2/26/05 Revisiting Reality
I spoke too soon. Only yesterday I mentioned the ray of sunshine from the Conference Board's Help-Wanted Ad Index. Bam! Wouldn't you know it. My smile only lasted one day. U.S. employers nationwide initiated 2,564 mass layoffs in January, which accounted for 263,952 initial claims for unemployment. This was an increase from 1,614 mass layoffs in December 2004 resulting in 161,271 job cuts. Importantly, it represented an increase from the year-ago period of January 2004 with 2,428 mass layoffs and 239,454 lost jobs. Wall Street preferred to focus on the revised GDP number for the fourth quarter. Due to a statistical error, exports to Canada had been understated. That error had been well noted some two weeks ago. It's often said that bull markets ignore bad news, and freqently the tape paints a montage of stock prices that doesn't reflect reality.
This coming Tuesday there will be more bad news. That's when the February auto sales will be released. They will be punk for GM and Ford. What else is new? The new might be additional production cuts that will be forthcoming.
I'm so delighted that the election in Iraq went so swimmingly. How is it that this blood-splattered country has left about 1,500 U.S. soldiers dead since we invaded Iraq in March 2003? The number of wounded has escalated so rapidly that it's difficult to get a handle on whether it's 14,000, 15,000, or more wounded over the past 23 months.
There are other bombs outside of Iraq. In 2005, bank credit has exploded in the U.S. to the tune of $180 billion. Fortunately, the Fed's printing press has slowed down into the mid-single digits. Unfortunately, inflation has not been so kind, and this fact is reflected in the Goldman Sachs Commodity Index being up 13.7% in 2005. This index has been dwarfed by the 25% rise in ExxonMobil stock in the first seven weeks of 2005. This rise may help to explain in part the recent gain in the Dow and the S&P 500.
The auto industry in China may have hit a road bump; however, infrastructure demands are alive and well. The China Electricity Council stated "China's consumption of electricity this year may rise 12%."
According to Mark Lundeen, in 1925, the U.S. had only $3.96 billion in coins and paper dollars in circulation. Eighty years later, in 2005, there was a slight upward adjustment to $750.27 billion or 187 more dollars circulating this year than for every dollar in 1925. Let's add the change in population to the mix. In 1925 there were 116 million people in the U.S. and now there are 294 million. Simply put, in 1925, there was $34,000 per person in circulation and now there is $2,550,000 per person. That number grows daily, and so does each citizen's share of our exploding national debt. Should anyone care? Not when your home is making you rich and you can use the increasing equity for ATM purposes. That's called reality in real-time.
Saturday, February 26, 2005
Friday, February 25, 2005
Housing
2/25/05 The news coming out of the housing industry simply blows me away. The CEO of Pulte Homes stated he believes his company will record 20% annual growth over the next three years. That's after knocking the cover off the ball for the past three years. It gets better. Coldwell Banker announced its 2004 sales of U.S. luxury homes valued at $1 million or more surged to an all-time high of $35.5 billion, surpassing its previous record of $23.3 billion set in 2003, a 52% increase in luxury sales. Coldwell Banker's CEO stated "the luxury real estate market continues to thrive. We expect the luxury home sales market to remain solid throughout 2005." Let's take a look at an example of today's market---below the $1 million luxury level. In San Francisco this week, not in a prime neighborhood, a 975 sq. ft. apartment was listed for sale at $649,000. The seller received two-dozen bids, and four were in excess of $850,000. In another example, a luxury home in a prime neighborhood is being offered at approximately $1,375 a sq. ft. As Coldwell Banker's CEO remarked, there is "high demand from baby boomers who have more disposable income than any other previous generation, and continued attractive interest rates."
I committed two very stupid mistakes. As I mentioned several times, while the dotcom stocks were in their frenzy period, I was buying housing stocks. No one wanted them. They were like watching paint dry for months and months and months. I did make three and four and in one case five times my investment. I sold way too soon. Despite the old saying "you can't get hurt
taking a profit," I feel stupid every day looking at the prices for Toll, Pulte, Beazer, and four others. The other mistake was misreading the long-term housing potential in the U.S. Easy credit, record low interest rates, baby boomer demand, and foreigners buying because the weak dollar made our real estate increasingly attractive---generated a housing boom. Despite studying everyday, it became increasingly difficult to find other stocks with better risk/reward and value than the housing stocks I had sold.
Finally, yesterday there was some good news out of the Conference Board on their Help-Wanted Advertising Index. It increased 3 points in January to 41, up from 38 one year ago. It was the first ray of sunshine in some time.
The Varroa mite has been attacking Honey bee larvae in their hives. Some beekeepers report that 50% or more of their cultivated hives have been destroyed. In California, where the 2004 estimated farm value of the almond crop was almost $2 billion, the shortage of bees is potentially catastrophic. Almond trees must have Honey bee pollination in order to bear its nut. The mites have developed a resistance to the present efforts to control their population. As it stands today, beekeepers are in a tough fight. Lee Heine, Chairman of the Board of the National Honey Board, stated "usually, a few winners can emerge in any agricultural shortfall situation. Right now there are absolutely no winners except, maybe for the mite itself."
France's unemployment rate rose to 10%, a 5-year high.
Yesterday, the Treasury auctioned $24 billion in 2-year notes. The response was muted and the yield was 3.498%.
UPS is closing its Dayton hub. A total of 1,400 jobs will be lost. Where is Pastor Parsley now?
The Commerce Dept (what commerce do they generate?) reported that, in January, there was a 5.3% drop in orders for transportation goods.
Australia's Treasury Secretary Ken Henry spoke to a meeting of Asian treasurers in Sydney yesterday. He fears the U.S is heading for a financial crash because of the record trade and budget deficits. He likened the enormous flows of money pouring into the U.S. to "worryingly reminiscent of Federal Reserve chairman Alan Greenspan's warning in 1996 of irrational exuberance in U.S. stocks." Henry stated one could not tell how long it would keep going, but it would burst eventually. From recent comments, Toll and Pulte and Coldwell Banker believe housing will remain strong for some time. Only the Shadow knows when the bubble will burst.
I committed two very stupid mistakes. As I mentioned several times, while the dotcom stocks were in their frenzy period, I was buying housing stocks. No one wanted them. They were like watching paint dry for months and months and months. I did make three and four and in one case five times my investment. I sold way too soon. Despite the old saying "you can't get hurt
taking a profit," I feel stupid every day looking at the prices for Toll, Pulte, Beazer, and four others. The other mistake was misreading the long-term housing potential in the U.S. Easy credit, record low interest rates, baby boomer demand, and foreigners buying because the weak dollar made our real estate increasingly attractive---generated a housing boom. Despite studying everyday, it became increasingly difficult to find other stocks with better risk/reward and value than the housing stocks I had sold.
Finally, yesterday there was some good news out of the Conference Board on their Help-Wanted Advertising Index. It increased 3 points in January to 41, up from 38 one year ago. It was the first ray of sunshine in some time.
The Varroa mite has been attacking Honey bee larvae in their hives. Some beekeepers report that 50% or more of their cultivated hives have been destroyed. In California, where the 2004 estimated farm value of the almond crop was almost $2 billion, the shortage of bees is potentially catastrophic. Almond trees must have Honey bee pollination in order to bear its nut. The mites have developed a resistance to the present efforts to control their population. As it stands today, beekeepers are in a tough fight. Lee Heine, Chairman of the Board of the National Honey Board, stated "usually, a few winners can emerge in any agricultural shortfall situation. Right now there are absolutely no winners except, maybe for the mite itself."
France's unemployment rate rose to 10%, a 5-year high.
Yesterday, the Treasury auctioned $24 billion in 2-year notes. The response was muted and the yield was 3.498%.
UPS is closing its Dayton hub. A total of 1,400 jobs will be lost. Where is Pastor Parsley now?
The Commerce Dept (what commerce do they generate?) reported that, in January, there was a 5.3% drop in orders for transportation goods.
Australia's Treasury Secretary Ken Henry spoke to a meeting of Asian treasurers in Sydney yesterday. He fears the U.S is heading for a financial crash because of the record trade and budget deficits. He likened the enormous flows of money pouring into the U.S. to "worryingly reminiscent of Federal Reserve chairman Alan Greenspan's warning in 1996 of irrational exuberance in U.S. stocks." Henry stated one could not tell how long it would keep going, but it would burst eventually. From recent comments, Toll and Pulte and Coldwell Banker believe housing will remain strong for some time. Only the Shadow knows when the bubble will burst.
Thursday, February 24, 2005
In Response To A Request
This morning I received a request from Charles Kirk of the Kirk Report to create a permalink for my blog. As I mentioned to Charles, I never heard that word before he mentioned it. I am not technically proficient. I hope I have done this properly. The link should be as follows:
http://melduke.blogspot.com/atom.xml
If it was not done properly, I trust I will be informed.
http://melduke.blogspot.com/atom.xml
If it was not done properly, I trust I will be informed.
permalinks
This morning I received a request from Charles Kirk of the Kirk Report to create a permalink for my blog. As I mentioned to Charles, I never heard that word before he mentioned it. I am not technically proficient. I hope I have done this properly. The link should be as follows:
http://melduke.blogspot.com/atom.xml
If it was not done properly, I trust I will be informed.
http://melduke.blogspot.com/atom.xml
If it was not done properly, I trust I will be informed.
2/24/05 Don't Be A Putz
If wage gains trail inflation, then there is a problem. Yesterday, the BLS announced that real average weekly earnings from December 2004 to January 2005 fell by 0.2% after seasonal adjustment. From January 2004 to January 2005, after deflation by the CPI-W, average weekly earnings decreased by 0.7%. How can anyone be optimistic about inflationary trends when earnings for both full-time and part-time workers can't hold their own in our consumer-based economy. Do you really believe that one can ATM the home or depend on the carry trade well into the future. Are you a putz?
If you listen to the Wal-Mart bashers, you'd think the company is responsible for our trade deficit. Lee Scott, their CEO, spoke yesterday to a group of business leaders. He stated that 270 million shoppers entered their 3,500 plus stores last year. He related that the company acted as the bargaining agent for these families and that Wal-Mart saves its customers up to $100 billion a year. He stated "these savings are a lifeline for millions of middle and lower-income families who live from payday to payday. In effect, it gives them a raise every time they shop with us." Scott went on and related some other important facts. Last year, Wal-Mart collected $10.2 billion in state and local taxes, money that went back to communities for police, fire protection, and schools. In 2005, the company will create an estimated 100,000 new jobs in the U.S., up from 83,000 in 2004. Do you know any other company creating anywhere close to 100,000 jobs? Not many companies employ 100,000 people. Get this! Wal-Mart purchases goods from more than 68,000 U.S. suppliers and supports more than 3.5 million supplier jobs. In 2004, the company spent $137.5 billion with U.S. suppliers. Don't be a putz. Stop bashing Wal-Mart.
You had better think twice before believing $51 plus crude does not make a difference. Cars are a vital part of our economy. According to the annual California State Economic Impact Report, in 2004 California's franchised new car dealers generated 20% of all retail sales in the state. Total revenue from goods and services sold at California franchised dealerships was almost $96 billion in 2004 (more than the GDP in most countries) and total full and part-time employment stood at 149,523. Dealership payrolls were over $9.4 billion, and California dealers spent nearly $12 billion for goods and services from other businesses in the state. Franchised dealers in California paid or collected over $7 billion in federal, state, and local taxes on over $699 billion in taxable sales for 2004.
According to a new study by the Center on Budget and Policy Priorities, state and local governments could lose $214 billion over the next five years under the proposed Bush budget plan. Losses would be in federal grants for education, housing transportation, and other domestic programs plus forfeiting federal funds for veterans' health care, parks, research, and law enforcement.
Yesterday, France sold a 50-year bond. Greece is planning to issue a 30-year government bond. Britain is studying the possibility of issuing 40 and 50-year gilts. Meanwhile, the average duration of U.S. government debt is 3 years. The Fed Chairman has warned repeatedly that interest rates will rise in the U.S. If so, why is our treasury department not locking in these record low yields for 30 years? Why be a putz and fight the Fed?
According to the Financial Times, EADS is closing in on a $25 billion UK air tanker deal. Boeing has told our government that they are the only supplier capable of providing air tankers. I guess they never considered Airbus a competitor. When you underestimate the competition, then you are a putz.
If wage gains trail inflation, then there is a problem. Yesterday, the BLS announced that real average weekly earnings from December 2004 to January 2005 fell by 0.2% after seasonal adjustment. From January 2004 to January 2005, after deflation by the CPI-W, average weekly earnings decreased by 0.7%. How can anyone be optimistic about inflationary trends when earnings for both full-time and part-time workers can't hold their own in our consumer-based economy. Do you really believe that one can ATM the home or depend on the carry trade well into the future. Are you a putz?
If you listen to the Wal-Mart bashers, you'd think the company is responsible for our trade deficit. Lee Scott, their CEO, spoke yesterday to a group of business leaders. He stated that 270 million shoppers entered their 3,500 plus stores last year. He related that the company acted as the bargaining agent for these families and that Wal-Mart saves its customers up to $100 billion a year. He stated "these savings are a lifeline for millions of middle and lower-income families who live from payday to payday. In effect, it gives them a raise every time they shop with us." Scott went on and related some other important facts. Last year, Wal-Mart collected $10.2 billion in state and local taxes, money that went back to communities for police, fire protection, and schools. In 2005, the company will create an estimated 100,000 new jobs in the U.S., up from 83,000 in 2004. Do you know any other company creating anywhere close to 100,000 jobs? Not many companies employ 100,000 people. Get this! Wal-Mart purchases goods from more than 68,000 U.S. suppliers and supports more than 3.5 million supplier jobs. In 2004, the company spent $137.5 billion with U.S. suppliers. Don't be a putz. Stop bashing Wal-Mart.
You had better think twice before believing $51 plus crude does not make a difference. Cars are a vital part of our economy. According to the annual California State Economic Impact Report, in 2004 California's franchised new car dealers generated 20% of all retail sales in the state. Total revenue from goods and services sold at California franchised dealerships was almost $96 billion in 2004 (more than the GDP in most countries) and total full and part-time employment stood at 149,523. Dealership payrolls were over $9.4 billion, and California dealers spent nearly $12 billion for goods and services from other businesses in the state. Franchised dealers in California paid or collected over $7 billion in federal, state, and local taxes on over $699 billion in taxable sales for 2004.
According to a new study by the Center on Budget and Policy Priorities, state and local governments could lose $214 billion over the next five years under the proposed Bush budget plan. Losses would be in federal grants for education, housing transportation, and other domestic programs plus forfeiting federal funds for veterans' health care, parks, research, and law enforcement.
Yesterday, France sold a 50-year bond. Greece is planning to issue a 30-year government bond. Britain is studying the possibility of issuing 40 and 50-year gilts. Meanwhile, the average duration of U.S. government debt is 3 years. The Fed Chairman has warned repeatedly that interest rates will rise in the U.S. If so, why is our treasury department not locking in these record low yields for 30 years? Why be a putz and fight the Fed?
According to the Financial Times, EADS is closing in on a $25 billion UK air tanker deal. Boeing has told our government that they are the only supplier capable of providing air tankers. I guess they never considered Airbus a competitor. When you underestimate the competition, then you are a putz.
Wednesday, February 23, 2005
2/23/05 Yesterday Was Not Just Another Day
It was more than just the Dow having its worst drop since May 19, 2003 or crude rising above $51 a barrel or gold, silver, and the CRB rising smartly to multi-week highs or consumer confidence falling or interest rates rising or the dollar dropping or large layoffs being announced or timid projections provided for this year's first quarter. It was a combination of all those developments in one single day, and the reaction in equities took place on large volume. You will be hearing and reading that stocks are oversold on a technical basis. So what. The idea is to keep your eye on the ball. Risks have been increasing for weeks. On strength, I continue to suggest cutting back on exposure and increasing liquid assets.
The CPI will be released this morning. It will not reflect that Rio Tinto increased iron ore prices by 72% due to "continuing growth in steel consumption, particularly in China." It will not reflect the recent price rise in soybeans due to dry weather in Brazil and Argentina, which together grow 45% of the world's soybeans. In 2004, prices for soybeans declined about 37% due to oversupply. That situation will be quite different this year. Despite the statements from the Fed, inflation is alive and well, and that fact is bad for stocks and bonds.
Lands' End will cut 375 jobs. Celestica will close its Mt. Pleasant, Iowa plant and 334 jobs will be lost. Acuity will cut 1,100 jobs in Lorain, Ohio. There's nothing Pastor Parsley can do about that.
The first quarter for Lowe's will be below current Wall Street estimates.
Net long exposure in gold and silver is on the rise. That is reflected in the latest weekly COMEX figures.
The Conference Board's February survey revealed that consumers' outlook for the next six months lost ground. Those anticipating business conditions to improve declined to 17.8% from 22% in January. Consumers were less optimistic about the availability of jobs and any improvement in the months ahead for their incomes.
On an annual basis, Wal-Mart spends more than $1 billion on electricity for air-conditioning and lighting for their stores. In Texas, the company has experimented with buying its own power by establishing an energy trading desk. It has been quite successful, and cost reductions have been achieved. This strategy may be expanded to Arkansas, Lousiana, and California.
Last week the Fed Chairman appeared before the House Financial Services Committee. There, he encountered Ron Paul of Texas. As Rep. Paul noted, the Chairman "utterly repudiated the arguments he made 40 years ago...If he was so wrong in the past, why should we listen to him now?...First, the Federal Reserve does not mimic a gold standard by any measure...Second, inflation is a much greater problem than the federal government admits...Third, Fed policies do indeed have adverse political ramifications...It's not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves... Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution."
It was more than just the Dow having its worst drop since May 19, 2003 or crude rising above $51 a barrel or gold, silver, and the CRB rising smartly to multi-week highs or consumer confidence falling or interest rates rising or the dollar dropping or large layoffs being announced or timid projections provided for this year's first quarter. It was a combination of all those developments in one single day, and the reaction in equities took place on large volume. You will be hearing and reading that stocks are oversold on a technical basis. So what. The idea is to keep your eye on the ball. Risks have been increasing for weeks. On strength, I continue to suggest cutting back on exposure and increasing liquid assets.
The CPI will be released this morning. It will not reflect that Rio Tinto increased iron ore prices by 72% due to "continuing growth in steel consumption, particularly in China." It will not reflect the recent price rise in soybeans due to dry weather in Brazil and Argentina, which together grow 45% of the world's soybeans. In 2004, prices for soybeans declined about 37% due to oversupply. That situation will be quite different this year. Despite the statements from the Fed, inflation is alive and well, and that fact is bad for stocks and bonds.
Lands' End will cut 375 jobs. Celestica will close its Mt. Pleasant, Iowa plant and 334 jobs will be lost. Acuity will cut 1,100 jobs in Lorain, Ohio. There's nothing Pastor Parsley can do about that.
The first quarter for Lowe's will be below current Wall Street estimates.
Net long exposure in gold and silver is on the rise. That is reflected in the latest weekly COMEX figures.
The Conference Board's February survey revealed that consumers' outlook for the next six months lost ground. Those anticipating business conditions to improve declined to 17.8% from 22% in January. Consumers were less optimistic about the availability of jobs and any improvement in the months ahead for their incomes.
On an annual basis, Wal-Mart spends more than $1 billion on electricity for air-conditioning and lighting for their stores. In Texas, the company has experimented with buying its own power by establishing an energy trading desk. It has been quite successful, and cost reductions have been achieved. This strategy may be expanded to Arkansas, Lousiana, and California.
Last week the Fed Chairman appeared before the House Financial Services Committee. There, he encountered Ron Paul of Texas. As Rep. Paul noted, the Chairman "utterly repudiated the arguments he made 40 years ago...If he was so wrong in the past, why should we listen to him now?...First, the Federal Reserve does not mimic a gold standard by any measure...Second, inflation is a much greater problem than the federal government admits...Third, Fed policies do indeed have adverse political ramifications...It's not enough to question the wisdom of Mr. Greenspan. Americans should question why we have a central bank at all, and whose interests it serves... Americans should not tolerate the manipulation of our economy and the inflation of our currency by an unaccountable institution."
Tuesday, February 22, 2005
2/22/05 Diversifying
Most money managers believe in a diversified portfolio. For several years I have written about the non-diversified global central bank currency holdings, which have used the U.S. dollar as its core dependency. Slowly but surely, diversification is on the move. South Korea, our ally, has the world's fourth largest forex holdings---after Japan, China, and Taiwan. The Bank of Korea announced it plans to diversify its reserves beyond dollar holdings. In addition, it should be noted that information from our treasury department lists Korean investors as the fifth-largest entity in our treasury bonds. Not surprisingly, our currency had its worst drop in more than four months. There will be many other central banks following in the footsteps of the Bank of Korea. You can expect many bad days for the dollar in the future. Our twin tower deficits cement that further decline.
The sharp decline in the dollar was accompanied by a further rise in crude oil to $49.35 a barrel, and this ensures another price increase at the pump. Cold weather was given as the primary reason for the rise. It is well to remember that currently oil purchases are made in dollars. Every time the dollar drops, as it did today, the producer of oil sees the value of the cash receipts diminish. A rise in the price of oil helps to offset the drop in the dollar.
Winn-Dixie Stores filed for Chapter 11 bankruptcy. The company has 920 stores. By comparison, Whole Foods Markets will open its new corporate headquarters in Austin on March 3 as well as a landmark 80,000 square foot store in Austin. After 25 years, the company is still growing smartly and soon there will be 200 stores. Of course, the stock at $100 or so per share does reflect that growth. Shopping in their landmark store will not be cheap, but it may prove cheaper than buying the stock at these levels.
Not many companies lift their yearly profit guidance from 30 to 40%. That's not a stretch with the net profit in the six months ended December 31 up 73% on revenue growth of 37%. The company is Billabong International, the Australian surfware and apparel outfit. With annual profits closing in on $120 million, sales will begin to approach $1 billion. The stock had a good rise on the news, but the future looks bright. As long as there are ocean waves, there probably will be surfers with Billabong wear.
Talking about water, for over 25 years, I have had place in my portfolio for companies serving the water industry. As a commodity, I continue to feel it is the most underpriced global must-have item. That brings me to Great Lakes Chemical (GLK). In 1993 and 1994 the stock sold over 70. In 1996 it appraoched 70. Between 2002 and the present, the stock has been trading in a range of roughly 20 to 30 and now is close to the mid-point of the range. The company makes specialty chemical solutions that treat and purify water, waterless fire protection systems, cleaning products, and various pest control and flame retardant items. At some point, converting salt water to purified drinking water will become a necessity for the world's growing population. There just isn't enough water to go around. GLK has recently had some managerial changes and it has been beset by rising commodity costs. It was only recently that the company announced various product price increases. The stock has not been in my portfolio for about 8 years, but a closer look may be in order. They should start to do better and their $1.6 billion in sales should grow in 2005. This should be viewed as a 2 to 3 year holding for a patient investor. If you watch the paint dry, GLK is not for you. It's more likely to catch Buffett's eye. He was a stockholder some years back.
Most money managers believe in a diversified portfolio. For several years I have written about the non-diversified global central bank currency holdings, which have used the U.S. dollar as its core dependency. Slowly but surely, diversification is on the move. South Korea, our ally, has the world's fourth largest forex holdings---after Japan, China, and Taiwan. The Bank of Korea announced it plans to diversify its reserves beyond dollar holdings. In addition, it should be noted that information from our treasury department lists Korean investors as the fifth-largest entity in our treasury bonds. Not surprisingly, our currency had its worst drop in more than four months. There will be many other central banks following in the footsteps of the Bank of Korea. You can expect many bad days for the dollar in the future. Our twin tower deficits cement that further decline.
The sharp decline in the dollar was accompanied by a further rise in crude oil to $49.35 a barrel, and this ensures another price increase at the pump. Cold weather was given as the primary reason for the rise. It is well to remember that currently oil purchases are made in dollars. Every time the dollar drops, as it did today, the producer of oil sees the value of the cash receipts diminish. A rise in the price of oil helps to offset the drop in the dollar.
Winn-Dixie Stores filed for Chapter 11 bankruptcy. The company has 920 stores. By comparison, Whole Foods Markets will open its new corporate headquarters in Austin on March 3 as well as a landmark 80,000 square foot store in Austin. After 25 years, the company is still growing smartly and soon there will be 200 stores. Of course, the stock at $100 or so per share does reflect that growth. Shopping in their landmark store will not be cheap, but it may prove cheaper than buying the stock at these levels.
Not many companies lift their yearly profit guidance from 30 to 40%. That's not a stretch with the net profit in the six months ended December 31 up 73% on revenue growth of 37%. The company is Billabong International, the Australian surfware and apparel outfit. With annual profits closing in on $120 million, sales will begin to approach $1 billion. The stock had a good rise on the news, but the future looks bright. As long as there are ocean waves, there probably will be surfers with Billabong wear.
Talking about water, for over 25 years, I have had place in my portfolio for companies serving the water industry. As a commodity, I continue to feel it is the most underpriced global must-have item. That brings me to Great Lakes Chemical (GLK). In 1993 and 1994 the stock sold over 70. In 1996 it appraoched 70. Between 2002 and the present, the stock has been trading in a range of roughly 20 to 30 and now is close to the mid-point of the range. The company makes specialty chemical solutions that treat and purify water, waterless fire protection systems, cleaning products, and various pest control and flame retardant items. At some point, converting salt water to purified drinking water will become a necessity for the world's growing population. There just isn't enough water to go around. GLK has recently had some managerial changes and it has been beset by rising commodity costs. It was only recently that the company announced various product price increases. The stock has not been in my portfolio for about 8 years, but a closer look may be in order. They should start to do better and their $1.6 billion in sales should grow in 2005. This should be viewed as a 2 to 3 year holding for a patient investor. If you watch the paint dry, GLK is not for you. It's more likely to catch Buffett's eye. He was a stockholder some years back.
Monday, February 21, 2005
2/21/05 Finishing Touches
Just because acquiring another company creates larger market share, doesn't mean the combined company will become a fiercer competitor. Dell was delighted after HP acquired Compaq. Up until now, Teva has been the number one generics manufacturer. Novartis announced buying Hexal AG and Eon Labs for $8.3 billion in cash. Novartis entered the generics business in 1996 by purchasing Sandoz. The latter's generic division was its slowest grower last year. With today's announcement, Novartis will become the world's largest generics manufacturer, and will best Teva in market share. I'm sure Teva is delighted with the Novartis purchase. In less than 5 years, generics will become a $100 billion a year business. The best will continue to grow market share. Teva will, in my opinion, outperform Novartis in years to come.
In a recent survey commisssioned by Visa of 800 consumers earning at least $125,000 in annual household income (placing them in the top 7% of all Americans), 72% of the high-income earners stated they clip coupons, compared with the national average of 65%, and 66% said they shop at discount stores, compared with 47% of consumers on average.
Comptroller General David Walker of the GAO discussing Social Security: "The left hand owes the right hand, and that has legal, political, and moral significance. But it doesn't have any economic significance whatsoever. There are no stocks or bonds or real estate in the trust fund. It has nothing down...The trust fund gives a very false sense of security about where we are and how much time we have." A court of law might disagree with Walker. The U.S has $1.6 trillion in obligations to Social Security, and they will be funded and paid. Those monies were taken from taxpayers and their employers. Either that, or the U.S. will be in default on its debt.
Did you see the latest Univ. of Michigan consumer satisfaction index? It showed the first year-to-year drop in satisfaction with e-retail, such as, with Amazon, eBay, and Charles Schwab. We need to monitor this situation.
Just because acquiring another company creates larger market share, doesn't mean the combined company will become a fiercer competitor. Dell was delighted after HP acquired Compaq. Up until now, Teva has been the number one generics manufacturer. Novartis announced buying Hexal AG and Eon Labs for $8.3 billion in cash. Novartis entered the generics business in 1996 by purchasing Sandoz. The latter's generic division was its slowest grower last year. With today's announcement, Novartis will become the world's largest generics manufacturer, and will best Teva in market share. I'm sure Teva is delighted with the Novartis purchase. In less than 5 years, generics will become a $100 billion a year business. The best will continue to grow market share. Teva will, in my opinion, outperform Novartis in years to come.
In a recent survey commisssioned by Visa of 800 consumers earning at least $125,000 in annual household income (placing them in the top 7% of all Americans), 72% of the high-income earners stated they clip coupons, compared with the national average of 65%, and 66% said they shop at discount stores, compared with 47% of consumers on average.
Comptroller General David Walker of the GAO discussing Social Security: "The left hand owes the right hand, and that has legal, political, and moral significance. But it doesn't have any economic significance whatsoever. There are no stocks or bonds or real estate in the trust fund. It has nothing down...The trust fund gives a very false sense of security about where we are and how much time we have." A court of law might disagree with Walker. The U.S has $1.6 trillion in obligations to Social Security, and they will be funded and paid. Those monies were taken from taxpayers and their employers. Either that, or the U.S. will be in default on its debt.
Did you see the latest Univ. of Michigan consumer satisfaction index? It showed the first year-to-year drop in satisfaction with e-retail, such as, with Amazon, eBay, and Charles Schwab. We need to monitor this situation.
Saturday, February 19, 2005
2/20/05 More On Inflation
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
2/20/05 More On Inflation
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
2/20/05 More On Inflation
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
2/20/05 More On Inflation
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
According to the BLS, from January 2004 to January 2005, finished goods prices increased 4.2 percent. During the same period, the finished energy goods index jumped 9.8 percent, prices for finished goods other than foods and energy rose 2.7%, and
the index for finished consumer foods went up 4.1%. At the earlier stages of processing, prices for intermediate goods moved up 8.7% during the 12 months ended January 2005, while the crude goods index gained 10.8%. Simply put, the rise in inflation last month was not a one-month aberration. Inflation has been simmering in the pipeline for months. In my view, longer-term treasury yields do not adequately reflect the current rate of inflation. Holding these instruments entails substantial risk. For what it’s worth, Greg Mankiw predicts that the yield on 10-year Treasury bonds will rise to 4.6% this year from the present 4.27% and next year to 5.2%.
As our population seasons(ages), the BLS has provided information showing that spending drops rather significantly(with the exception of health care and reading material) between the years of 49 and 59. In addition, the BLS is projecting a significant increase in those in the workplace between 55 and 74 years of age.
During 2005, Eddie Bauer will close 34 of their Home stores and Circuit City will close 19 of their Superstores.
Most of the health headlines this week went to Merck and Pfizer. Actually, the information coming out of the FDA panel was not unexpected. It might be worthwhile to keep an eye on further news coming out of Dendreon (DNDN) of Seattle. I have been monitoring their progress for the past five years. I like their approach for the treatment of prostate and breast cancer in that it stimulates a patient’s immune system against the cancer rather than using chemotherapy.
2/19/05 Bring It On
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
2/19/05 Bring It On
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
2/19/05 Bring It On
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
In the past week, M3 declined $25 billion; however it has still risen 6.4% over the past 12 months. Home equity lines of credit increased 80.3% to $421.4 billion in 2004.
Fed Chairman: “I do not think that you could claim that the central bank is facilitating the expansion of expenditures in this country.”
B.F. Skinner: “The real problem is not whether machines think but whether men do.”
The core rate of inflation, which excludes food and energy, surged 0.8% in January. It was the biggest rise in 74 months. Core producer prices rose 2.7% in January 2005 over January 2004, the largest jump in 112 months. Two-year treasury bonds rose in yield to 3.43%, close to the highest yield in 3 years. One must still ask how long 10-year treasury bonds can stay at 4.27% and 30-year at 4.65%. Maybe there is a clue. Inflation is clearly on the rise. The Goldman Sachs Commodities index is up 7.6% year-to-date. The place to make consistent money has been in that index. With crude at $48.35 a barrel and copper rising along with other commodities, longer-term bond yields will reflect rising commodity prices. If I were managing a portfolio for other investors, I would want to come to grips with the level of risk in long duration debt instruments.
Mark Minasi: “If McDonalds were run like a software company, one out of every hundred Big Macs would give you food poisoning--- and the response would be, ‘we’re sorry, here’s a coupon for two more.’”
The Semiconductor Equipment and Materials International (SEMI) trade association reported a book-to-bill ratio of 0.80. The bookings figure is 18% below the revised December 2004 level and 18% below the orders posted in January 2004. SEMI stated that “the three-month average bookings figure for new semiconductor equipment is now at the lowest level since November 2003. Total bookings declined sharply in January and are now about 37% below the cyclic peak observed in June 2004.”
According to EmergingPortfolio.com, for the two weeks ending February 16, emerging stock funds received an inflow of $2.6 billion, the most in five years.
Marsh & McLennan is the world’s largest insurance broker. Globally, they have 40,000 employees. Next week, they may announce that 7,000 employees will lose their jobs.
Friday, February 18, 2005
2/18/05 A Collision Course
From a square miles perspective, China and the United States are very similar in size. That’s where the similarity begins and ends. For today, I am not including India in this discussion. As we know, China has over four times our population. We have about ten times the amount of cars as does China and consume three times as much oil. However, after taking the consumption of oil off the table, the comparison with China gets quite one-sided. The fact is the American consumer is single-handedly fueling China’s transformation to an industrialized nation. Our consumption of Chinese exports provides the $162 billion surplus China requires to buy goods from other nations. In fact, China could run a small current account deficit this year. Our consumption enables China to buy its needed grain, soybeans, iron ore, coal, copper, steel, aluminum, platinum, nickel, zinc, wood, and meat. As the Earth Policy Institute noted, China is the world’s largest consumer of grain, meat, coal, and steel. With China’s economy growing at a 9% plus annual rate, this trend towards increasing per capita consumption can only grow in future years. This generates demands on supply and raises the inflationary flag higher. To put matters in perspective, Mainland Marketing Research of China stated their industrial production rose in January at the slowest pace in three years. It ONLY rose 8.9%. In April 2004 the rate was 19%. Not surprisingly, copper traded yesterday at a 16-year high. China is using more and more copper for electrical cables and wiring in order to produce additional power. According to Merrill Lynch, global copper demand will exceed production by 172,000 tons this year. In my view, that estimate may prove quite conservative. Not surprisingly, Phelp Dodge’s earnings have been a prime beneficiary of higher copper prices. At $99 per share, the stock is still selling at less than 9 times 2005 estimated earnings. Another beneficiary is Melbourne-based BHP Billton. Phelps Dodge reminds me somewhat of the home builders. The production and sale of homes has been under-estimated for over one year. I have been guilty of that. I don’t believe anyone can truly state with confidence just how much China’s demand for commodities will grow from month to month--- much less from year to year. A safe statement is the demand will increase over the long-term. In sum, the best way to place a governor on future demand is for the American consumer to cut back on China’s exports to the U.S. That will prove beneficial to our current account deficit, the pressure on our dollar, and inflationary trends going forward.
Rep. Ron Paul: “Many Americans don’t realize that Social Security benefits were not taxed until the 1980s. When the program was created in the 1930s, Congress never intended to treat Social Security benefits as taxable income. Those benefits are funded by taxes in the first place, so it’s nonsensical to tax them as ordinary income to raise revenue. The whole process is nothing more than a circular subterfuge that allows Congress to reduce Social Security benefits by stealth. Nobody in Congress claims they want to reduce benefits, but that’s exactly what happens when benefits are taxes. The spending culture in Washington is the real problem…America must vote big-spending politicians from both parties out of Congress.” Paul has introduced the “Senior Citizens Tax Elimination Act.”
Thomas Jefferson: “The national progress of things is for government to gain ground and for liberty to yield.”
Following two straight months of improvement in November and December, the Conference Board’s Index of Leading Economic Indicators declined 0.3% in January. Prior to November and December, the index had declined for five consecutive months. In fact, over the past eight months, the index has been expanding more slowly than its 1.5 percent long-term average growth rate. Simply put, the expansion is also trailing the current rate of inflation. Realistically, there has been contraction and not expansion because, during the six-month span through January, the leading index decreased 0.3%. Conference Board economist Ken Goldstein stated “ the larger concern remains cautious. Business concerns about the direction of cash flow could lead to cautious decisions about hiring and rebuilding inventory.” I think Goldstein might find that rebuilding inventory has remained at muted levels for months and net permanent hiring growth has been basically non-existent for the past four years.
The headlines for the Philly Fed manufacturing sector did not describe the employment index. It was found in the third paragraph down in the news release. It stated that the employment index decreased from a reading of 17.0 in January to 12.3 in February, its lowest point in 15 months.
J.E. Wilson Advisors President James Wilson: “People who are smarting from investment losses or just generally disappointed by relatively low returns are the first to fail to appreciate the importance of liquidity. You can rebalance your portfolio to take into account changing circumstances. But that’s not so easy when you have most of your money tied up in real estate and the ‘bubble’ bursts ---or, at least, deflates a bit.”
If Congress and the President were truly serious about spending disciple, they would once again adopt PAYGO budget rules for all spending, and that includes every area of entitlement spending.
President Bush: “"I signed Medicare reform proudly, and any attempt to limit the choices of our seniors and to take away their prescription drug coverage under Medicare will meet my veto. This law is a landmark achievement in American health care.” Actually, it is inept legislation crafted out of ignorance accompanied by a non-caring mentality.
George Washington: “ No generation has a right to contract debts greater than can be paid off during the course of its own existence.”
From a square miles perspective, China and the United States are very similar in size. That’s where the similarity begins and ends. For today, I am not including India in this discussion. As we know, China has over four times our population. We have about ten times the amount of cars as does China and consume three times as much oil. However, after taking the consumption of oil off the table, the comparison with China gets quite one-sided. The fact is the American consumer is single-handedly fueling China’s transformation to an industrialized nation. Our consumption of Chinese exports provides the $162 billion surplus China requires to buy goods from other nations. In fact, China could run a small current account deficit this year. Our consumption enables China to buy its needed grain, soybeans, iron ore, coal, copper, steel, aluminum, platinum, nickel, zinc, wood, and meat. As the Earth Policy Institute noted, China is the world’s largest consumer of grain, meat, coal, and steel. With China’s economy growing at a 9% plus annual rate, this trend towards increasing per capita consumption can only grow in future years. This generates demands on supply and raises the inflationary flag higher. To put matters in perspective, Mainland Marketing Research of China stated their industrial production rose in January at the slowest pace in three years. It ONLY rose 8.9%. In April 2004 the rate was 19%. Not surprisingly, copper traded yesterday at a 16-year high. China is using more and more copper for electrical cables and wiring in order to produce additional power. According to Merrill Lynch, global copper demand will exceed production by 172,000 tons this year. In my view, that estimate may prove quite conservative. Not surprisingly, Phelp Dodge’s earnings have been a prime beneficiary of higher copper prices. At $99 per share, the stock is still selling at less than 9 times 2005 estimated earnings. Another beneficiary is Melbourne-based BHP Billton. Phelps Dodge reminds me somewhat of the home builders. The production and sale of homes has been under-estimated for over one year. I have been guilty of that. I don’t believe anyone can truly state with confidence just how much China’s demand for commodities will grow from month to month--- much less from year to year. A safe statement is the demand will increase over the long-term. In sum, the best way to place a governor on future demand is for the American consumer to cut back on China’s exports to the U.S. That will prove beneficial to our current account deficit, the pressure on our dollar, and inflationary trends going forward.
Rep. Ron Paul: “Many Americans don’t realize that Social Security benefits were not taxed until the 1980s. When the program was created in the 1930s, Congress never intended to treat Social Security benefits as taxable income. Those benefits are funded by taxes in the first place, so it’s nonsensical to tax them as ordinary income to raise revenue. The whole process is nothing more than a circular subterfuge that allows Congress to reduce Social Security benefits by stealth. Nobody in Congress claims they want to reduce benefits, but that’s exactly what happens when benefits are taxes. The spending culture in Washington is the real problem…America must vote big-spending politicians from both parties out of Congress.” Paul has introduced the “Senior Citizens Tax Elimination Act.”
Thomas Jefferson: “The national progress of things is for government to gain ground and for liberty to yield.”
Following two straight months of improvement in November and December, the Conference Board’s Index of Leading Economic Indicators declined 0.3% in January. Prior to November and December, the index had declined for five consecutive months. In fact, over the past eight months, the index has been expanding more slowly than its 1.5 percent long-term average growth rate. Simply put, the expansion is also trailing the current rate of inflation. Realistically, there has been contraction and not expansion because, during the six-month span through January, the leading index decreased 0.3%. Conference Board economist Ken Goldstein stated “ the larger concern remains cautious. Business concerns about the direction of cash flow could lead to cautious decisions about hiring and rebuilding inventory.” I think Goldstein might find that rebuilding inventory has remained at muted levels for months and net permanent hiring growth has been basically non-existent for the past four years.
The headlines for the Philly Fed manufacturing sector did not describe the employment index. It was found in the third paragraph down in the news release. It stated that the employment index decreased from a reading of 17.0 in January to 12.3 in February, its lowest point in 15 months.
J.E. Wilson Advisors President James Wilson: “People who are smarting from investment losses or just generally disappointed by relatively low returns are the first to fail to appreciate the importance of liquidity. You can rebalance your portfolio to take into account changing circumstances. But that’s not so easy when you have most of your money tied up in real estate and the ‘bubble’ bursts ---or, at least, deflates a bit.”
If Congress and the President were truly serious about spending disciple, they would once again adopt PAYGO budget rules for all spending, and that includes every area of entitlement spending.
President Bush: “"I signed Medicare reform proudly, and any attempt to limit the choices of our seniors and to take away their prescription drug coverage under Medicare will meet my veto. This law is a landmark achievement in American health care.” Actually, it is inept legislation crafted out of ignorance accompanied by a non-caring mentality.
George Washington: “ No generation has a right to contract debts greater than can be paid off during the course of its own existence.”
Thursday, February 17, 2005
2/17/05 Our Annual Look At Wal-Mart
The latest quarter was a challenging one for Wal-Mart. U.S. comp sales for Wal-Mart stores was limited to a 1.4% increase, while there was a 2.0% comp increase for SAM’S CLUB. Total U.S. comp sales for their fiscal 2005 year were up 3.3%, which is comprised of a 2.9% comp increase for Wal-Mart stores and a 5.8% comp increase for SAM’S CLUB. The star performer was the international division with a 13.5% increase in operating income for the fourth quarter, and, for the full year, operating income just a hair below $3 billion, which represents an annual increase of 26.1% and almost 20% of the total operating income for the entire company. It should be noted that Wal-Mart added almost $29 billion in sales in their fiscal 2005 and net income topped $10 billion for the first time in the company’s history. There is one further note worth mentioning. In the fourth quarter, income from continuing operations before income taxes rose 9% but the provision for income taxes was unchanged from the prior year’s fourth quarter. This helped to explain the 16.2% increase in income from continuing operations for the most recent quarter.
Mahatma Gandhi: “There is enough for everyone’s need, but not for everyone’s greed.”
Greenspan opined “that the decline in long-term rates in the past few months is a ‘conundrum’ that defies easy explanation.” Really? As long as financial institutions continue to experience the carry trade on a daily basis as found money, as well as without risk, long-term rates will decline.
There is much I would normally say about Greenspan’s testimony. The man is well into his seventies. He has less than one year remaining on his term as chairman. I prefer to move on to other areas. I will no longer refer to Greenspan in future commentaries.
I am frequently asked about Splenda. I no longer have an ax to grind. I no longer run a large sugar company. Sugar is a natural product. Splenda is sugar that is chemically modified. It’s not a mystery.
For as long as I can remember, and my memory is not too bad, I have suggested that the present cap of $90,000 on Social Security taxes is grossly unfair. In sum, Bush is not open to raising the payroll tax, and in that I concur. On the other hand, he is open to raising the income cap on Social Security taxes. Combining raising the cap with the elimination of using excess trust funds for general budget purposes could help to stave off the non-crisis for Social Security.
Yesterday, light crude prices rose $1.07 to $48.33 a barrel. OPEC is contemplating second quarter production cuts. At the same time, cruse supplies are 8.5% higher than one year ago. I keep reading that inflation is well contained. If that’s the case, why am I paying 18 cents a gallon more at the pump in just a matter of a few weeks?
l
Delayed clinical trials come at a cost - for a blockbuster drug as much as $8 million in
revenue could be lost each day that a clinical trial is extended beyond
expectations. Meanwhile, niche drugs can lose upwards of $600,000 per day as
clinical trials are prolonged. Most commonly, clinical trial deadlines are
missed due to patient shortfalls. Research from Cutting Edge Information
reveals that forecasts estimate an anticipated 15% shortfall in patients needed for clinical trials in 2005. This is an additional reason why a growing number of clinical trials will find their way to India where there has not been any shortage of patients for such trials.
As for Target, total revenues increased 11.5 percent to $46.839 billion from
$42.025 billion in 2003, driven by a 5.3 percent increase in comparable store
sales combined with the contribution from new store expansion and our credit
card operations. (Total revenues include retail sales and net credit
revenues. Comparable-store sales are sales from stores open longer than one
year.)
For the year, earnings before interest and income taxes (EBIT) increased
14.0 percent to $3.601 billion, compared with $3.159 billion in 2003. The
contribution from the company's credit card operations to EBIT was
$485 million, an increase of $61 million, or 14.4 percent.
The company's gross margin rate improved from the prior year primarily due
to an increase in markup, while the company's expense rate was unfavorable to
prior year primarily due to previously disclosed lease accounting adjustments.
(Gross margin rate represents sales less cost of sales expressed as a
percentage of sales. Expense rate represents selling, general and
administrative expenses expressed as a percentage of sales.)
The latest quarter was a challenging one for Wal-Mart. U.S. comp sales for Wal-Mart stores was limited to a 1.4% increase, while there was a 2.0% comp increase for SAM’S CLUB. Total U.S. comp sales for their fiscal 2005 year were up 3.3%, which is comprised of a 2.9% comp increase for Wal-Mart stores and a 5.8% comp increase for SAM’S CLUB. The star performer was the international division with a 13.5% increase in operating income for the fourth quarter, and, for the full year, operating income just a hair below $3 billion, which represents an annual increase of 26.1% and almost 20% of the total operating income for the entire company. It should be noted that Wal-Mart added almost $29 billion in sales in their fiscal 2005 and net income topped $10 billion for the first time in the company’s history. There is one further note worth mentioning. In the fourth quarter, income from continuing operations before income taxes rose 9% but the provision for income taxes was unchanged from the prior year’s fourth quarter. This helped to explain the 16.2% increase in income from continuing operations for the most recent quarter.
Mahatma Gandhi: “There is enough for everyone’s need, but not for everyone’s greed.”
Greenspan opined “that the decline in long-term rates in the past few months is a ‘conundrum’ that defies easy explanation.” Really? As long as financial institutions continue to experience the carry trade on a daily basis as found money, as well as without risk, long-term rates will decline.
There is much I would normally say about Greenspan’s testimony. The man is well into his seventies. He has less than one year remaining on his term as chairman. I prefer to move on to other areas. I will no longer refer to Greenspan in future commentaries.
I am frequently asked about Splenda. I no longer have an ax to grind. I no longer run a large sugar company. Sugar is a natural product. Splenda is sugar that is chemically modified. It’s not a mystery.
For as long as I can remember, and my memory is not too bad, I have suggested that the present cap of $90,000 on Social Security taxes is grossly unfair. In sum, Bush is not open to raising the payroll tax, and in that I concur. On the other hand, he is open to raising the income cap on Social Security taxes. Combining raising the cap with the elimination of using excess trust funds for general budget purposes could help to stave off the non-crisis for Social Security.
Yesterday, light crude prices rose $1.07 to $48.33 a barrel. OPEC is contemplating second quarter production cuts. At the same time, cruse supplies are 8.5% higher than one year ago. I keep reading that inflation is well contained. If that’s the case, why am I paying 18 cents a gallon more at the pump in just a matter of a few weeks?
l
Delayed clinical trials come at a cost - for a blockbuster drug as much as $8 million in
revenue could be lost each day that a clinical trial is extended beyond
expectations. Meanwhile, niche drugs can lose upwards of $600,000 per day as
clinical trials are prolonged. Most commonly, clinical trial deadlines are
missed due to patient shortfalls. Research from Cutting Edge Information
reveals that forecasts estimate an anticipated 15% shortfall in patients needed for clinical trials in 2005. This is an additional reason why a growing number of clinical trials will find their way to India where there has not been any shortage of patients for such trials.
As for Target, total revenues increased 11.5 percent to $46.839 billion from
$42.025 billion in 2003, driven by a 5.3 percent increase in comparable store
sales combined with the contribution from new store expansion and our credit
card operations. (Total revenues include retail sales and net credit
revenues. Comparable-store sales are sales from stores open longer than one
year.)
For the year, earnings before interest and income taxes (EBIT) increased
14.0 percent to $3.601 billion, compared with $3.159 billion in 2003. The
contribution from the company's credit card operations to EBIT was
$485 million, an increase of $61 million, or 14.4 percent.
The company's gross margin rate improved from the prior year primarily due
to an increase in markup, while the company's expense rate was unfavorable to
prior year primarily due to previously disclosed lease accounting adjustments.
(Gross margin rate represents sales less cost of sales expressed as a
percentage of sales. Expense rate represents selling, general and
administrative expenses expressed as a percentage of sales.)
2/17/05 Our Annual Look At Wal-Mart
The latest quarter was a challenging one for Wal-Mart. U.S. comp sales for Wal-Mart stores was limited to a 1.4% increase, while there was a 2.0% comp increase for SAM’S CLUB. Total U.S. comp sales for their fiscal 2005 year were up 3.3%, which is comprised of a 2.9% comp increase for Wal-Mart stores and a 5.8% comp increase for SAM’S CLUB. The star performer was the international division with a 13.5% increase in operating income for the fourth quarter, and, for the full year, operating income just a hair below $3 billion, which represents an annual increase of 26.1% and almost 20% of the total operating income for the entire company. It should be noted that Wal-Mart added almost $29 billion in sales in their fiscal 2005 and net income topped $10 billion for the first time in the company’s history. There is one further note worth mentioning. In the fourth quarter, income from continuing operations before income taxes rose 9% but the provision for income taxes was unchanged from the prior year’s fourth quarter. This helped to explain the 16.2% increase in income from continuing operations for the most recent quarter.
Mahatma Gandhi: “There is enough for everyone’s need, but not for everyone’s greed.”
Greenspan opined “that the decline in long-term rates in the past few months is a ‘conundrum’ that defies easy explanation.” Really? As long as financial institutions continue to experience the carry trade on a daily basis as found money, as well as without risk, long-term rates will decline.
There is much I would normally say about Greenspan’s testimony. The man is well into his seventies. He has less than one year remaining on his term as chairman. I prefer to move on to other areas. I will no longer refer to Greenspan in future commentaries.
I am frequently asked about Splenda. I no longer have an ax to grind. I no longer run a large sugar company. Sugar is a natural product. Splenda is sugar that is chemically modified. It’s not a mystery.
For as long as I can remember, and my memory is not too bad, I have suggested that the present cap of $90,000 on Social Security taxes is grossly unfair. In sum, Bush is not open to raising the payroll tax, and in that I concur. On the other hand, he is open to raising the income cap on Social Security taxes. Combining raising the cap with the elimination of using excess trust funds for general budget purposes could help to stave off the non-crisis for Social Security.
Yesterday, light crude prices rose $1.07 to $48.33 a barrel. OPEC is contemplating second quarter production cuts. At the same time, cruse supplies are 8.5% higher than one year ago. I keep reading that inflation is well contained. If that’s the case, why am I paying 18 cents a gallon more at the pump in just a matter of a few weeks?
l
Delayed clinical trials come at a cost - for a blockbuster drug as much as $8 million in
revenue could be lost each day that a clinical trial is extended beyond
expectations. Meanwhile, niche drugs can lose upwards of $600,000 per day as
clinical trials are prolonged. Most commonly, clinical trial deadlines are
missed due to patient shortfalls. Research from Cutting Edge Information
reveals that forecasts estimate an anticipated 15% shortfall in patients needed for clinical trials in 2005. This is an additional reason why a growing number of clinical trials will find their way to India where there has not been any shortage of patients for such trials.
As for Target, total revenues increased 11.5 percent to $46.839 billion from
$42.025 billion in 2003, driven by a 5.3 percent increase in comparable store
sales combined with the contribution from new store expansion and our credit
card operations. (Total revenues include retail sales and net credit
revenues. Comparable-store sales are sales from stores open longer than one
year.)
For the year, earnings before interest and income taxes (EBIT) increased
14.0 percent to $3.601 billion, compared with $3.159 billion in 2003. The
contribution from the company's credit card operations to EBIT was
$485 million, an increase of $61 million, or 14.4 percent.
The company's gross margin rate improved from the prior year primarily due
to an increase in markup, while the company's expense rate was unfavorable to
prior year primarily due to previously disclosed lease accounting adjustments.
(Gross margin rate represents sales less cost of sales expressed as a
percentage of sales. Expense rate represents selling, general and
administrative expenses expressed as a percentage of sales.)
The latest quarter was a challenging one for Wal-Mart. U.S. comp sales for Wal-Mart stores was limited to a 1.4% increase, while there was a 2.0% comp increase for SAM’S CLUB. Total U.S. comp sales for their fiscal 2005 year were up 3.3%, which is comprised of a 2.9% comp increase for Wal-Mart stores and a 5.8% comp increase for SAM’S CLUB. The star performer was the international division with a 13.5% increase in operating income for the fourth quarter, and, for the full year, operating income just a hair below $3 billion, which represents an annual increase of 26.1% and almost 20% of the total operating income for the entire company. It should be noted that Wal-Mart added almost $29 billion in sales in their fiscal 2005 and net income topped $10 billion for the first time in the company’s history. There is one further note worth mentioning. In the fourth quarter, income from continuing operations before income taxes rose 9% but the provision for income taxes was unchanged from the prior year’s fourth quarter. This helped to explain the 16.2% increase in income from continuing operations for the most recent quarter.
Mahatma Gandhi: “There is enough for everyone’s need, but not for everyone’s greed.”
Greenspan opined “that the decline in long-term rates in the past few months is a ‘conundrum’ that defies easy explanation.” Really? As long as financial institutions continue to experience the carry trade on a daily basis as found money, as well as without risk, long-term rates will decline.
There is much I would normally say about Greenspan’s testimony. The man is well into his seventies. He has less than one year remaining on his term as chairman. I prefer to move on to other areas. I will no longer refer to Greenspan in future commentaries.
I am frequently asked about Splenda. I no longer have an ax to grind. I no longer run a large sugar company. Sugar is a natural product. Splenda is sugar that is chemically modified. It’s not a mystery.
For as long as I can remember, and my memory is not too bad, I have suggested that the present cap of $90,000 on Social Security taxes is grossly unfair. In sum, Bush is not open to raising the payroll tax, and in that I concur. On the other hand, he is open to raising the income cap on Social Security taxes. Combining raising the cap with the elimination of using excess trust funds for general budget purposes could help to stave off the non-crisis for Social Security.
Yesterday, light crude prices rose $1.07 to $48.33 a barrel. OPEC is contemplating second quarter production cuts. At the same time, cruse supplies are 8.5% higher than one year ago. I keep reading that inflation is well contained. If that’s the case, why am I paying 18 cents a gallon more at the pump in just a matter of a few weeks?
l
Delayed clinical trials come at a cost - for a blockbuster drug as much as $8 million in
revenue could be lost each day that a clinical trial is extended beyond
expectations. Meanwhile, niche drugs can lose upwards of $600,000 per day as
clinical trials are prolonged. Most commonly, clinical trial deadlines are
missed due to patient shortfalls. Research from Cutting Edge Information
reveals that forecasts estimate an anticipated 15% shortfall in patients needed for clinical trials in 2005. This is an additional reason why a growing number of clinical trials will find their way to India where there has not been any shortage of patients for such trials.
As for Target, total revenues increased 11.5 percent to $46.839 billion from
$42.025 billion in 2003, driven by a 5.3 percent increase in comparable store
sales combined with the contribution from new store expansion and our credit
card operations. (Total revenues include retail sales and net credit
revenues. Comparable-store sales are sales from stores open longer than one
year.)
For the year, earnings before interest and income taxes (EBIT) increased
14.0 percent to $3.601 billion, compared with $3.159 billion in 2003. The
contribution from the company's credit card operations to EBIT was
$485 million, an increase of $61 million, or 14.4 percent.
The company's gross margin rate improved from the prior year primarily due
to an increase in markup, while the company's expense rate was unfavorable to
prior year primarily due to previously disclosed lease accounting adjustments.
(Gross margin rate represents sales less cost of sales expressed as a
percentage of sales. Expense rate represents selling, general and
administrative expenses expressed as a percentage of sales.)
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