4/9/05 Warnings
Yesterday, Ford stated that, due to higher health care and steel costs, it would earn $900 million less in 2005 than the company predicted a few months ago. In addition, it no longer expects to reach its profit goal for 2006. Meanwhile, USF (the old U.S. Freight) warned that it's earnings would be disappointing. Not surprisingly, the transportation index took it on the chin.
In studying this year's first quarter profit gains, one might consider how much of the results come from price increases for oil, natural gas, coal, steel, and other commodities.
Japan projected that unrealized losses in its forex holdings stand at $110 billion at 3/31/05. Korea incurred a $10 billion loss in its forex holdings in 2004. Meanwhile, foreign currency reserves held in developing countries rose by $670 billion over the period of 2003 and 2004.
In an effort to curb real estate speculation, a new law was passed in Shanghai "requiring home owners to pay off their mortgages before selling their properties."
The news on employment was not good this week. Sears filed a revised layoff announcement and will cut at least 500 workers at its headquarters and not 250 as originally stated. Gillette will close a Duracell plant in Lexington, NC and impact 280 workers. TRW will close its Fremont, Ohio brake rotor plant and put 270 people out of work. First Data's Telecheck subsidiary will reduce its Houston-area workforce by 380 jobs. Across the seas, MG Rover warned that its future was in question. Rover employs 6,000 workers.
Year-to-date, M3 has expanded by 3.6%, while bank credit has expanded at a 15.6% annualized rate. The CRB has risen 7.2% year-to-date, and the Goldman Sachs Commodity Index is up a healthy 18.9%.
Saturday, April 09, 2005
Friday, April 08, 2005
Macro And Micro
4/8/05 Macro And Micro
Oil prices are expected to remain above $50 a barrel throughout 2005 and 2006, according to a forecast released Thursday by the statistical arm of the Energy Department.
OPEC March output was 29.89 million b/d, an increase of 440,000 b/d for the month.
Meanwhile, crude declined for the fifth consecutive day, and is approaching $53 per barrel.
According to Foreclosure.com, the number of foreclosed homes put up for sale rose 50% between February and March.
Dell is forecasting revenues of $57 billion this year and $80 billion in 3 to 4 years.
According to Lear Financial, "in China there's just o.1 grams of gold per capita. The India rate, by contrast, is 0.73, and the U.S., 1.41. It's only a matter of time until the rate in China begins to increase.
Pfizer pulled Bextra off the market and will place a warning label on Celebrex. I wonder when they'll place a note on products to tell consumers that drug manufacturing costs can be reduced by 40% or more in India.
U.S. February wholesale inventories increased 0.6%, while sales fell 0.4%, the biggest drop since April 2003.
Natural gas in storage unexpectedly rose by 10 billion cubic feet in the latest week. Analyst were anticipating a decline.
Yesterday, St. Louis Fed President Poole stated policy makers may be required to lift interest rates "more vigorously." That can lead to higher deficits and more dollars being printed.
Firefox has about 30 million users and presently 5.7% of the browser market. It's developer predicts Firefox will capture as much as 15% of the browser market in the next year.
According to the Kaiser Family Foundation, premiums for family coverage in employer-sponsored health care plans rose 59% between 2001 and 2004, compared with a 9.7% growth in consumer prices.
Once again, 30-year mortgages dipped below 6%.
According to Cambridge Consumer Credit Index, 59% of Americans plan to spend their tax refunds on everyday purchases or make bill payments, down from 68% in 2004. Interestingly, the percentage of Americans using credit cards to pay taxes jumped from 3% in 2004 to an estimated 11% this year.
Oil prices are expected to remain above $50 a barrel throughout 2005 and 2006, according to a forecast released Thursday by the statistical arm of the Energy Department.
OPEC March output was 29.89 million b/d, an increase of 440,000 b/d for the month.
Meanwhile, crude declined for the fifth consecutive day, and is approaching $53 per barrel.
According to Foreclosure.com, the number of foreclosed homes put up for sale rose 50% between February and March.
Dell is forecasting revenues of $57 billion this year and $80 billion in 3 to 4 years.
According to Lear Financial, "in China there's just o.1 grams of gold per capita. The India rate, by contrast, is 0.73, and the U.S., 1.41. It's only a matter of time until the rate in China begins to increase.
Pfizer pulled Bextra off the market and will place a warning label on Celebrex. I wonder when they'll place a note on products to tell consumers that drug manufacturing costs can be reduced by 40% or more in India.
U.S. February wholesale inventories increased 0.6%, while sales fell 0.4%, the biggest drop since April 2003.
Natural gas in storage unexpectedly rose by 10 billion cubic feet in the latest week. Analyst were anticipating a decline.
Yesterday, St. Louis Fed President Poole stated policy makers may be required to lift interest rates "more vigorously." That can lead to higher deficits and more dollars being printed.
Firefox has about 30 million users and presently 5.7% of the browser market. It's developer predicts Firefox will capture as much as 15% of the browser market in the next year.
According to the Kaiser Family Foundation, premiums for family coverage in employer-sponsored health care plans rose 59% between 2001 and 2004, compared with a 9.7% growth in consumer prices.
Once again, 30-year mortgages dipped below 6%.
According to Cambridge Consumer Credit Index, 59% of Americans plan to spend their tax refunds on everyday purchases or make bill payments, down from 68% in 2004. Interestingly, the percentage of Americans using credit cards to pay taxes jumped from 3% in 2004 to an estimated 11% this year.
Thursday, April 07, 2005
Trends For Employment And The Consumer
4/7/05 Trends For Employment And The Consumer
James Duderstadt, President of the University of Michigan and head of Michigan's Roadmap project, stated "Michigan's old manufacturing economy is dying, slowly but surely, putting at risk the welfare of millions of citizens in our state. Thus far, the state has been in denial, assuming our low-skill workforce would remain competitive and our factory-based manufacturing economy would be prosperous indefinitely."
Bridgewater Associates: "44% of all corporate profits in the U.S. come from the financial sector compared with only 10% from the manufacturing sector." In actuality, the 44% is understated. It does not include the profits from GM's and GE's financial sectors, for example.
What is the fastest growing part of our economy? The answer is interest-rate derivatives. Do you think a great many employees are required to trade these derivatives? Additionally, how much employment creation is required for insurance, consumer credit, mortgage financing, or even second-lien loans? You get the picture. Certainly, there are new monthly employees needed in the field of health care and possibly education and construction, but financial professionals are the bread and butter sector for employment growth. They represent the growing core of our service payroll expansion. Should interest rates increase by even 100 basis points, this sector would feel the impact, and so would consumption.
According to S&P's LCD, companies raised $12 billion in second-lien loans in 2004. Through the first quarter of 2005, $5 billion of second-lien loans have been placed.
With rising health care costs and stock and bond markets not providing positive returns so far in 2005, one should not be surprised to see the underfunding of U.S. pension plans rise to record levels this year.
ACT Research reported that orders for heavy-duty trucks in the U.S., Canada, and Mexico were down 25% in March 2005 from year-ago levels. It was the first year-on-year decline since May 2003.
With two months completed in Wal-Mart's April quarter, the company now estimates earnings will come in around the low end of their previous estimate of 56 cents to 58 cents per share. The company stated "given the shift in Easter and the unseasonable weather, we now estimate comparable sales in the U.S. for the April period to be in the 0 to 2 percent range. For the retail quarter, we expect comparable sales to be at the low end of our previous guidance of 3 to 5 percent." For the nine weeks ended 4/1/05, the major change was at SAM's CLUB where same-store sales rose 2.9% compared with 8.1% in the same 9-week period ended 4/2/04.
In the latest week, crude supplies rose by 2.4 million barrels, U.S. gas inventories fell by 2.1 million barrels, and distillate supplies rose by 0.7 million barrels. The crude build was less than Platts was expecting and the gas drawdown was bigger than expected.
Magnetic Specialty of Marietta, Ohion is closing its doors and 110 employees will lose their jobs. Lennox Hearth Products is closing its Burlington, WA plant and moving manufacturing to Mexico. About 70 employees will lose their jobs.
Forest Labs expects its fiscal March 2005 fourth quarter to be lower than the company's previous guidance. They stated "although prescription demand and ex-factory sales have heretofore been relatively consistent on an annual basis, subject to normal quarterly variation, it appears that wholesalers have reduced inventories for both of the company's key products to significantly lower levels during the quarter ended March 31, 2005." Importantly, Lexapro continued to increase its prescription market share during the quarter; however, sales in this quarter of Lexapro approximated $400 million, down from $427 million in the third quarter. The big change was wholesalers carrying inventory of 15 days rather than 21 days. In addition, Namenda's total prescription volume increased in the quarter, but its sales were $93 million, down from $100 million in the prior quarter. The decline was also due to lower wholesaler and chain inventories.
Federated Department Stores expects flat same-store sales for April and JC Penney expects them to be flat to slightly up. Target expects its earnings for the April quarter to meet or exceed expectations.
May crude is trading around $56.69 a barrel.
In the week ending March 26, the number of people receiving unemployment checks rose by 90,000 to 2.69 million; however, the 4-week average of continuing claims dipped by 2,000 to 2.65 million.
James Duderstadt, President of the University of Michigan and head of Michigan's Roadmap project, stated "Michigan's old manufacturing economy is dying, slowly but surely, putting at risk the welfare of millions of citizens in our state. Thus far, the state has been in denial, assuming our low-skill workforce would remain competitive and our factory-based manufacturing economy would be prosperous indefinitely."
Bridgewater Associates: "44% of all corporate profits in the U.S. come from the financial sector compared with only 10% from the manufacturing sector." In actuality, the 44% is understated. It does not include the profits from GM's and GE's financial sectors, for example.
What is the fastest growing part of our economy? The answer is interest-rate derivatives. Do you think a great many employees are required to trade these derivatives? Additionally, how much employment creation is required for insurance, consumer credit, mortgage financing, or even second-lien loans? You get the picture. Certainly, there are new monthly employees needed in the field of health care and possibly education and construction, but financial professionals are the bread and butter sector for employment growth. They represent the growing core of our service payroll expansion. Should interest rates increase by even 100 basis points, this sector would feel the impact, and so would consumption.
According to S&P's LCD, companies raised $12 billion in second-lien loans in 2004. Through the first quarter of 2005, $5 billion of second-lien loans have been placed.
With rising health care costs and stock and bond markets not providing positive returns so far in 2005, one should not be surprised to see the underfunding of U.S. pension plans rise to record levels this year.
ACT Research reported that orders for heavy-duty trucks in the U.S., Canada, and Mexico were down 25% in March 2005 from year-ago levels. It was the first year-on-year decline since May 2003.
With two months completed in Wal-Mart's April quarter, the company now estimates earnings will come in around the low end of their previous estimate of 56 cents to 58 cents per share. The company stated "given the shift in Easter and the unseasonable weather, we now estimate comparable sales in the U.S. for the April period to be in the 0 to 2 percent range. For the retail quarter, we expect comparable sales to be at the low end of our previous guidance of 3 to 5 percent." For the nine weeks ended 4/1/05, the major change was at SAM's CLUB where same-store sales rose 2.9% compared with 8.1% in the same 9-week period ended 4/2/04.
In the latest week, crude supplies rose by 2.4 million barrels, U.S. gas inventories fell by 2.1 million barrels, and distillate supplies rose by 0.7 million barrels. The crude build was less than Platts was expecting and the gas drawdown was bigger than expected.
Magnetic Specialty of Marietta, Ohion is closing its doors and 110 employees will lose their jobs. Lennox Hearth Products is closing its Burlington, WA plant and moving manufacturing to Mexico. About 70 employees will lose their jobs.
Forest Labs expects its fiscal March 2005 fourth quarter to be lower than the company's previous guidance. They stated "although prescription demand and ex-factory sales have heretofore been relatively consistent on an annual basis, subject to normal quarterly variation, it appears that wholesalers have reduced inventories for both of the company's key products to significantly lower levels during the quarter ended March 31, 2005." Importantly, Lexapro continued to increase its prescription market share during the quarter; however, sales in this quarter of Lexapro approximated $400 million, down from $427 million in the third quarter. The big change was wholesalers carrying inventory of 15 days rather than 21 days. In addition, Namenda's total prescription volume increased in the quarter, but its sales were $93 million, down from $100 million in the prior quarter. The decline was also due to lower wholesaler and chain inventories.
Federated Department Stores expects flat same-store sales for April and JC Penney expects them to be flat to slightly up. Target expects its earnings for the April quarter to meet or exceed expectations.
May crude is trading around $56.69 a barrel.
In the week ending March 26, the number of people receiving unemployment checks rose by 90,000 to 2.69 million; however, the 4-week average of continuing claims dipped by 2,000 to 2.65 million.
Wednesday, April 06, 2005
Declining I Feel Good
4/6/05 Declining I Feel Good
According to the latest findings of the Experian-Gallup Credit Index, consumers are feeling less positive about the future, while 63% expect to receive a federal tax refund. Last year, 66% actually received a refund, and 19% paid additional taxes. Currently, the Personal Credit Index is at 82, a sharp drop from last month's score of 100. The decline is due mostly to lower optimism about consumers' future credit situation.
According to the latest Washington Post-ABC News Consumer Comfort survey of 1,000 randomly selected adults, consumer confidence dropped for the second week in a row. The overall index now stands at -17, down 4 points from last week and 10 points in the past month. The last time the index hit -17 was in the summer of 2004.
President Bush speaking on Social Security: "A lot of people in America think there's a trust. But that's not the way it works. There is no trust fund- just IOUs." The real question is whether there is trust in our leaders. Do the leaders substitute IOUs for trust?
Yesterday, the U.S. Commerce Department stated it wanted to reinstate the 7.5% cap on market share for certain Chinese textile imports. China called this U.S. textile protection "unfair." Since January 2001, 381,300 textile and apparel jobs have been lost in the U.S.
According to Gail Fossler, chief economist of The Conference Board, a reduction in U.S. consumption, increased savings, and the adoption of flexible exchange rates in Asia would trigger global instability. I totally disagree with Ms. Fossler. Our country requires less consumption and more savings and global commerce requires flexible exchange rates.
Yesterday, GM announced it would offer an additional $1,000 off all its vehicles.
Ford aims to cut 1,000 white-collar jobs. United Airlines is closing its Kent, WA reservations call center and eliminating 400 jobs.
Crude dipped to $55.78 a barrel.
U.S. chain store sales in the fifth week of March declined 0.7% compared with February's numbers.
Challenger, Gray & Christmas stated that 1st quarter job-cut announcements were up 9.2% year-over-year, and are on track to exceed 1 million for the fifth year in a row. However, planned job reductions fell by 20% in March to 86,396.
In the week ended March 1, mortgage applications activity fell 4.4% compared with the prior week.
MCI decided to accept Verizon's offer because there was more certainty of the deal closing.
In the 1st quarter, Boeing delivered 70 planes, six fewer than the year ago period but the stock traded at its highest price in nearly 4 years. For 2005, the company has estimated it will deliver 320 planes. Good luck.
Malaysia's February trade surplus rose 21.4% year-on-year to $1.87 billion, but fell 6.2% from January. February marked the 88th consecutive monthly trade surplus.
Siebel's 1st quarter results will fall short of estimates due to disappointing license revenue.
Research In Motion's 1st quarter revenue fell short of estimates.
IBM will expense stock options.
Since making a high 4 weeks ago, Mexico's stock market has dropped 13%.
Pfizer, as expected, stated it will cut $4 billion in costs by 2008. Many detail personnel will be dropped from the payroll. Doctors have complained of too many Pfizer sales persons knocking on their office doors. The company stated earnings for 2005 would decline to $2 per share from the prior year's $2.13 but that 2006 would return to double-digit growth. Maybe so, but Zoloft (sales of $3.36 billion), their #3 drug, goes off patent in 2006, and then Norvasc, their #2 drug, off patent in 2007. Realistically, a new trend is forming where big pharma will offer a generic alternative prior to a major drug going off patent. It will be interesting to see how their generic costs compare with generic manufacturers in India.
According to the latest findings of the Experian-Gallup Credit Index, consumers are feeling less positive about the future, while 63% expect to receive a federal tax refund. Last year, 66% actually received a refund, and 19% paid additional taxes. Currently, the Personal Credit Index is at 82, a sharp drop from last month's score of 100. The decline is due mostly to lower optimism about consumers' future credit situation.
According to the latest Washington Post-ABC News Consumer Comfort survey of 1,000 randomly selected adults, consumer confidence dropped for the second week in a row. The overall index now stands at -17, down 4 points from last week and 10 points in the past month. The last time the index hit -17 was in the summer of 2004.
President Bush speaking on Social Security: "A lot of people in America think there's a trust. But that's not the way it works. There is no trust fund- just IOUs." The real question is whether there is trust in our leaders. Do the leaders substitute IOUs for trust?
Yesterday, the U.S. Commerce Department stated it wanted to reinstate the 7.5% cap on market share for certain Chinese textile imports. China called this U.S. textile protection "unfair." Since January 2001, 381,300 textile and apparel jobs have been lost in the U.S.
According to Gail Fossler, chief economist of The Conference Board, a reduction in U.S. consumption, increased savings, and the adoption of flexible exchange rates in Asia would trigger global instability. I totally disagree with Ms. Fossler. Our country requires less consumption and more savings and global commerce requires flexible exchange rates.
Yesterday, GM announced it would offer an additional $1,000 off all its vehicles.
Ford aims to cut 1,000 white-collar jobs. United Airlines is closing its Kent, WA reservations call center and eliminating 400 jobs.
Crude dipped to $55.78 a barrel.
U.S. chain store sales in the fifth week of March declined 0.7% compared with February's numbers.
Challenger, Gray & Christmas stated that 1st quarter job-cut announcements were up 9.2% year-over-year, and are on track to exceed 1 million for the fifth year in a row. However, planned job reductions fell by 20% in March to 86,396.
In the week ended March 1, mortgage applications activity fell 4.4% compared with the prior week.
MCI decided to accept Verizon's offer because there was more certainty of the deal closing.
In the 1st quarter, Boeing delivered 70 planes, six fewer than the year ago period but the stock traded at its highest price in nearly 4 years. For 2005, the company has estimated it will deliver 320 planes. Good luck.
Malaysia's February trade surplus rose 21.4% year-on-year to $1.87 billion, but fell 6.2% from January. February marked the 88th consecutive monthly trade surplus.
Siebel's 1st quarter results will fall short of estimates due to disappointing license revenue.
Research In Motion's 1st quarter revenue fell short of estimates.
IBM will expense stock options.
Since making a high 4 weeks ago, Mexico's stock market has dropped 13%.
Pfizer, as expected, stated it will cut $4 billion in costs by 2008. Many detail personnel will be dropped from the payroll. Doctors have complained of too many Pfizer sales persons knocking on their office doors. The company stated earnings for 2005 would decline to $2 per share from the prior year's $2.13 but that 2006 would return to double-digit growth. Maybe so, but Zoloft (sales of $3.36 billion), their #3 drug, goes off patent in 2006, and then Norvasc, their #2 drug, off patent in 2007. Realistically, a new trend is forming where big pharma will offer a generic alternative prior to a major drug going off patent. It will be interesting to see how their generic costs compare with generic manufacturers in India.
Tuesday, April 05, 2005
Rising And Falling
4/5/05 Rising And Falling
Since 1970, the Goldman Sachs Commodity Index has delivered total annualized returns of 13.9%. It has risen 26.2% year-to-date or almost 100% higher than the returns over the past three and one-half decades.
From May 1, the EU has proposed an extra 15% duty on U.S. paper, farm goods, textiles, and machinery.
The EIA said that the retail price for gasoline hit another record at $2.22 a gallon. It's up 44 cents from a year ago or $10 a week for those driving 12,000 miles per year.
According to Autodata Corp, for the fifth consecutive month, incentives offered by U.S. automakers continued to decline in March, while those offered by Asia competitors continued to rise.
Unocal has proven reserves of 675 million barrels of crude oil in the Gulf of Mexico, Asia, Africa and Latin America. The company also has large gas fields in Asia, strategically located to serve growing markets in China and Japan. Presently, it is cheaper to buy reserves than to explore for new reserves. In addition, it should be pointed out that 62% of Unocal's output is gas compared with 28% for ChevronTexaco.
With oil at roughly $57 a barrel and silver trading close to $7, the ratio of oil to silver exceeds 8 to 1, an historically high relationship.
The dollar is trading at a 5 1/2 month high to the yen.
The Australian Financial Review stated that BHP Billtn is seeking to increase its iron ore prices by 100%.
Morgan Stanley is seeking to spin off the Discover Card.
With the quarterly reports coming out, it will be interesting to see what impact the record price of crude has had on the airlines, cruise ship companies, truckers, package deliverers, farmers, and petrochemical firms.
Germany's GDP growth rate for 2005 is forecast at 0.8% and its budget deficit is anticipated to approximate 3.3% of GDP. Once again, it will exceed the 3% limit set for the euro countires.
Norway is the world's third largest oil exporter. Their oil minister hopes oil prices will decline a little.
Since last week, three tech companies, Microsemi, Celestica, and Amtel, have announced Colorado layoffs totaling roughly 1,000 employees. The Fort Collins area has been particularly hard hit by the layoffs.
According to the National Council of Textile Organizations, exports by China of apparel products to the U.S. in January and February rose 486% from the same period in 2004. During the same two months this year, 14 textile plants in the U.S. closed.
China's Xinhua News Agency reported that more than 100 cities have inadequate water supplies. A recent survey found that only 47% of water in major rivers is drinkable, while half of all lakes are heavily polluted. In addition, 35% of ground water is undrinkable due to pollution. All the cheap goods and all the cheap labor won't solve China's water problem. Massive water treatment projects will be needed. Without adequate water supplies, China's future as an economic power will be limited.
Mexico is the no. 2 supplier of crude to the U.S. Mexican officials warn that their country might need to import oil in as little as 10 years. Mexico's oil-related revenue currently covers about
one-third of federal spending. Pemex does not have the money or the technology for massive deepwater projects.
Omar Bradley: "Ours is a world of nuclear giants and ethical infants. If we continue to develop our technology without wisdom or prudence, our servant may prove to be our executioner."
What impact will rising interest rates, rising material costs, and rising energy prices have on corporate profit margins, cash flow, and the rate at which earnings are capitalized? What will be the impact on capital expenditures and hiring?
The world consumes 84 million barrels of oil each day. At $57 a barrel, the yearly cost approximates one and three-quarters trillion dollars! Given the cash flow in all the corners of the globe, that expenditure level is, in my view, unsustainable.
Pernod, Fortune Brands in talks to buy Allied Domecq.
In a recent survey conducted by the Employee Benefit Research Institute, a majority of respondents stated they're behind in their retirement savings, yet confident that they'll reach their savings goal by retirement, even if they haven't done a had-core estimate of how much they'll need (over 50% stated they had not.)
Umberto Eco: "What we honor as prudence in our elders is simply panic in action."
Since 1970, the Goldman Sachs Commodity Index has delivered total annualized returns of 13.9%. It has risen 26.2% year-to-date or almost 100% higher than the returns over the past three and one-half decades.
From May 1, the EU has proposed an extra 15% duty on U.S. paper, farm goods, textiles, and machinery.
The EIA said that the retail price for gasoline hit another record at $2.22 a gallon. It's up 44 cents from a year ago or $10 a week for those driving 12,000 miles per year.
According to Autodata Corp, for the fifth consecutive month, incentives offered by U.S. automakers continued to decline in March, while those offered by Asia competitors continued to rise.
Unocal has proven reserves of 675 million barrels of crude oil in the Gulf of Mexico, Asia, Africa and Latin America. The company also has large gas fields in Asia, strategically located to serve growing markets in China and Japan. Presently, it is cheaper to buy reserves than to explore for new reserves. In addition, it should be pointed out that 62% of Unocal's output is gas compared with 28% for ChevronTexaco.
With oil at roughly $57 a barrel and silver trading close to $7, the ratio of oil to silver exceeds 8 to 1, an historically high relationship.
The dollar is trading at a 5 1/2 month high to the yen.
The Australian Financial Review stated that BHP Billtn is seeking to increase its iron ore prices by 100%.
Morgan Stanley is seeking to spin off the Discover Card.
With the quarterly reports coming out, it will be interesting to see what impact the record price of crude has had on the airlines, cruise ship companies, truckers, package deliverers, farmers, and petrochemical firms.
Germany's GDP growth rate for 2005 is forecast at 0.8% and its budget deficit is anticipated to approximate 3.3% of GDP. Once again, it will exceed the 3% limit set for the euro countires.
Norway is the world's third largest oil exporter. Their oil minister hopes oil prices will decline a little.
Since last week, three tech companies, Microsemi, Celestica, and Amtel, have announced Colorado layoffs totaling roughly 1,000 employees. The Fort Collins area has been particularly hard hit by the layoffs.
According to the National Council of Textile Organizations, exports by China of apparel products to the U.S. in January and February rose 486% from the same period in 2004. During the same two months this year, 14 textile plants in the U.S. closed.
China's Xinhua News Agency reported that more than 100 cities have inadequate water supplies. A recent survey found that only 47% of water in major rivers is drinkable, while half of all lakes are heavily polluted. In addition, 35% of ground water is undrinkable due to pollution. All the cheap goods and all the cheap labor won't solve China's water problem. Massive water treatment projects will be needed. Without adequate water supplies, China's future as an economic power will be limited.
Mexico is the no. 2 supplier of crude to the U.S. Mexican officials warn that their country might need to import oil in as little as 10 years. Mexico's oil-related revenue currently covers about
one-third of federal spending. Pemex does not have the money or the technology for massive deepwater projects.
Omar Bradley: "Ours is a world of nuclear giants and ethical infants. If we continue to develop our technology without wisdom or prudence, our servant may prove to be our executioner."
What impact will rising interest rates, rising material costs, and rising energy prices have on corporate profit margins, cash flow, and the rate at which earnings are capitalized? What will be the impact on capital expenditures and hiring?
The world consumes 84 million barrels of oil each day. At $57 a barrel, the yearly cost approximates one and three-quarters trillion dollars! Given the cash flow in all the corners of the globe, that expenditure level is, in my view, unsustainable.
Pernod, Fortune Brands in talks to buy Allied Domecq.
In a recent survey conducted by the Employee Benefit Research Institute, a majority of respondents stated they're behind in their retirement savings, yet confident that they'll reach their savings goal by retirement, even if they haven't done a had-core estimate of how much they'll need (over 50% stated they had not.)
Umberto Eco: "What we honor as prudence in our elders is simply panic in action."
Monday, April 04, 2005
The Late Innings
4/4/05 The Late Innings
The Major League Baseball season has just begun, but in the game of investment risk, we are in the late innings. Not all ball fields have night lights--especially in the developing countries. As such, in some corners of the world, the game can be called on account of darkness.
China's State Council: "``Excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability, and even influenced the health of the national economy.”
Jim Williams: "China is using 55% of the world's cement."
The EU cut its 2005 growth forecast for the euro zone to 1.6% to 2.1%.
According to Marco Van Akkeren, economist at PMI Mortgage Insurance, a one percentage point increase in interest rates reduces housing affordability by 10%. In addition, in recent years, Akkeren points out that home price gains have far outstripped increases in personal income. In view of the aforementioned, he cautions that, in the next two years, there is a 48% chance of falling house prices in the San-Francisco-Oakland-Fremont area and 53% for San Jose-Sunnyvale-Santa Clara.
According to LoanPerformance, 62% of home purchases were financed with interest-only loans in 2004. Van Akkeren observed "it's a clear signal that borrowers are stretching. They can't make mortgage payments on the plain vanilla 30-year or 15-year fixed-rate mortgage, so they expose themselves to more interest rate risk and more risk to price declines." Home buyers are not alone in assuming more interest rate risk. Look at our federal Treasury. They have lowered the average maturity on our outstanding federal debt issues to roughly three years. In so doing, they took advantage of lower interest rates on these shorter maturities rather than locking in rates for 10 to 30 years during this recent record-low interest rate period. That reflects risky short-range thinking, and it was entirely avoidable.
It will serve one well to remember that the overall housing sector is an important component of our GDP as well as recent payroll growth. When housing prices decline, it will additionally impact consumer spending. When our consumer spending generator sputters, it will be heard in China, Japan, Mexico, Canada, and many corners of the earth. Currently, consumer spending is running low on fuel. The back up generator, savings, is almost on empty. The risk is getting higher each and every day of being stranded out in the middle of nowehere in a no cell zone with no help on the way. Don't look to the government. Their finances are worse than yours.
The Major League Baseball season has just begun, but in the game of investment risk, we are in the late innings. Not all ball fields have night lights--especially in the developing countries. As such, in some corners of the world, the game can be called on account of darkness.
China's State Council: "``Excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability, and even influenced the health of the national economy.”
Jim Williams: "China is using 55% of the world's cement."
The EU cut its 2005 growth forecast for the euro zone to 1.6% to 2.1%.
According to Marco Van Akkeren, economist at PMI Mortgage Insurance, a one percentage point increase in interest rates reduces housing affordability by 10%. In addition, in recent years, Akkeren points out that home price gains have far outstripped increases in personal income. In view of the aforementioned, he cautions that, in the next two years, there is a 48% chance of falling house prices in the San-Francisco-Oakland-Fremont area and 53% for San Jose-Sunnyvale-Santa Clara.
According to LoanPerformance, 62% of home purchases were financed with interest-only loans in 2004. Van Akkeren observed "it's a clear signal that borrowers are stretching. They can't make mortgage payments on the plain vanilla 30-year or 15-year fixed-rate mortgage, so they expose themselves to more interest rate risk and more risk to price declines." Home buyers are not alone in assuming more interest rate risk. Look at our federal Treasury. They have lowered the average maturity on our outstanding federal debt issues to roughly three years. In so doing, they took advantage of lower interest rates on these shorter maturities rather than locking in rates for 10 to 30 years during this recent record-low interest rate period. That reflects risky short-range thinking, and it was entirely avoidable.
It will serve one well to remember that the overall housing sector is an important component of our GDP as well as recent payroll growth. When housing prices decline, it will additionally impact consumer spending. When our consumer spending generator sputters, it will be heard in China, Japan, Mexico, Canada, and many corners of the earth. Currently, consumer spending is running low on fuel. The back up generator, savings, is almost on empty. The risk is getting higher each and every day of being stranded out in the middle of nowehere in a no cell zone with no help on the way. Don't look to the government. Their finances are worse than yours.
Sunday, April 03, 2005
A Hero For All Seasons
4/3/05 A Hero For All Seasons
Philip James Bailey: "The hero is the world-man, in whose heart One passion stands for all, the most indulged." In a world sadly in need of a hero, the Pope stood tall for 26 years. Will Rogers said that "being a hero is about the shortest-lived profession on earth." Pope John Paul II was the exception.
Pope John Paul II: "The great danger for family life, in the midst of any society whose idols are pleasure, comfort, and independence, lies in the fact that people close their hearts and become selfish."
The greatest danger to our individual and societal independence is to follow in the footsteps of leaders who fail to speak truths that stands the test of time. One must always carefully examine spoken and written words and numbers. That is true in politics, religion, and finance.
Some words are spoken too late and with misinformed descriptions to have relevance. For example, William Poole of the St. Louis Fed stated "the upward thrust to the economy appears quite substantial and the risk of higher inflation over the next 6 months or so seems clearly greater than the risk that inflation will fall below a desirable range." How strong is an economy with a dearth of good-paying jobs? How strong is an economy where debt increases faster than GDP? How strong is an economy with almost no national savings? How strong is an economy when inflation outpaces wages?
Wal-Mart's March same-store sales increased 4.2%. Food sales were, once again, the star performer. Did you see where the company has begun to sell pets online?
Philip James Bailey: "The hero is the world-man, in whose heart One passion stands for all, the most indulged." In a world sadly in need of a hero, the Pope stood tall for 26 years. Will Rogers said that "being a hero is about the shortest-lived profession on earth." Pope John Paul II was the exception.
Pope John Paul II: "The great danger for family life, in the midst of any society whose idols are pleasure, comfort, and independence, lies in the fact that people close their hearts and become selfish."
The greatest danger to our individual and societal independence is to follow in the footsteps of leaders who fail to speak truths that stands the test of time. One must always carefully examine spoken and written words and numbers. That is true in politics, religion, and finance.
Some words are spoken too late and with misinformed descriptions to have relevance. For example, William Poole of the St. Louis Fed stated "the upward thrust to the economy appears quite substantial and the risk of higher inflation over the next 6 months or so seems clearly greater than the risk that inflation will fall below a desirable range." How strong is an economy with a dearth of good-paying jobs? How strong is an economy where debt increases faster than GDP? How strong is an economy with almost no national savings? How strong is an economy when inflation outpaces wages?
Wal-Mart's March same-store sales increased 4.2%. Food sales were, once again, the star performer. Did you see where the company has begun to sell pets online?
A Hero For All Seasons
4/3/05 A Hero For All Seasons
Philip James Bailey: "The hero is the world-man, in whose heart One passion stands for all, the most indulged." In a world sadly in need of a hero, the Pope stood tall for 26 years. Will Rogers said that "being a hero is about the shortest-lived profession on earth." Pope John Paul II was the exception.
Pope John Paul II: "The great danger for family life, in the midst of any society whose idols are pleasure, comfort, and independence, lies in the fact that people close their hearts and become selfish."
The greatest danger to our individual and societal independence is to follow in the footsteps of leaders who fail to speak truths that stands the test of time. One must always carefully examine spoken and written words and numbers. That is true in politics, religion, and finance.
Some words are spoken too late and with misinformed descriptions to have relevance. For example, William Poole of the St. Louis Fed stated "the upward thrust to the economy appears quite substantial and the risk of higher inflation over the next 6 months or so seems clearly greater than the risk that inflation will fall below a desirable range." How strong is an economy with a dearth of good-paying jobs? How strong is an economy where debt increases faster than GDP? How strong is an economy with almost no national savings? How strong is an economy when inflation outpaces wages?
Wal-Mart's March same-store sales increased 4.2%. Food sales were, once again, the star performer. Did you see where the company has begun to sell pets online?
Philip James Bailey: "The hero is the world-man, in whose heart One passion stands for all, the most indulged." In a world sadly in need of a hero, the Pope stood tall for 26 years. Will Rogers said that "being a hero is about the shortest-lived profession on earth." Pope John Paul II was the exception.
Pope John Paul II: "The great danger for family life, in the midst of any society whose idols are pleasure, comfort, and independence, lies in the fact that people close their hearts and become selfish."
The greatest danger to our individual and societal independence is to follow in the footsteps of leaders who fail to speak truths that stands the test of time. One must always carefully examine spoken and written words and numbers. That is true in politics, religion, and finance.
Some words are spoken too late and with misinformed descriptions to have relevance. For example, William Poole of the St. Louis Fed stated "the upward thrust to the economy appears quite substantial and the risk of higher inflation over the next 6 months or so seems clearly greater than the risk that inflation will fall below a desirable range." How strong is an economy with a dearth of good-paying jobs? How strong is an economy where debt increases faster than GDP? How strong is an economy with almost no national savings? How strong is an economy when inflation outpaces wages?
Wal-Mart's March same-store sales increased 4.2%. Food sales were, once again, the star performer. Did you see where the company has begun to sell pets online?
Saturday, April 02, 2005
Liquidity Excesses
4/2/05 Liquidity Excesses
The on-going creation of excess liquidity and credit will cause our economic system to lose consciousness. For example, how long can we generate close to $1.2 trillion in mortgage credit on a yearly basis?
Doug Noland: "The market pricing mechanism cannot self-correct in an era of uncontrolled finance."
Yesterday's nonfarm payroll report was pathetic for many reasons-- and not just the low number. The best the Commissioner could say was that 26,000 construction jobs, 16,000 health care jobs, 15,000 wholesale trade jobs, and 5,000 mining jobs were created. That was the extent of the good news. So what did our government do? They compounded the situation with an early release of the ISM Service Index numbers, which weren't due out until Tuesday. They showed greater-than-expected growth in non-manufacturing businesses; however, there was a sharp jump in consumer prices with the ISM Prices Paid Index jumping in March to 73 from 65.5 in February. It was the largest rise in more than one year. So, investors were left with poor job creation and inflation. That's not a tasty meal.
Gasoline futures hit an all-time high of $1.73 per gallon with crude jumping back up to $57.29 a barrel. Heating oil rose to $1.66 a gallon. Natural gas also participated in the inflation onslaught.
UK house prices experienced their biggest monthly fall in almost 10 years as prices fell 0.6% in March.
Sears announced a layoff of at least 250 at their headquarters.
Shanghai Securities News: "The time is right for China to adjust its exchange rate policy and a move may happen at any time."
Best Buy stated their earnings would be below street estimates and Cardinal Health mentioned that their 2005 earnings per share may be 10 cents less than forecast.
Paul Kasriel: "In 2004, total household spending represented a record 75.8% of GDP."
The financing needs of the U.S. government will aproximate $800 billion this year or almost $2.2 billion per day.
Toyota's March U.S. sales rose 12.3% from March 2004. They had the best first quarter sales in its 48 years of business in the U.S.
In the last five weeks, airfares have risen about $60 in price.
Gold is selling at approximately 7.5 times the price of crude oil. This is the lowest historical relationship.
Even with AIG stock selling at a 2-year low, its market cap still is $134 billion. By comparison, Berkshire Hathaway's is $110 billion.
Over the last 26 years, on a daily basis, the Pope has distinguished himself as a leader, and more importantly, as a human being. He will be remembered for his goodness.
The on-going creation of excess liquidity and credit will cause our economic system to lose consciousness. For example, how long can we generate close to $1.2 trillion in mortgage credit on a yearly basis?
Doug Noland: "The market pricing mechanism cannot self-correct in an era of uncontrolled finance."
Yesterday's nonfarm payroll report was pathetic for many reasons-- and not just the low number. The best the Commissioner could say was that 26,000 construction jobs, 16,000 health care jobs, 15,000 wholesale trade jobs, and 5,000 mining jobs were created. That was the extent of the good news. So what did our government do? They compounded the situation with an early release of the ISM Service Index numbers, which weren't due out until Tuesday. They showed greater-than-expected growth in non-manufacturing businesses; however, there was a sharp jump in consumer prices with the ISM Prices Paid Index jumping in March to 73 from 65.5 in February. It was the largest rise in more than one year. So, investors were left with poor job creation and inflation. That's not a tasty meal.
Gasoline futures hit an all-time high of $1.73 per gallon with crude jumping back up to $57.29 a barrel. Heating oil rose to $1.66 a gallon. Natural gas also participated in the inflation onslaught.
UK house prices experienced their biggest monthly fall in almost 10 years as prices fell 0.6% in March.
Sears announced a layoff of at least 250 at their headquarters.
Shanghai Securities News: "The time is right for China to adjust its exchange rate policy and a move may happen at any time."
Best Buy stated their earnings would be below street estimates and Cardinal Health mentioned that their 2005 earnings per share may be 10 cents less than forecast.
Paul Kasriel: "In 2004, total household spending represented a record 75.8% of GDP."
The financing needs of the U.S. government will aproximate $800 billion this year or almost $2.2 billion per day.
Toyota's March U.S. sales rose 12.3% from March 2004. They had the best first quarter sales in its 48 years of business in the U.S.
In the last five weeks, airfares have risen about $60 in price.
Gold is selling at approximately 7.5 times the price of crude oil. This is the lowest historical relationship.
Even with AIG stock selling at a 2-year low, its market cap still is $134 billion. By comparison, Berkshire Hathaway's is $110 billion.
Over the last 26 years, on a daily basis, the Pope has distinguished himself as a leader, and more importantly, as a human being. He will be remembered for his goodness.
Friday, April 01, 2005
April Fool's Day
4/1/05 April Fool's Day
Would you believe the first quarter turned out the way it did? The dollar gained 4.4%, the biggest increase since the first quarter of 2001, as the Fed continued to raise interest rates and the yield on the 2, 5, and 10-year Treasury bonds all went up. Only the 30-year declined- a mere 5 basis points. You went to the bank owning energy stocks and commodities. Crude rose over 27% to $55.40 per barrel. Heating oil climbed 30%, natural gas just shy of 25%, and unleaded gas a whopping 45.5%. Of course, the Fed stated inflation was not a significant problem; however, workers had a problem as their wages trailed inflation. In addition, personal incomes trailed the rate of spending, and, as a result, savings dropped to 0.6%---essentially no savings at all. Not to worry. We're importing savings from other nations to offset our twin tower deficits. If you owned real estate, the first quarter was certainly kind to you. The insanity continued as the average sale of a Manhattan apartment topped $1.2 million in the first quarter. Unfortunately, equity holders took it on the chin as the quarterly results for the Nasdaq showed a drop of 8.1%, for the Dow 2.59%, and the S&P 500 1.91%. Although the Conference Board's Help Wanted Index remained unchanged at 41, and although jobless claims rose by 20,000 in the latest week, and although the unemployment rate rose in the quarter, non-farm payroll jobs showed increases for each month in the first quarter. Of course, the average workweek did not improve and overtime was not increased. The quality of the jobs remain in question. It's quality not quantity. Even AIG can tell you that. The quarter came to an end with MMM announcing the closing of its plant in Stillwater, Minn. About 200 will lose their jobs as will 700 at DaimlerChrysler, 400 at Blockbuster, and 67 at Transmeta. It wouldn't be right to ignore Qwest's new $27.50 cash and stock bid for MCI. If they raise another 4 times, they'll be on a par with the Fed and the increases in interest rates. Lastly, we cannot ignore the declining consumer confidence in the U.S. It has not hampered spending but why should it? The consumer is borrowing the money. Since when did debt matter? Just look at our federal debt levels? We are not alone in declining confidence as Japan's business confidence fell to the lowest level in 1 year.
Since it is April's Fool Day, maybe a little cheer is in store. Crude spiked to $105 a barrel today. The dollar rose to its highest level in 4 years as nonfarm payrolls zoomed 500,000 in the month of March. Wages increased by 5 cents an hour. The Dow jumped 500 points as ExxonMobil rose to $100 a share. The Nasdaq was able to gain 1 point. Microsoft announced that their next new product would be released on time and without bugs. The Donald will pitch the ads for their new product, and, on the Apprentice, the contestants will have to prepare a market rollout campaign for the product. Coke released a new product-- mystery Coke. The winner must guess correctly what the new flavor is. The hint is--it rhymes with miss.
Back in the real world, all the economists with their doctorate degrees proved once again they know little about hiring. The nonfarm payrolls increased by a mere 110,000, the weakest gain in 8 months. In addition, due to revisions, hiring was reduced by 27,000 jobs for the January-February period. In March, the unemployment rate dropped to 5.2% from 5.4%; however, the average workweek and overtime hours shrank slightly and average hourly wages rose a paltry 4 cents. Nice work if you can get it. Get it if you try.
Would you believe the first quarter turned out the way it did? The dollar gained 4.4%, the biggest increase since the first quarter of 2001, as the Fed continued to raise interest rates and the yield on the 2, 5, and 10-year Treasury bonds all went up. Only the 30-year declined- a mere 5 basis points. You went to the bank owning energy stocks and commodities. Crude rose over 27% to $55.40 per barrel. Heating oil climbed 30%, natural gas just shy of 25%, and unleaded gas a whopping 45.5%. Of course, the Fed stated inflation was not a significant problem; however, workers had a problem as their wages trailed inflation. In addition, personal incomes trailed the rate of spending, and, as a result, savings dropped to 0.6%---essentially no savings at all. Not to worry. We're importing savings from other nations to offset our twin tower deficits. If you owned real estate, the first quarter was certainly kind to you. The insanity continued as the average sale of a Manhattan apartment topped $1.2 million in the first quarter. Unfortunately, equity holders took it on the chin as the quarterly results for the Nasdaq showed a drop of 8.1%, for the Dow 2.59%, and the S&P 500 1.91%. Although the Conference Board's Help Wanted Index remained unchanged at 41, and although jobless claims rose by 20,000 in the latest week, and although the unemployment rate rose in the quarter, non-farm payroll jobs showed increases for each month in the first quarter. Of course, the average workweek did not improve and overtime was not increased. The quality of the jobs remain in question. It's quality not quantity. Even AIG can tell you that. The quarter came to an end with MMM announcing the closing of its plant in Stillwater, Minn. About 200 will lose their jobs as will 700 at DaimlerChrysler, 400 at Blockbuster, and 67 at Transmeta. It wouldn't be right to ignore Qwest's new $27.50 cash and stock bid for MCI. If they raise another 4 times, they'll be on a par with the Fed and the increases in interest rates. Lastly, we cannot ignore the declining consumer confidence in the U.S. It has not hampered spending but why should it? The consumer is borrowing the money. Since when did debt matter? Just look at our federal debt levels? We are not alone in declining confidence as Japan's business confidence fell to the lowest level in 1 year.
Since it is April's Fool Day, maybe a little cheer is in store. Crude spiked to $105 a barrel today. The dollar rose to its highest level in 4 years as nonfarm payrolls zoomed 500,000 in the month of March. Wages increased by 5 cents an hour. The Dow jumped 500 points as ExxonMobil rose to $100 a share. The Nasdaq was able to gain 1 point. Microsoft announced that their next new product would be released on time and without bugs. The Donald will pitch the ads for their new product, and, on the Apprentice, the contestants will have to prepare a market rollout campaign for the product. Coke released a new product-- mystery Coke. The winner must guess correctly what the new flavor is. The hint is--it rhymes with miss.
Back in the real world, all the economists with their doctorate degrees proved once again they know little about hiring. The nonfarm payrolls increased by a mere 110,000, the weakest gain in 8 months. In addition, due to revisions, hiring was reduced by 27,000 jobs for the January-February period. In March, the unemployment rate dropped to 5.2% from 5.4%; however, the average workweek and overtime hours shrank slightly and average hourly wages rose a paltry 4 cents. Nice work if you can get it. Get it if you try.
Wednesday, March 30, 2005
Enthusiasm
3/31/05 Enthusiasm
According to the PricewaterhouseCoopers first quarter 2005 Korpacz
Real Estate Investor Survey(R), “as the U.S. economy continues to expand and market fundamentals continue to improve, more and more investors are feeling confident about the future and are willing to accept more risk,” said Peter Korpacz, director,
PricewaterhouseCoopers' Global Strategic Real Estate Research Practice. "As a
result, an increasing number of investors are pursuing value-added assets and
assets in secondary markets." At the same time, however, a number of investors may be showing a little too much confidence—based on what are perceived to be overly aggressive underwriting assumptions in their acquisitions, Korpacz noted. “The problem with being too aggressive is that underwriting projects may not pan out, especially for assets located in second-tier cities and for less premier assets where rental rates seem to lag national Class-A office trends,” Korpacz stated. And with competition still rampant -- 2004 saw an unprecedented level of capital spent on commercial real estate -- it is just
those secondary markets that are attracting more attention. In addition, with so many potential buyers vying for a limited number of offerings and sellers still controlling the majority of transactions, some potential buyers have begun to approach owners to try to negotiate "offmarket" (unadvertised) deals. By negotiating such deals, potential buyers are hoping to avoid the bidding frenzy that has become all too commonplace and
shows no sign of abating.
As we approached the opening of trading yesterday, only one out of every five stocks were trading above their 40-day moving average. As such, a contrarian would have surmised that a bounce was in order, and that’s what we got—a triple digit bounce in the Dow, the biggest one day advance in 4 months. It helped that the Energy Department stated crude supplies rose 5.4 million barrels for the week ended March 25. As a result, crude dipped below $53 a barrel. However, a rally followed and crude closed at $53.99 as the Energy Department also reported that gasoline inventories fell 2.9 million barrels and distillate supplies dropped 1.1 million barrels.
Johnson Controls plans to close its Goshen, Indiana factory, and 167 workers will lose their jobs. Most of the work will be sent to a company plant in Mexico.
AIG said in a statement today that accounting errors and changes may result in a reduction of as much as 2 percent in shareholders' equity. The company last reported shareholders' equity of $82.9 billion.
We have seen a palace coup at Disney and one may be in the making at Morgan Stanley.
Clif Droke: “A growing list of indicators and data suggest a slowing down of credit growth and a return to a more "normal" level of economic activity. Unfortunately, however, the rate of change slowdown that we'll likely experience this year will seem dramatic to some compared to the opulent growth of the past 2-3 years. Investors who have over-extended themselves with debt will suffer the most while those who have built up ample supplies of cash will fare best.”
The Internal Revenue Service reported Tuesday that the gap between taxes paid and taxes owed stood at more than $300 billion, with a large portion resulting from people not reporting income.
With plummeting profit margins in China, GM’s 2005 net earnings in that country might slide below $100 million, a drop from 2004 of approximately 80%. In my view, China’s housing bubble will be the next to go. China’s economy is on its way to a hard landing.
Robert Wibbelsman: "The problem with the person who thinks he's a long-term investor and impervious to short-term gyrations is that the emotion of fear and pain will eventually make him sell badly."
According to the PricewaterhouseCoopers first quarter 2005 Korpacz
Real Estate Investor Survey(R), “as the U.S. economy continues to expand and market fundamentals continue to improve, more and more investors are feeling confident about the future and are willing to accept more risk,” said Peter Korpacz, director,
PricewaterhouseCoopers' Global Strategic Real Estate Research Practice. "As a
result, an increasing number of investors are pursuing value-added assets and
assets in secondary markets." At the same time, however, a number of investors may be showing a little too much confidence—based on what are perceived to be overly aggressive underwriting assumptions in their acquisitions, Korpacz noted. “The problem with being too aggressive is that underwriting projects may not pan out, especially for assets located in second-tier cities and for less premier assets where rental rates seem to lag national Class-A office trends,” Korpacz stated. And with competition still rampant -- 2004 saw an unprecedented level of capital spent on commercial real estate -- it is just
those secondary markets that are attracting more attention. In addition, with so many potential buyers vying for a limited number of offerings and sellers still controlling the majority of transactions, some potential buyers have begun to approach owners to try to negotiate "offmarket" (unadvertised) deals. By negotiating such deals, potential buyers are hoping to avoid the bidding frenzy that has become all too commonplace and
shows no sign of abating.
As we approached the opening of trading yesterday, only one out of every five stocks were trading above their 40-day moving average. As such, a contrarian would have surmised that a bounce was in order, and that’s what we got—a triple digit bounce in the Dow, the biggest one day advance in 4 months. It helped that the Energy Department stated crude supplies rose 5.4 million barrels for the week ended March 25. As a result, crude dipped below $53 a barrel. However, a rally followed and crude closed at $53.99 as the Energy Department also reported that gasoline inventories fell 2.9 million barrels and distillate supplies dropped 1.1 million barrels.
Johnson Controls plans to close its Goshen, Indiana factory, and 167 workers will lose their jobs. Most of the work will be sent to a company plant in Mexico.
AIG said in a statement today that accounting errors and changes may result in a reduction of as much as 2 percent in shareholders' equity. The company last reported shareholders' equity of $82.9 billion.
We have seen a palace coup at Disney and one may be in the making at Morgan Stanley.
Clif Droke: “A growing list of indicators and data suggest a slowing down of credit growth and a return to a more "normal" level of economic activity. Unfortunately, however, the rate of change slowdown that we'll likely experience this year will seem dramatic to some compared to the opulent growth of the past 2-3 years. Investors who have over-extended themselves with debt will suffer the most while those who have built up ample supplies of cash will fare best.”
The Internal Revenue Service reported Tuesday that the gap between taxes paid and taxes owed stood at more than $300 billion, with a large portion resulting from people not reporting income.
With plummeting profit margins in China, GM’s 2005 net earnings in that country might slide below $100 million, a drop from 2004 of approximately 80%. In my view, China’s housing bubble will be the next to go. China’s economy is on its way to a hard landing.
Robert Wibbelsman: "The problem with the person who thinks he's a long-term investor and impervious to short-term gyrations is that the emotion of fear and pain will eventually make him sell badly."
confidence
3/30/05 Confidence
The Conference Board’s Consumer Confidence Index, a representative sample of 5,000 U.S. households, declined in March to 102.4 from February’s 104.4. It was the second consecutive monthly decline. The Present Situations Index and the Expectations Index both dipped too. The proportion of consumers anticipating their incomes to improve in the months ahead dropped to 16.7% from 18.7% in the prior month.
The Hudson Employment Index declined in March to 101.2 from February’s 102.0. It was the second consecutive decline in worker confidence in the employment market. The crop was driven primarily by declining optimism about personal finances—just 42% of workers now say their finances are getting better, down from 44% a month ago. Additionally, the number reporting that their situation is getting worse rose from 36% to 39%. The current Index figure is significantly lower than one year ago, when the March Index came in at 107.0.
Honda’s U.S. sales declined 8.3% in the first two months of 2005. Over the last 12 months, the company’s U.S. market share has dropped to 6.5% from 7%. The problem lies with declining sales for the Accord and the Civic. Honda offers the lowest incentives in the U.S.
Ralph Waldo Emerson: “ Most of the shadows of this life are caused by standing in one’s sunshine.”
Auto sales in China are expected to increase 10% this year; however, due to rising manufacturing costs, so far this year industry profits are down over 75%. This fact will show up in GM’s quarterly statements.
Daniel Gross: “From the beginning of 2001 to the end of 2003, the economy added $1.317 trillion in GDP and $4.2 trillion in debt. That means that each new dollar of economic output was accompanied by $3.19 in new debt.”
The Nasdaq is trading at a 5-month low. The Dow was recently at 10,900, and last night it settled around 10,400. Last April, Berkshire Hathaway traded at $95,600 a share. Last night it closed at $86,800.
Congressman Ron Paul: “If the federal government won’t stop spending, borrowing, printing, and taxing, we may find ourselves in far worse shape than 30 years ago.”
National Textiles will close its Hodges, Alabama plant and cut 388 jobs. Automotive-parts maker Intermet will close its Decatur, Ill. foundry and 320 employees will lose their jobs. It is too early to tell exactly how the closing could affect its Archer Creek foundry in Lynchburg with its 500 employees.
The British Conservative Party’s commissioned report sated “Britons are facing a $1.92 trillion personal debt time-bomb. The sheer scale of consumer debt has made millions of households extremely vulnerable to shocks in the economy, both from fiscal mismanagement and external factors such as oil price rises, acts of terrorism, and wars. A downturn in the economy would create serious economic and social problems for the 15 million people who struggle with debt repayments.”
Clif Droke, the editor of the daily Durban Deep/XAU Report, mentioned that Dan Ferris, in his Extreme Value Newsletter, referenced a recently published study by real estate economist Michael Sklarz. The latter indicated it is less expensive to rent than to own in Honolulu, New York, Washington, San Francisco, and Southern California. It takes into account the mortgage tax deduction. Ferris observed that “it now makes good financial sense for owners to sell their homes and live in rentals.”
In the week ended March 25, applications for U.S. home mortgages increased 2.4%.
Japan’s February industrial production declined 2.1%, the biggest drop in a year.
China’s stock indexes fell to a 6-year low.
The State Council of China stated “excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability, and even influenced the health of the national economy.”
Ha Jiming, China International’s chief economist: “It’s better for the bubble to burst earlier than later.”
Among Americans who visit a doctor for a new condition, 54% do not treat it with a prescription drug within a year, according to new data from the market research firm Ipsos-Insight.
Albert Szent-Gyorgyi: “Discovery consists of seeing what everybody has seen and thinking what nobody has thought.”
U.S. corporations' before-tax profits from current production jumped 13.4 percent to $1.06 trillion annualized in the fourth quarter, the fastest increase since the second quarter of 1987, the Commerce Department estimated Wednesday. For the year, corporate profits were up 9.5 percent. The government data are adjusted for inventory valuations and capital consumption. There appears to be a disconnect between corporation profits and wages for workers. At what point does employee compensation overtake rising inflation?
The Conference Board’s Consumer Confidence Index, a representative sample of 5,000 U.S. households, declined in March to 102.4 from February’s 104.4. It was the second consecutive monthly decline. The Present Situations Index and the Expectations Index both dipped too. The proportion of consumers anticipating their incomes to improve in the months ahead dropped to 16.7% from 18.7% in the prior month.
The Hudson Employment Index declined in March to 101.2 from February’s 102.0. It was the second consecutive decline in worker confidence in the employment market. The crop was driven primarily by declining optimism about personal finances—just 42% of workers now say their finances are getting better, down from 44% a month ago. Additionally, the number reporting that their situation is getting worse rose from 36% to 39%. The current Index figure is significantly lower than one year ago, when the March Index came in at 107.0.
Honda’s U.S. sales declined 8.3% in the first two months of 2005. Over the last 12 months, the company’s U.S. market share has dropped to 6.5% from 7%. The problem lies with declining sales for the Accord and the Civic. Honda offers the lowest incentives in the U.S.
Ralph Waldo Emerson: “ Most of the shadows of this life are caused by standing in one’s sunshine.”
Auto sales in China are expected to increase 10% this year; however, due to rising manufacturing costs, so far this year industry profits are down over 75%. This fact will show up in GM’s quarterly statements.
Daniel Gross: “From the beginning of 2001 to the end of 2003, the economy added $1.317 trillion in GDP and $4.2 trillion in debt. That means that each new dollar of economic output was accompanied by $3.19 in new debt.”
The Nasdaq is trading at a 5-month low. The Dow was recently at 10,900, and last night it settled around 10,400. Last April, Berkshire Hathaway traded at $95,600 a share. Last night it closed at $86,800.
Congressman Ron Paul: “If the federal government won’t stop spending, borrowing, printing, and taxing, we may find ourselves in far worse shape than 30 years ago.”
National Textiles will close its Hodges, Alabama plant and cut 388 jobs. Automotive-parts maker Intermet will close its Decatur, Ill. foundry and 320 employees will lose their jobs. It is too early to tell exactly how the closing could affect its Archer Creek foundry in Lynchburg with its 500 employees.
The British Conservative Party’s commissioned report sated “Britons are facing a $1.92 trillion personal debt time-bomb. The sheer scale of consumer debt has made millions of households extremely vulnerable to shocks in the economy, both from fiscal mismanagement and external factors such as oil price rises, acts of terrorism, and wars. A downturn in the economy would create serious economic and social problems for the 15 million people who struggle with debt repayments.”
Clif Droke, the editor of the daily Durban Deep/XAU Report, mentioned that Dan Ferris, in his Extreme Value Newsletter, referenced a recently published study by real estate economist Michael Sklarz. The latter indicated it is less expensive to rent than to own in Honolulu, New York, Washington, San Francisco, and Southern California. It takes into account the mortgage tax deduction. Ferris observed that “it now makes good financial sense for owners to sell their homes and live in rentals.”
In the week ended March 25, applications for U.S. home mortgages increased 2.4%.
Japan’s February industrial production declined 2.1%, the biggest drop in a year.
China’s stock indexes fell to a 6-year low.
The State Council of China stated “excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability, and even influenced the health of the national economy.”
Ha Jiming, China International’s chief economist: “It’s better for the bubble to burst earlier than later.”
Among Americans who visit a doctor for a new condition, 54% do not treat it with a prescription drug within a year, according to new data from the market research firm Ipsos-Insight.
Albert Szent-Gyorgyi: “Discovery consists of seeing what everybody has seen and thinking what nobody has thought.”
U.S. corporations' before-tax profits from current production jumped 13.4 percent to $1.06 trillion annualized in the fourth quarter, the fastest increase since the second quarter of 1987, the Commerce Department estimated Wednesday. For the year, corporate profits were up 9.5 percent. The government data are adjusted for inventory valuations and capital consumption. There appears to be a disconnect between corporation profits and wages for workers. At what point does employee compensation overtake rising inflation?
Tuesday, March 29, 2005
Ebb And Flow
3/29/05 Ebb And Flow
Yesterday, the dollar traded at a 6-week high versus the euro, the Swiss franc, and sterling, and a 5-week high versus the yen. With a vision of higher interest rates in coming months, there has been a greater appetite for the greenback. The rally is welcome; however, it is but a bounce within a bear market for the dollar. We’ll see how large everyone’s dollar balls are after China revalues the yuan.
Crude declined 79 cents to $54.05 a barrel. However, gas at the pump rose to $2.19 a gallon.
The Conference Board’s Consumer Confidence Index likely declined in March. It still stands at lofty levels. Until real estate prices undermine confidence, downward direction will be limited. At the same time, the Rydex Advisor Confidence Index, modeled after the Consumer Confidence Index, captures the sentiments of 150 independent registered investment advisors. The Index has been on the decline since December, but edged up in March to 119.90 from 118.08 in February. In March 2004, the Index stood at 122.06.
Mark Twain: “All you need in this life is ignorance and confidence, and then success is sure.”
Steelcase will close two Eastern Avenue plants in Michigan and cut 600 jobs. Delta Airlines will reduce employment by 6,000 to 7,000.
Frank Zarb will replace Hank Greenberg as chairman of AIG.
Wal-Mart shares are edging closer to $50 and Coke’s stock is approaching $40.
France’s business confidence dropped to its lowest level in 15 months. Japan’s household spending declined and unemployment rose. Presently, about one-fifth of Japan’s trade is with China and rising on a yearly basis.
2-year Treasury bonds are yielding 3.86%. The Treasury is auctioning $24 billion of these notes tomorrow. As the yield approaches 4%, they should represent significant competition for equities.
Howard Silverblatt of Standard & Poor’s noted the spread between operating earnings and generally accepted accounting principles rose to 22.3% in the fourth quarter of 2004 versus only 11.3% in the like period one year earlier. Frequently, a high spread can equate to lower quality of earnings. Silverblatt mentioned GE cutting its tax liability in 2004. This provided a non-operational boost to earnings.
More than $20 billion in major cardiovascular drug revenues will be exposed to patent
expiration in the next three to five years.
On April 1, the Skagit County (WA) Tulip Festival begins. For those of you who have not been to Holland, I strongly recommend a visit to Roozengaarde’s acres upon acres of tulips. They also ship bulbs and fresh tulips. The variety is remarkable.
Earl Gray Stevens: “Confidence, like art, never comes from having all the answers; it comes from being open to all the questions.”
Retail sales fell 1.0 percent in the week ended March 26, compared with a 0.2 percent increase the previous week, the International Council of Shopping Centers and UBS said in a joint report. “This past week, the overall pace of sales was inflated by holiday shopping for Easter food, candy and seasonal apparel,'' said Michael Niemira, ICSC's chief economist and director of research.
Yesterday, the dollar traded at a 6-week high versus the euro, the Swiss franc, and sterling, and a 5-week high versus the yen. With a vision of higher interest rates in coming months, there has been a greater appetite for the greenback. The rally is welcome; however, it is but a bounce within a bear market for the dollar. We’ll see how large everyone’s dollar balls are after China revalues the yuan.
Crude declined 79 cents to $54.05 a barrel. However, gas at the pump rose to $2.19 a gallon.
The Conference Board’s Consumer Confidence Index likely declined in March. It still stands at lofty levels. Until real estate prices undermine confidence, downward direction will be limited. At the same time, the Rydex Advisor Confidence Index, modeled after the Consumer Confidence Index, captures the sentiments of 150 independent registered investment advisors. The Index has been on the decline since December, but edged up in March to 119.90 from 118.08 in February. In March 2004, the Index stood at 122.06.
Mark Twain: “All you need in this life is ignorance and confidence, and then success is sure.”
Steelcase will close two Eastern Avenue plants in Michigan and cut 600 jobs. Delta Airlines will reduce employment by 6,000 to 7,000.
Frank Zarb will replace Hank Greenberg as chairman of AIG.
Wal-Mart shares are edging closer to $50 and Coke’s stock is approaching $40.
France’s business confidence dropped to its lowest level in 15 months. Japan’s household spending declined and unemployment rose. Presently, about one-fifth of Japan’s trade is with China and rising on a yearly basis.
2-year Treasury bonds are yielding 3.86%. The Treasury is auctioning $24 billion of these notes tomorrow. As the yield approaches 4%, they should represent significant competition for equities.
Howard Silverblatt of Standard & Poor’s noted the spread between operating earnings and generally accepted accounting principles rose to 22.3% in the fourth quarter of 2004 versus only 11.3% in the like period one year earlier. Frequently, a high spread can equate to lower quality of earnings. Silverblatt mentioned GE cutting its tax liability in 2004. This provided a non-operational boost to earnings.
More than $20 billion in major cardiovascular drug revenues will be exposed to patent
expiration in the next three to five years.
On April 1, the Skagit County (WA) Tulip Festival begins. For those of you who have not been to Holland, I strongly recommend a visit to Roozengaarde’s acres upon acres of tulips. They also ship bulbs and fresh tulips. The variety is remarkable.
Earl Gray Stevens: “Confidence, like art, never comes from having all the answers; it comes from being open to all the questions.”
Retail sales fell 1.0 percent in the week ended March 26, compared with a 0.2 percent increase the previous week, the International Council of Shopping Centers and UBS said in a joint report. “This past week, the overall pace of sales was inflated by holiday shopping for Easter food, candy and seasonal apparel,'' said Michael Niemira, ICSC's chief economist and director of research.
Ebb And Flow
3/29/05 Ebb And Flow
Yesterday, the dollar traded at a 6-week high versus the euro, the Swiss franc, and sterling, and a 5-week high versus the yen. With a vision of higher interest rates in coming months, there has been a greater appetite for the greenback. The rally is welcome; however, it is but a bounce within a bear market for the dollar. We’ll see how large everyone’s dollar balls are after China revalues the yuan.
Crude declined 79 cents to $54.05 a barrel. However, gas at the pump rose to $2.19 a gallon.
The Conference Board’s Consumer Confidence Index likely declined in March. It still stands at lofty levels. Until real estate prices undermine confidence, downward direction will be limited. At the same time, the Rydex Advisor Confidence Index, modeled after the Consumer Confidence Index, captures the sentiments of 150 independent registered investment advisors. The Index has been on the decline since December, but edged up in March to 119.90 from 118.08 in February. In March 2004, the Index stood at 122.06.
Mark Twain: “All you need in this life is ignorance and confidence, and then success is sure.”
Steelcase will close two Eastern Avenue plants in Michigan and cut 600 jobs. Delta Airlines will reduce employment by 6,000 to 7,000.
Frank Zarb will replace Hank Greenberg as chairman of AIG.
Wal-Mart shares are edging closer to $50 and Coke’s stock is approaching $40.
France’s business confidence dropped to its lowest level in 15 months. Japan’s household spending declined and unemployment rose. Presently, about one-fifth of Japan’s trade is with China and rising on a yearly basis.
2-year Treasury bonds are yielding 3.86%. The Treasury is auctioning $24 billion of these notes tomorrow. As the yield approaches 4%, they should represent significant competition for equities.
Howard Silverblatt of Standard & Poor’s noted the spread between operating earnings and generally accepted accounting principles rose to 22.3% in the fourth quarter of 2004 versus only 11.3% in the like period one year earlier. Frequently, a high spread can equate to lower quality of earnings. Silverblatt mentioned GE cutting its tax liability in 2004. This provided a non-operational boost to earnings.
More than $20 billion in major cardiovascular drug revenues will be exposed to patent
expiration in the next three to five years.
On April 1, the Skagit County (WA) Tulip Festival begins. For those of you who have not been to Holland, I strongly recommend a visit to Roozengaarde’s acres upon acres of tulips. They also ship bulbs and fresh tulips. The variety is remarkable.
Earl Gray Stevens: “Confidence, like art, never comes from having all the answers; it comes from being open to all the questions.”
Retail sales fell 1.0 percent in the week ended March 26, compared with a 0.2 percent increase the previous week, the International Council of Shopping Centers and UBS said in a joint report. “This past week, the overall pace of sales was inflated by holiday shopping for Easter food, candy and seasonal apparel,'' said Michael Niemira, ICSC's chief economist and director of research.
Yesterday, the dollar traded at a 6-week high versus the euro, the Swiss franc, and sterling, and a 5-week high versus the yen. With a vision of higher interest rates in coming months, there has been a greater appetite for the greenback. The rally is welcome; however, it is but a bounce within a bear market for the dollar. We’ll see how large everyone’s dollar balls are after China revalues the yuan.
Crude declined 79 cents to $54.05 a barrel. However, gas at the pump rose to $2.19 a gallon.
The Conference Board’s Consumer Confidence Index likely declined in March. It still stands at lofty levels. Until real estate prices undermine confidence, downward direction will be limited. At the same time, the Rydex Advisor Confidence Index, modeled after the Consumer Confidence Index, captures the sentiments of 150 independent registered investment advisors. The Index has been on the decline since December, but edged up in March to 119.90 from 118.08 in February. In March 2004, the Index stood at 122.06.
Mark Twain: “All you need in this life is ignorance and confidence, and then success is sure.”
Steelcase will close two Eastern Avenue plants in Michigan and cut 600 jobs. Delta Airlines will reduce employment by 6,000 to 7,000.
Frank Zarb will replace Hank Greenberg as chairman of AIG.
Wal-Mart shares are edging closer to $50 and Coke’s stock is approaching $40.
France’s business confidence dropped to its lowest level in 15 months. Japan’s household spending declined and unemployment rose. Presently, about one-fifth of Japan’s trade is with China and rising on a yearly basis.
2-year Treasury bonds are yielding 3.86%. The Treasury is auctioning $24 billion of these notes tomorrow. As the yield approaches 4%, they should represent significant competition for equities.
Howard Silverblatt of Standard & Poor’s noted the spread between operating earnings and generally accepted accounting principles rose to 22.3% in the fourth quarter of 2004 versus only 11.3% in the like period one year earlier. Frequently, a high spread can equate to lower quality of earnings. Silverblatt mentioned GE cutting its tax liability in 2004. This provided a non-operational boost to earnings.
More than $20 billion in major cardiovascular drug revenues will be exposed to patent
expiration in the next three to five years.
On April 1, the Skagit County (WA) Tulip Festival begins. For those of you who have not been to Holland, I strongly recommend a visit to Roozengaarde’s acres upon acres of tulips. They also ship bulbs and fresh tulips. The variety is remarkable.
Earl Gray Stevens: “Confidence, like art, never comes from having all the answers; it comes from being open to all the questions.”
Retail sales fell 1.0 percent in the week ended March 26, compared with a 0.2 percent increase the previous week, the International Council of Shopping Centers and UBS said in a joint report. “This past week, the overall pace of sales was inflated by holiday shopping for Easter food, candy and seasonal apparel,'' said Michael Niemira, ICSC's chief economist and director of research.
Monday, March 28, 2005
The Nuance Of Thinking
3/28/05 The Nuance Of Thinking
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
The Nuance Of Thinking
3/28/05 The Nuance Of Thinking
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
The Nuance Of Thinking
3/28/05 The Nuance Of Thinking
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
The Nuance Of Thinking
3/28/05 The Nuance Of Thinking
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
Yuan deposits continue to mount. The time is approaching for the Chinese Premier to alter the current peg to the dollar by at least 4 to 5%. When he makes that decision, he will sleep better.
Henry Ford: “Thinking is the hardest work there is, which is probably the reason so few engage in it.”
Some weeks back, I mentioned the Motorola iRadio, a new service to download radio and MP3 music collections to cell phones with “seamless mobility.” With 10 hours of continuous programming, the music can be heard in a car, in a gym, or on the beach. Robert Unmacht, partner in In3 Partners, stated “iRadio is the beginning of many things to come.”
Silver Lake Partners and six other LBO firms announced an agreement to purchase SunGuard Data Systems for $36 a hare in cash or $11.3 billion. It is the largest LBO since the 1989 purchase of RJR Nabisco. Hopefully, this latest deal will prove more successful. Big is not necessarily better.
Qatar’s Abdullah bin Hamad al-Attiyah is a former president of OPEC. He stated yesterday that “we believe there is no shortage of supply. Traders aren’t asking for extra cargoes, so any output increase by the group must be carefully considered.” Last week the price of crude declined 3.3%. With well-stocked supplies, crude prices should continue to decline—at least in the short term. This should place a lid on energy related securities.
According to the Miami Herald, more than 55,000 residential condo units are in “some phase” of development. By comparison, only 7,000 condo units, according to the Miami Herald, were built over the last 10 years. The Florida Association of Realtors estimates the median sales price of an existing home at more than $300,000 in Miami-Dade. That’s up more than 28% in a year. As an officer of a large South Florida mortgage told the Herald, “our median incomes would indicate an affordable home is sub-$200,000.”
This Friday is April 1, the beginning of the second quarter. The Labor Department will release its employment report for March and GM and Ford will provide their sales for the month of March. In the meantime, the next four trading days shall be comprised of much window-dressing for the quarter. It can be compared to the world of staging prior to placing a home on the market for sale. Both are an illusion. It requires some original thought to realize what the true inside of a portfolio or the real inside of a home looks like in the day-to-day world.
Albert Einstein: “I think and think for months and years. Ninety-nine times, the conclusion is false. The hundredth time I am right.”
People getting tax refunds this year are averaging amounts of $2,294, according to the IRS.
BlogMatrix is first to market with an integrated podcasting/podcatching application. With BlogMatrix Sparks! podcasters can record podcasts directly on their computer with a microphone and a mouse click. Music can be mixed with the podcast. One can record up to 8 tracks for a single podcast. In addition, podcasts can be automatically stored on the BlogMatrix server for others to enjoy. As previously mentioned, a podcast is an online audio file stored on a website that can be automatically downloaded to your iPod or other portable media player. It enables the development of independent radio station programs as well as a usage for training and promotional messaging.
Sunday, March 27, 2005
Trends And Services
3/27/05 Trends And Services
Andrew E. Fekete: “There is no valid argument why the Treasury or the Federal Reserve banks should be given the privilege to issue liabilities which they had neither the means nor the intention to honor while the same, if committed by private parties, is treated as a serious crime punishable by severe penalties as specified by the Criminal Code. On the contrary, in jurisprudence the principle of double standard of justice is rejected, not just because it is unfair but, for the stronger reason, because it is self-defeating.” Basically, Professor Fekete is maintaining that the on-going issuance of Treasury debt securities can be likened to check kiting.
With the newly-found strength in the dollar, continued upward commodity prices are suspect at best. This is why I suggested cutting back on positions in both commodities and their sister stocks. Until the dollar fades once again, and it will, I would use short-term rallies to reduce positions in commodities and related stocks.
Wal-Mart, in its weekly Saturday update, stated the sale of Easter merchandise has been running slightly less than last year. In addition, because of unseasonable weather, the company is behind plan to launch sales for spring products.
Amazon recently launched a search engine called A9 that remembers everything you’ve searched for on its website.
Beginning in April, Visa will tack on a 1% charge any time its plastic card is utilized abroad.
The new Napster To Go music service, at $14.95 a month, offers the right to download as much music as you can get into a portable player. You can listen as often as you wish as log as you maintain your monthly subscription to the service.
GE’s finance arm is planning to acquire a bank in India.
India’s Science and Technology Minister stated the country’s biotech industry will achieve its target market size of $1 billion in 2005 and $5 billion by 2010.
Americans ponder what is left of our manufacturing base. The answer is our defense industry. For example, we are selling F-16 fighter planes to Pakistan. Another potential customer for our array of defense products is India.
As of March 15, short interest on the Nasdaq rose to 5.577 billion shares, its highest level ever, up from 5.357 billion in the previous month. Short interest on the NYSE, as of March 15, rose to 8.419 billion shares, up from 8.007 billion shares on February 15.
Andrew E. Fekete: “There is no valid argument why the Treasury or the Federal Reserve banks should be given the privilege to issue liabilities which they had neither the means nor the intention to honor while the same, if committed by private parties, is treated as a serious crime punishable by severe penalties as specified by the Criminal Code. On the contrary, in jurisprudence the principle of double standard of justice is rejected, not just because it is unfair but, for the stronger reason, because it is self-defeating.” Basically, Professor Fekete is maintaining that the on-going issuance of Treasury debt securities can be likened to check kiting.
With the newly-found strength in the dollar, continued upward commodity prices are suspect at best. This is why I suggested cutting back on positions in both commodities and their sister stocks. Until the dollar fades once again, and it will, I would use short-term rallies to reduce positions in commodities and related stocks.
Wal-Mart, in its weekly Saturday update, stated the sale of Easter merchandise has been running slightly less than last year. In addition, because of unseasonable weather, the company is behind plan to launch sales for spring products.
Amazon recently launched a search engine called A9 that remembers everything you’ve searched for on its website.
Beginning in April, Visa will tack on a 1% charge any time its plastic card is utilized abroad.
The new Napster To Go music service, at $14.95 a month, offers the right to download as much music as you can get into a portable player. You can listen as often as you wish as log as you maintain your monthly subscription to the service.
GE’s finance arm is planning to acquire a bank in India.
India’s Science and Technology Minister stated the country’s biotech industry will achieve its target market size of $1 billion in 2005 and $5 billion by 2010.
Americans ponder what is left of our manufacturing base. The answer is our defense industry. For example, we are selling F-16 fighter planes to Pakistan. Another potential customer for our array of defense products is India.
As of March 15, short interest on the Nasdaq rose to 5.577 billion shares, its highest level ever, up from 5.357 billion in the previous month. Short interest on the NYSE, as of March 15, rose to 8.419 billion shares, up from 8.007 billion shares on February 15.
Saturday, March 26, 2005
A Season For Change
3/26/05 A Season For Change
"Indiscriminate support of exports and foreign capital influx has created short-term economic problems, including excessive speculation in the property market and the economic decoupling of the fast-growing coastal areas with the rest of China," Guo Shuqing, director of the State Administration of Foreign Exchange (SAFE), said in an interview with China Daily. On Friday, Guo was named candidate chairman of the China Construction Bank Ltd. Guo observed "we should gradually reduce the preferential treatment to exports and seriously review our foreign investment policy...And trade surplus is not necessarily a good thing all the time...This kind of export growth is not sustainable...More than half of China's exports and overwhelming majority of high-tech manufacturing and trade are generated by foreign companies...China needs a strategy for more of a balanced development."
The dollar had its biggest weekly rise in 11 against both the euro and the yen. In a shortened trading week, the dollar index rose more than 2%. Do you think any of those short the dollar are getting nervous?
Bob Hoye: "Investors and traders should get prepared for a cyclical bear market in commodities."
Imported goods represent at least 36% of retail sales. How many apparel and textile jobs will be lost in 2005? More than 100,000?
At least 1,527 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
The Challenger, Gray & Christmas layoff data indicate that job cut announcements have averaged twice the level that held through the mid-1990s.
Ralph Wanger: “Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you'd better bind yourself to a style you can live with.”
A new USA/CNN/Gallup survey found Bush's approval rating dropped 7 points to 45%, representing the lowest point since taking office in January 2001.
2-year Treasury yields stand at 3.85%, the highest level in over 3 1/2 years. The spread between 2-year and 30-year Treasury bonds is down to 99 basis points. So much for concerns with the risk of time.
Henry Ford: “Speculation is only a word covering the making of money out of the manipulation of prices, instead of supplying goods and services.”
In the week of March 14, M3 declined $11.8 billion to $9.49 trillion; however, bank credit jumped by $40.3 billion to an all-time high of $7.04 trillion.
The Center for Drug Evaluation and Research stated this week that it approved 474 generic drugs in 2004, up from 364 in 2003. The Center approved 29 non-generic drugs ("priority drugs") in 2004, up from only 14 in 2003.
Thor Industries makes Citation and Chateau recreational vehicles at its plant in the Susquehanna Valley, PA. The union and the company have been unable to agree on a new contract. The company wanted to reduce seniority benefits, increase employee contributions for health insurance benefits, and reduce the present $15 per hour pay but provide bonuses if production incentives were met. The union voted 89 to 4 to reject the proposed contract. Thor stated that, unless the contract was approved, they would close the plant by April 15. The company employs about 160 union and management personnel at the plant.
Wal-Mart Stores Inc. stated this morning it expects March sales at U.S. stores to be similar to or greater than the 4.1 percent rise recorded for February.
According to the National Retail Federation, Easter is the fourth-largest spending holiday in the U.S. Easter arrived early this year, and that fact aided this month’s results for Wal-Mart, and that would be true for other retailers, such as, Target.
Mark Twain: "If you pick up a starving dog and make him prosperous,
he will not bite you. This is the principal difference between a dog and a man.”
"Indiscriminate support of exports and foreign capital influx has created short-term economic problems, including excessive speculation in the property market and the economic decoupling of the fast-growing coastal areas with the rest of China," Guo Shuqing, director of the State Administration of Foreign Exchange (SAFE), said in an interview with China Daily. On Friday, Guo was named candidate chairman of the China Construction Bank Ltd. Guo observed "we should gradually reduce the preferential treatment to exports and seriously review our foreign investment policy...And trade surplus is not necessarily a good thing all the time...This kind of export growth is not sustainable...More than half of China's exports and overwhelming majority of high-tech manufacturing and trade are generated by foreign companies...China needs a strategy for more of a balanced development."
The dollar had its biggest weekly rise in 11 against both the euro and the yen. In a shortened trading week, the dollar index rose more than 2%. Do you think any of those short the dollar are getting nervous?
Bob Hoye: "Investors and traders should get prepared for a cyclical bear market in commodities."
Imported goods represent at least 36% of retail sales. How many apparel and textile jobs will be lost in 2005? More than 100,000?
At least 1,527 members of the U.S. military have died since the beginning of the Iraq war in March 2003.
The Challenger, Gray & Christmas layoff data indicate that job cut announcements have averaged twice the level that held through the mid-1990s.
Ralph Wanger: “Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you'd better bind yourself to a style you can live with.”
A new USA/CNN/Gallup survey found Bush's approval rating dropped 7 points to 45%, representing the lowest point since taking office in January 2001.
2-year Treasury yields stand at 3.85%, the highest level in over 3 1/2 years. The spread between 2-year and 30-year Treasury bonds is down to 99 basis points. So much for concerns with the risk of time.
Henry Ford: “Speculation is only a word covering the making of money out of the manipulation of prices, instead of supplying goods and services.”
In the week of March 14, M3 declined $11.8 billion to $9.49 trillion; however, bank credit jumped by $40.3 billion to an all-time high of $7.04 trillion.
The Center for Drug Evaluation and Research stated this week that it approved 474 generic drugs in 2004, up from 364 in 2003. The Center approved 29 non-generic drugs ("priority drugs") in 2004, up from only 14 in 2003.
Thor Industries makes Citation and Chateau recreational vehicles at its plant in the Susquehanna Valley, PA. The union and the company have been unable to agree on a new contract. The company wanted to reduce seniority benefits, increase employee contributions for health insurance benefits, and reduce the present $15 per hour pay but provide bonuses if production incentives were met. The union voted 89 to 4 to reject the proposed contract. Thor stated that, unless the contract was approved, they would close the plant by April 15. The company employs about 160 union and management personnel at the plant.
Wal-Mart Stores Inc. stated this morning it expects March sales at U.S. stores to be similar to or greater than the 4.1 percent rise recorded for February.
According to the National Retail Federation, Easter is the fourth-largest spending holiday in the U.S. Easter arrived early this year, and that fact aided this month’s results for Wal-Mart, and that would be true for other retailers, such as, Target.
Mark Twain: "If you pick up a starving dog and make him prosperous,
he will not bite you. This is the principal difference between a dog and a man.”
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