese government, it would appear that results for the remainder of 2005 will reflect a significant slowdown.
The price for Brent crude fell 1.9% this week. U.S. crude futures closed below $39 per barrel, and 8% below the record intraday high set on Tuesday.
The race is 1 ½ miles. There are only nine horses entered in the Belmont Stakes. Based on past results, maybe four horses should be racing. When you have Secretariat and Mr. Prospector running through your veins, it might be realistic to see only one horse running. Bring two pairs of binoculars. You’ll see Smarty Jones in one and the other eight horses in the other binoculars. It will be a split screen race. The question is how lucky do you feel today? Can you pick the number of lengths Smarty will win by today? Will it be 13?
That’s my guess. Smarty can retire undefeated --- like Seattle Slew and Rocky Marciano.
Karen Taylor, co-owner with her husband of Seattle Slew: “When you looked him in the eye he would look into your soul.”
Friday, June 04, 2004
6/4/03 Wholesale Gasoline Prices Plummet
Over the last two days wholesale gasoline prices fell by nearly 12 cents a gallon. It’s a start. OPEC boosted output quotas by 2 million barrels, and Mark Baxter, director of the Maguire Energy Institute at the SMU Cox School of Business, stated this increase in output could take 35 cents a gallon off the price of gasoline. Also contributing to the price decline was the 1.3 million barrels rise in U.S. gasoline reserves. U.S. oil stockpiles rose by 2.8 million barrels in the week ended May 28. Crude is trading under $39 a barrel. The price will decline further the old-fashioned way—supply will outstrip demand.
Rather noteworthy is the Rocket at 8-0 and now with 318 career wins.
U.S. employers announced plans in May to cut 73,368 jobs, a 6.9% increase over the same month a year earlier, according to Challenger, Gray, & Christmas. All the buzz is about new job creation. Low-paying, non-benefit, non-permanent jobs are hardly the American dream. Then again, it beats food stamps and the unemployment lines. The insured unemployment rate rose to 2.4% in the week ended May 22 from 2.3%. Thirty states and territories during that week reported an increase in new claims, while 23 had a decrease. This is hardly the stuff that signals strong job creation. It signals the jobless rate moving higher.
Seagate is cutting 7% of its workforce or 2,900 workers.
The story at Intel is the turnaround of flash memory for cell phones. After a big loss in 2003, it is nearing profitability and will turn into the green in 2005.
The ISM’s non-manufacturing index for new orders fell to 61.3 from 65.6 in April. It suggests a slowing services sector in the months to come.
Continental Air’s CEO Bethune: “As to the financial condition of the industry—it is perilous, and the skies are only growing darker.” That is not true for Southwest Air or a few others.
There is a rumor that George Tenet will star in a new reality TV show called “The Fall Guy.”
Over the last two days wholesale gasoline prices fell by nearly 12 cents a gallon. It’s a start. OPEC boosted output quotas by 2 million barrels, and Mark Baxter, director of the Maguire Energy Institute at the SMU Cox School of Business, stated this increase in output could take 35 cents a gallon off the price of gasoline. Also contributing to the price decline was the 1.3 million barrels rise in U.S. gasoline reserves. U.S. oil stockpiles rose by 2.8 million barrels in the week ended May 28. Crude is trading under $39 a barrel. The price will decline further the old-fashioned way—supply will outstrip demand.
Rather noteworthy is the Rocket at 8-0 and now with 318 career wins.
U.S. employers announced plans in May to cut 73,368 jobs, a 6.9% increase over the same month a year earlier, according to Challenger, Gray, & Christmas. All the buzz is about new job creation. Low-paying, non-benefit, non-permanent jobs are hardly the American dream. Then again, it beats food stamps and the unemployment lines. The insured unemployment rate rose to 2.4% in the week ended May 22 from 2.3%. Thirty states and territories during that week reported an increase in new claims, while 23 had a decrease. This is hardly the stuff that signals strong job creation. It signals the jobless rate moving higher.
Seagate is cutting 7% of its workforce or 2,900 workers.
The story at Intel is the turnaround of flash memory for cell phones. After a big loss in 2003, it is nearing profitability and will turn into the green in 2005.
The ISM’s non-manufacturing index for new orders fell to 61.3 from 65.6 in April. It suggests a slowing services sector in the months to come.
Continental Air’s CEO Bethune: “As to the financial condition of the industry—it is perilous, and the skies are only growing darker.” That is not true for Southwest Air or a few others.
There is a rumor that George Tenet will star in a new reality TV show called “The Fall Guy.”
Thursday, June 03, 2004
6/3/04 National Hunger Awareness Day
Bill Shore, executive director of Share Our Strength: “There are two kinds of poverty in America: There are those who don’t have and those who don’t know. The majority of Americans are fortunate not to be in the category of those who don’t have. Too many have been willing to remain in the category of those who don’t know.”
Food stamps are used by more than 10 million households. There are more than 65,000 soup kitchens that feed almost 20 million Americans.
MIT’s Leonard Guarante: “ When there’s plenty of food, we reproduce and die. When there’s famine, we don’t reproduce, but we age more slowly to ensure survival.”
For the first time in 122 years, on June 8, Venus will cross the path of the Sun. By calculating how long it takes Venus to cross the Sun, one can figure the distance from the Earth to the Sun. The transit begins on June 6.
Yemen is known for khat, coffee, and Mohammed bin Laden. Osama is the 17th son of Mohammed. Maybe, with over 50 children in the family, Osama was lacking in quality time with his father.
King Fahd of Saudi Arabia after 9/11: “bin Laden children are all over America. Take measures to protect the innocents.” Three days after 9/11 a private charter plane flew these children out of the United States. The FBI supervised this effort. It’s pay back time. The Saudi oil will flow to the max.
Qantas will re-launch direct flights from Sydney to Shanghai and Bombay. Quantas executive general manager John Borghetti stated “we believe it is the future for us—India and China. Official figures show 176,000 visitors from China arrived in Australia in 2003, and the number is expected to grow to 960,000 by 2013. The number of Indians traveling overseas is expected to rise from 4.7 million last year to 50 million in 2020.
General Motors is raising the cash rebates on most of its 2003 and 2004 model year vehicles to $5,000 from the present $4,500. I’m so happy that GM is telling the world how great demand is for their vehicles.
According to AutoVIBES, nearly 50% of car buyers state gas prices are affecting their purchase decisions. The survey indicated that, after the recent gasoline price increases, a good number of shoppers “are now taking a second look at vehicles they wouldn’t normally consider.”
The Western Washington (that includes Seattle and its environs) chapter of the National Association of Purchasing Managers stated its index fell in May for the second monthly decline in a row. The index fell to 58 from April’s 60.5. March’s level was 68.3. Current production and new orders are down significantly over the past two months, and inventories are forecast to drop over the next 90 days.
The Boeing Employees’ Credit Union is laying off 70 workers in the Puget Sound region. The credit union has 360,000 members and there will be 800 staff members after the job cuts.
Bill Shore, executive director of Share Our Strength: “There are two kinds of poverty in America: There are those who don’t have and those who don’t know. The majority of Americans are fortunate not to be in the category of those who don’t have. Too many have been willing to remain in the category of those who don’t know.”
Food stamps are used by more than 10 million households. There are more than 65,000 soup kitchens that feed almost 20 million Americans.
MIT’s Leonard Guarante: “ When there’s plenty of food, we reproduce and die. When there’s famine, we don’t reproduce, but we age more slowly to ensure survival.”
For the first time in 122 years, on June 8, Venus will cross the path of the Sun. By calculating how long it takes Venus to cross the Sun, one can figure the distance from the Earth to the Sun. The transit begins on June 6.
Yemen is known for khat, coffee, and Mohammed bin Laden. Osama is the 17th son of Mohammed. Maybe, with over 50 children in the family, Osama was lacking in quality time with his father.
King Fahd of Saudi Arabia after 9/11: “bin Laden children are all over America. Take measures to protect the innocents.” Three days after 9/11 a private charter plane flew these children out of the United States. The FBI supervised this effort. It’s pay back time. The Saudi oil will flow to the max.
Qantas will re-launch direct flights from Sydney to Shanghai and Bombay. Quantas executive general manager John Borghetti stated “we believe it is the future for us—India and China. Official figures show 176,000 visitors from China arrived in Australia in 2003, and the number is expected to grow to 960,000 by 2013. The number of Indians traveling overseas is expected to rise from 4.7 million last year to 50 million in 2020.
General Motors is raising the cash rebates on most of its 2003 and 2004 model year vehicles to $5,000 from the present $4,500. I’m so happy that GM is telling the world how great demand is for their vehicles.
According to AutoVIBES, nearly 50% of car buyers state gas prices are affecting their purchase decisions. The survey indicated that, after the recent gasoline price increases, a good number of shoppers “are now taking a second look at vehicles they wouldn’t normally consider.”
The Western Washington (that includes Seattle and its environs) chapter of the National Association of Purchasing Managers stated its index fell in May for the second monthly decline in a row. The index fell to 58 from April’s 60.5. March’s level was 68.3. Current production and new orders are down significantly over the past two months, and inventories are forecast to drop over the next 90 days.
The Boeing Employees’ Credit Union is laying off 70 workers in the Puget Sound region. The credit union has 360,000 members and there will be 800 staff members after the job cuts.
Wednesday, June 02, 2004
6/2/04 The Spigot Will Drown The Speculators
Make no mistake. The thugs will not win this battle. The specs will get hosed. The spigot will open wide. The Qatari minister, Abdullah bin Hamad al-Attiyah,stated it best when he remarked "everybody should produce what they want over the next few months." For the near future, at least, OPEC holds the key to the spigot. To fight their will is stupid. They have a need to bring down oil prices. These guys want the world's economic engine to keep churning away. Sky high oil prices are bad for business and bad for the buyers of their oil. Whether they produce 26 million barrels of oil a day or a slightly different number, the daily spigot will lean on the price of oil. Security will increase around the key areas of the spigot. That has begun. Forget the headlines. Pay attention to the decisions out of OPEC on Thursday. Yesterday's spike in oil will prove, in my view, the high point for a considerable period of time. If the consumers of oil and gas do their part and cutback on usage, then the price has an opportunity to truly decline by $10 per barrel.
Will Mel Karmazin go to Disney? If I were a Disney board member, I'd want to talk to him about the top job.
Make no mistake. The thugs will not win this battle. The specs will get hosed. The spigot will open wide. The Qatari minister, Abdullah bin Hamad al-Attiyah,stated it best when he remarked "everybody should produce what they want over the next few months." For the near future, at least, OPEC holds the key to the spigot. To fight their will is stupid. They have a need to bring down oil prices. These guys want the world's economic engine to keep churning away. Sky high oil prices are bad for business and bad for the buyers of their oil. Whether they produce 26 million barrels of oil a day or a slightly different number, the daily spigot will lean on the price of oil. Security will increase around the key areas of the spigot. That has begun. Forget the headlines. Pay attention to the decisions out of OPEC on Thursday. Yesterday's spike in oil will prove, in my view, the high point for a considerable period of time. If the consumers of oil and gas do their part and cutback on usage, then the price has an opportunity to truly decline by $10 per barrel.
Will Mel Karmazin go to Disney? If I were a Disney board member, I'd want to talk to him about the top job.
Tuesday, June 01, 2004
6/1/04 The Bench
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new veh
OK, well, i have stuff to do before i leave at 9:30 to go pick up the snack.
BYEBYE
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new veh
OK, well, i have stuff to do before i leave at 9:30 to go pick up the snack.
BYEBYE
6/1/04 The Bench
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new vehicle sales last month.
If Mel Karmazin does leave Viacom, it would be a blow to the leadership of the company.
Ketan Sampeth, President, Intel India: "India's emerging consumer market is a key to Intel's high growth plans. India holds the third place in Intel's revenue chart for fastest growing consumer market in the world."
Karl Malone: "You've got to have a struggle to get to where you want to go."
There comes a time when it is necessary to turn to your bench to win the game. Last night the Lakers could not rely on Shaq and Kobe to pull out a win. They turned to Kareem Rush, a second year player who has received few playing minutes. By hitting six threes from downtown, he produced the win and carried his team into the finals. The world economy has been depending on the American consumer to create winning economic results for many years. Age is beginning to have an impact on spending habits, and record gas prices and muted wage and salary gains for the past three years have contributed to the consumer approaching the spending limit wall. The bench will need to come to the rescue. U.S. business spending will not make up the slack. The most likely contributors are those in the Asean economy. However, until they get more playing time, countries like China and India cannot be expected to win the games night after night. Their economies need seasoning.
Mitsubishi Motors posted a 56% decline in new vehicle sales last month.
If Mel Karmazin does leave Viacom, it would be a blow to the leadership of the company.
Monday, May 31, 2004
5/31/04 The Day After
Yesterday, over 800 pairs of combat boots, each symbolizing a U.S. soldier killed in Iraq, lined Upper Senate Park in front of the Capitol Building in Washington, DC.
Prior to yesterday, there had been attacks in Yanbu and Basra. On Sunday, al-Qaeda attacked Khobar in Saudi Arabia and killed 22 civilians. Khobar hasn't any production, export, or oil refining facilities, and yet, crude oil futures jumped sharply in Asian trading. Al-Qaeda is trying to send a message to the Saudis prior to Thursday's OPEC meeting. These attacks can only prove detrimental to al-Qaeda.
Tornadoes and storms once again hit many parts of the U.S. Nebraska, Oklahoma, Indiana, Kentucky, Tennessee, Illinois, Missouri, and Kansas were all impacted yesterday. The weather is beginning to play a more hazardous role in the lives of many Americans.
McDonald's has 56 outlets in India and "will add at least 15 new restaurants in the current year." It's first store opened in New Delhi in 1996. The menu is quite different with McCurry Pan and McAloo Tikki potato patties in strong demand.
Yesterday, over 800 pairs of combat boots, each symbolizing a U.S. soldier killed in Iraq, lined Upper Senate Park in front of the Capitol Building in Washington, DC.
Prior to yesterday, there had been attacks in Yanbu and Basra. On Sunday, al-Qaeda attacked Khobar in Saudi Arabia and killed 22 civilians. Khobar hasn't any production, export, or oil refining facilities, and yet, crude oil futures jumped sharply in Asian trading. Al-Qaeda is trying to send a message to the Saudis prior to Thursday's OPEC meeting. These attacks can only prove detrimental to al-Qaeda.
Tornadoes and storms once again hit many parts of the U.S. Nebraska, Oklahoma, Indiana, Kentucky, Tennessee, Illinois, Missouri, and Kansas were all impacted yesterday. The weather is beginning to play a more hazardous role in the lives of many Americans.
McDonald's has 56 outlets in India and "will add at least 15 new restaurants in the current year." It's first store opened in New Delhi in 1996. The menu is quite different with McCurry Pan and McAloo Tikki potato patties in strong demand.
Sunday, May 30, 2004
5/30/04 An Arm, A Leg, And Your First Born
There was a TV ad showing a gas station with three gas tanks. The unleaded tank with gas at $2.40 per gallon had a picture of an arm on it. The mid-fuel tank at $2.50 per gallon had a picture of a leg. Finally, the super unleaded tank at $2.60 per gallon had a picture of one's first born.
At the moment, hybrid cars are but a tiny dot on the auto scene. Toyota originally planned to make 36,000 Prius vehicles for the 2004 year. However, demand has been so strong that last month it started manufacturing an additional 11,000 cars at its Motomachi plant in Toyota City in Japan, which makes all Prius vehicles. Forty percent of the production goes to the U.S. where there is a four to six month waiting list to buy the car. The hybrid Civic is also in strong demand. There are new hybrids on the way: the Ford Escape, the Lexus RX 400 H, the Honda Accord, and the Toyota Highlander. One can see that American car manufacturers are almost absent from the list of fall arrivals. Their non-hybrid vehicles continue to mount in inventory. The declining profitability of their SUVs will hurt their bottom line performance. In time, the growing demand for hybrids will lessen gasoline usage. It may not happen today, but it will happen. Eventually, OPEC will feel it just as Kodak has felt the impact of digital photography. OPEC's greatest enemy is Toyota, and when it comes to brains, OPEC is no match.
According to the U.S. Department of Veterans Affairs, more than 25 million veterans are alive today. Of the 16 million service members during WWII, only about 4.4 million are living. These brave Americans understood the call of duty, and protected our freedoms with the strongest of wills accompanied by dignified honor.
There was a TV ad showing a gas station with three gas tanks. The unleaded tank with gas at $2.40 per gallon had a picture of an arm on it. The mid-fuel tank at $2.50 per gallon had a picture of a leg. Finally, the super unleaded tank at $2.60 per gallon had a picture of one's first born.
At the moment, hybrid cars are but a tiny dot on the auto scene. Toyota originally planned to make 36,000 Prius vehicles for the 2004 year. However, demand has been so strong that last month it started manufacturing an additional 11,000 cars at its Motomachi plant in Toyota City in Japan, which makes all Prius vehicles. Forty percent of the production goes to the U.S. where there is a four to six month waiting list to buy the car. The hybrid Civic is also in strong demand. There are new hybrids on the way: the Ford Escape, the Lexus RX 400 H, the Honda Accord, and the Toyota Highlander. One can see that American car manufacturers are almost absent from the list of fall arrivals. Their non-hybrid vehicles continue to mount in inventory. The declining profitability of their SUVs will hurt their bottom line performance. In time, the growing demand for hybrids will lessen gasoline usage. It may not happen today, but it will happen. Eventually, OPEC will feel it just as Kodak has felt the impact of digital photography. OPEC's greatest enemy is Toyota, and when it comes to brains, OPEC is no match.
According to the U.S. Department of Veterans Affairs, more than 25 million veterans are alive today. Of the 16 million service members during WWII, only about 4.4 million are living. These brave Americans understood the call of duty, and protected our freedoms with the strongest of wills accompanied by dignified honor.
Saturday, May 29, 2004
5/29/04 It's Telling
As we ponder over this Memorial Day weekend, I thought I might interrupt the various happenings with an observation that has proven helpful to me over the years. Whether it's the media, politicians, financial pundits, friends, or family members, often it is more meaningful to focus on what is not said rather than what has been said. The unspoken and the unwritten are frequently more telling and closer to the truth.
As we ponder over this Memorial Day weekend, I thought I might interrupt the various happenings with an observation that has proven helpful to me over the years. Whether it's the media, politicians, financial pundits, friends, or family members, often it is more meaningful to focus on what is not said rather than what has been said. The unspoken and the unwritten are frequently more telling and closer to the truth.
Thursday, May 27, 2004
5/28/04 Economic Uncertainty And Casino Gaming
Life must be a crap shoot for many Americans. According to the 2004 State of the States: The AGA Survey of Casino Entertainment, two million more Americans visited a casino in 2003 than in 2002. In fact, 53.4 million adult Americans went to casinos last year. These visitors made a total of 310 million trips to casinos in 2003, averaging 5.8 trips per person. According to statistics gathered primarily from state regulatory agencies, the 443 commercial casinos in 11 states nationwide generated more than $27 billion in gross gaming revenue in 2003, an increase of nearly 2% compared to 2002. From that revenue, casinos paid state and local governments $4.32 billion in direct gaming taxes. Employment figures rose slightly in 2003, with the industry providing jobs for 352,428 workers who earned more than $11.8 billion in salaries, including benefits and tips. Frank Fahrenkopf, Jr., president and CEO of the AGA, stated “what these numbers signify is that even when the country is facing an extended period of economic uncertainty, Americans still set aside a portion of their disposable income for fun and entertainment.”
U.S. Energy Secretary Abraham stated that the increase in output by Saudi Arabia would have a “significant effect on oil prices. We also have positive signs from Mexico, Nigeria, and Russia that production will rise to meet the global demand.” In response to those statements, light crude dropped about $1 to $39.75 per barrel. On the other hand, OPEC President Yusgiantoro stated OPEC probably would have to raise supply allocations by more than 2.3 million barrels per day or 10% to have much success in curbing speculation. In my view, rising prices will reduce demand and the latter will curtail speculation. Gasoline consumption needs to decline from the present 9 million barrels per day. It’s up to American drivers to make that happen.
While the Dow, S&P, and the Nasdaq have been focusing on oil prices, the dollar has resumed its downtrend. The dollar dropped to its lowest level versus the euro in over three weeks. The British pound rose to a six week high against the dollar. In addition, money keeps flowing from the dollar into the Japanese yen. Traders blame the weakness in the dollar on the rising threat of terrorism. That maybe a partial answer; however, with the demand for new houses dimming, rising inventories of SUVs, the impact of high gas prices on consumers, and the failure of jobless claims to experience a larger drop, there is a growing inkling that economic growth has topped out. The recent strength in the bond market appears to be confirming this message.
Government spending rose at a 2.9 percent annual rate last quarter rather than the initial estimate of 2 percent.
The latest GDP report showed after-tax corporate profits rose a muted 1.4 percent in the January-March period, compared with the fourth quarter. I would be surprised if the next quarter approaches that level of improvement.
According to the World Bank, the number of Chinese people subsisting on less than $1 a day has fallen from 490 million in 1981 to 88 million. During this period the country's output has increased more than eight fold and the average income has risen by 7% a year, passing $1,000 (currently £551) for the first time in 2003.
On Thursday, gold for June delivery rose $6.60 to close at $394.90 an ounce on the New York Mercantile Exchange. That's its highest closing level since April 27.
General Electric expects its 2005 revenues from China to increase 92 percent from last year to $5 billion, according to published reports in AFX News and the China Daily.
Banking and financial services company Washington Mutual Inc. has issued layoff notices to 170 employees at its Seattle headquarters.They will be effective on June 1.
Life must be a crap shoot for many Americans. According to the 2004 State of the States: The AGA Survey of Casino Entertainment, two million more Americans visited a casino in 2003 than in 2002. In fact, 53.4 million adult Americans went to casinos last year. These visitors made a total of 310 million trips to casinos in 2003, averaging 5.8 trips per person. According to statistics gathered primarily from state regulatory agencies, the 443 commercial casinos in 11 states nationwide generated more than $27 billion in gross gaming revenue in 2003, an increase of nearly 2% compared to 2002. From that revenue, casinos paid state and local governments $4.32 billion in direct gaming taxes. Employment figures rose slightly in 2003, with the industry providing jobs for 352,428 workers who earned more than $11.8 billion in salaries, including benefits and tips. Frank Fahrenkopf, Jr., president and CEO of the AGA, stated “what these numbers signify is that even when the country is facing an extended period of economic uncertainty, Americans still set aside a portion of their disposable income for fun and entertainment.”
U.S. Energy Secretary Abraham stated that the increase in output by Saudi Arabia would have a “significant effect on oil prices. We also have positive signs from Mexico, Nigeria, and Russia that production will rise to meet the global demand.” In response to those statements, light crude dropped about $1 to $39.75 per barrel. On the other hand, OPEC President Yusgiantoro stated OPEC probably would have to raise supply allocations by more than 2.3 million barrels per day or 10% to have much success in curbing speculation. In my view, rising prices will reduce demand and the latter will curtail speculation. Gasoline consumption needs to decline from the present 9 million barrels per day. It’s up to American drivers to make that happen.
While the Dow, S&P, and the Nasdaq have been focusing on oil prices, the dollar has resumed its downtrend. The dollar dropped to its lowest level versus the euro in over three weeks. The British pound rose to a six week high against the dollar. In addition, money keeps flowing from the dollar into the Japanese yen. Traders blame the weakness in the dollar on the rising threat of terrorism. That maybe a partial answer; however, with the demand for new houses dimming, rising inventories of SUVs, the impact of high gas prices on consumers, and the failure of jobless claims to experience a larger drop, there is a growing inkling that economic growth has topped out. The recent strength in the bond market appears to be confirming this message.
Government spending rose at a 2.9 percent annual rate last quarter rather than the initial estimate of 2 percent.
The latest GDP report showed after-tax corporate profits rose a muted 1.4 percent in the January-March period, compared with the fourth quarter. I would be surprised if the next quarter approaches that level of improvement.
According to the World Bank, the number of Chinese people subsisting on less than $1 a day has fallen from 490 million in 1981 to 88 million. During this period the country's output has increased more than eight fold and the average income has risen by 7% a year, passing $1,000 (currently £551) for the first time in 2003.
On Thursday, gold for June delivery rose $6.60 to close at $394.90 an ounce on the New York Mercantile Exchange. That's its highest closing level since April 27.
General Electric expects its 2005 revenues from China to increase 92 percent from last year to $5 billion, according to published reports in AFX News and the China Daily.
Banking and financial services company Washington Mutual Inc. has issued layoff notices to 170 employees at its Seattle headquarters.They will be effective on June 1.
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