9/17/05 Surveys
A new Wall Street Journal Online/Harris Interactive Personal Finance Poll finds that nearly one in five(19%) U.S. adults who purchased a home within the last three years for their primary residence say they spent above their suggested price range, while two-thirds (67%) stayed within their price range and 12% were below their price range. When obtaining a mortgage for their new home, recent homebuyers who used a mortgage broker, direct lender or another source were nearly three times more likely to obtain a fixed-rate mortgage (72%) than an adjustable-rate mortgage (26%), and fully a third (34%) opted for a creative or option mortgage.
The third quarter "CFO Outlook Survey" of 315 CFOs revealed that 46% stated their companies are absorbing most or all of the additional energy costs, while 7% are passing along most of the increased cost to their customers. Interestingly, the predominantly service companies that make up 29% of the survey stated they are not directly affected by the high oil prices. The survey indicated that hardest hit by the rising oil prices are the manufacturing companies where 60% stated they are absorbing the cost and another 28% are absorbing half and raising prices to cover the other half. Burton Rothberg, assistant professor of accounting at Baruch College, observed "as a result, we can expect corporate earnings or capital spending to be affected, at least until prices to customers are increased. Consumers, who are already bearing the brunt of high oil prices at the gas pump and bracing for higher home heating costs, will have more bad news down the road if and when companies decide to pass along more of the costs."
Google, the most-used Internet search engine, may consider making a bid for America Online to keep the company from switching to Microsoft Corp.'s search technology, a Merrill Lynch & Co. analyst said Friday. Google, which receives 12 percent of its sales from advertising and other fees generated by America Online, may make a bid to preserve that income, Merrill's Lauren Rich Fine wrote in a note to clients Friday. Losing AOL as a client would cut Google's earnings per share by 5 percent to 10 percent, she said.
Less than half of the Hurricane Katrina evacuees living in shelters in the Houston area want to go home again, according to a poll by the Washington Post and the Henry J. Kaiser Family Foundation. Forty-three percent said they want to move back home when they can. About the same number of evacuees -- 44 percent -- said they want to relocate, and most of them wanted to stay in Houston, said the poll published Friday.
The fifth round of tariff talks between the U.S. and China are scheduled in DC for 9/26 and 9/27. Meanwhile, Deputy Secretary of State Zoellick will give a major policy address on trade with China on Wednesday, Sept. 21.
Bill Bonner: "A more perfect 'nothing' is gold. It is a sort of anti-asset. It pays no interest. It issues no press releases. It offers no guidance on quarterly earnings; it has no earnings. It does no mergers, no acquisitions and it never restructures. It hires no celebrity CEOs. It offers no discounts. It makes no excuses. But it is the thing that goes up when other assets, including dollars, go down. Gold is as close to 'nothing' as you can get. Buy it."
I would like to come back to a discussion I initiated in 1998. Between then and 2001, you probably got tired of me writing about naked puts. Naturally, I couldn’t give a crap whether you got tired or not. Companies like Microsoft took billions into their income statement by selling naked puts. As the stock rose, the company booked the put premium as income. If the stock declined, then the company would be put those shares and use the shares for their stock option program. As long as the market didn’t get creamed, everything was just dandy. As we know, in 2000 the Nasdaq got decimated. This brings me to today. A very dangerous problem is developing. The markets have been range-bound for quite some time. This pancake-like look has been a picnic for those naked put sellers, and this time it is not being effectuated by the Microsofts of the world. It’s the hedge funds. Should an unforeseen jolt take place to the markets, the pancake would crumble. Who would stand ready to purchase what had been put? When it was Microsoft, there was no worry. They had over $20 billion in cash at all times. You had better hope that the "IHOP Market" continues. As an innocent bystander, you could get creamed.
Doug Noland: "Yet, fundamentally, it is the perception of relative safety and liquidity - with respect to the new financial instruments, financing arrangements and evolving markets - that is most culpable for the proclivity of securitization issuance to go to gross excess. This dynamic is, today, in extraordinary force throughout Wall Street "structured finance." As I have noted many times previously, The Moneyness of Credit – the capacity for creating Credit instruments with the perceived attributes of safety, stores of nominal value, and near-absolute liquidity – is an invaluable analytical tool, as we grasp for clearer understanding of the current peculiar inflationary boom. The "Moneyness" dynamic is especially precarious with regard to Wall Street finance. The greater the inflation of issuance, the seemingly more stable the underlying (inflated) collateral values, the more abundant general marketplace liquidity, and the more ingrained the market’s perception of the safety, soundness and liquidity of "structured finance." Yet, fundamentally, it is the perception of relative safety and liquidity - with respect to the new financial instruments, financing arrangements and evolving markets - that is most culpable for the proclivity of securitization issuance to go to gross excess. This dynamic is, today, in extraordinary force throughout Wall Street "structured finance."
Confucius: "The superior man, when resting in safety, does not forget that danger may come. When in a state of security he does not forget the possibility of ruin. When all is orderly, he does not forget that disorder may come. Thus his person is not endangered, and his States and all their clans are preserved."
The University of Michigan September Consumer Sentiment Survey plunged 14% from August to a 13-year low, while consumers’ inflation expectations rose to a 4-year high. It was not surprising that, with those fears of rising inflation, that gold would rise to a 17-year high of $463.30 an ounce. As thoughts of inflation imbued the grey matter of the Fed members, the yield on the 10-year treasury bonds rose to 4.27% and the spread with the 2-year widened to 30 basis points.
On the week, crude declined a dollar a barrel to $63.
At $43.87, shares of Wal-Mart hit a 3-year low, and they are approaching a 5-year low. Between 1999 and the present, the stock has traded in a range of $40 to $70, while the sales and earnings have been rising. Of the stocks in the Dow, can you give me a better long-term risk/reward?
China already accounts for 6% of world exports and its potential to supply the globe with low-cost manufactured goods has caused tensions in the global trading system, exemplified by the recent "bra wars" row. The OECD said China's share was on course to rise to 10% by 2010, by which time it would overtake the US. Despite 25 years of gross domestic product (GDP) growth at an annual rate of more than 9%, China is not expected to slow in the near future. The thinktank predicted that the world's most populous nation would overtake Britain, France and Italy to become the fourth largest economy within five years.
Lenny Bruce: " Take away the right to say "f**k" and you take away the right to say "f**k the government!"
Saturday, September 17, 2005
Thursday, September 15, 2005
The Outlook
9/16/05 The Outlook
Federal Reserve Bank of Philadelphia yesterday issued the following:
"The pace of activity in the region's manufacturing sector slowed in
September, according to firms polled for this month's survey. Indicators for
general activity and new orders fell substantially from their readings in
August and suggest little to no growth this month. Shipments increased but at
a slower pace, manufacturing employment and work hours were virtually steady, and firms again reported an increase in industrial prices. The region's
manufacturing executives were significantly less optimistic about future
activity than in August."
George Carlin: "Fighting for peace is like screwing for virginity"
With home affordability historically high, an oversupply of housing units and lack of rental demand have combined to weaken the REITs market on a fundamental level, says Standard & Poor's in a special report to be published on Monday, September 19. However, rising interest rates and/or a decline in housing prices could dramatically improve the REIT outlook as new households and even some existing homeowners gravitate toward rental housing. The report is the cover story in CreditWeek, the
investment research leader's weekly magazine on credit risk.
Andrew Liveris, Chief Executive Officer of The Dow Chemical Company, warned today that the persistently high price of oil and natural gas, exacerbated in the wake of Hurricane Katrina, poses a severe threat to the long-term health of the chemical industry in the United States. "For two and a half years or more our industry has done all that it can to mitigate the impact of escalating feedstock and energy costs, which have been particularly severe in relation to US natural gas," said Liveris.
"We've been sharply focused on reducing operating expenses, improving
energy efficiency, increasing productivity and generally controlling those
things we are able to control in an effort to address this unprecedented
challenge."But right now, with oil and natural gas prices at astronomically high levels and showing no signs of receding, the US chemical industry faces the very real risk of being unable to invest in its own future in this country."
Rep. Ron Paul: "Many reasons have been given for why we fight and our youth must die in Iraq. The reasons now given for why we must continue this war bear no resemblance to the reasons given to gain the support of the American people and the United States Congress prior to our invasion in March of 2003. Before the war, we were told we faced an imminent threat to our national security from Saddam Hussein. This rationale, now proven grossly mistaken, has been changed. Now we’re told we must honor the fallen by "completing the mission."
9/16 BusinessWeek: "Microsoft has lost several key executives in recent months, many to upstart rivals. Google has picked off 100 former Microsofties alone. Why? Because employees say the software giant has slowed as it's moved into middle age. The challenges: morale, bureaucracy and impediments to innovation. If Microsoft can't fix the problem, it could find itself in the same situation as IBM did when Microsoft was the hot upstart on the scene two decades ago."
Ken Simonson, chief economist of the Associated General Contractors of America: "There are 700,000 construction businesses in the U.S., which employ 7.2 million. The value of construction, measuring payroll and materials, is $1.1 trillion, or 8.5% of annual gross domestic product."
The agency that insures pensions for millions of workers may have a shortfall of almost $87 billion during the next 10 years, the Congressional Budget Office (CBO) said. The deficit at the Pension Benefit Guaranty Corp. (PBGC) raises "the specter of a sharply reduced pension for some insured workers or the need to provide taxpayers' dollars to the PBGC," the budget office said in a report yesterday. When was the last time a government agency correctly forecast a deficit?
Wilbur L. Ross Jr. Ross has bought a majority of the $750 million in bank debt of Collins & Aikman, a bankrupt maker of carpets, consoles and other interior parts. That debt could be converted to stock and a significant ownership of the company when it emerges from bankruptcy protection.
Ross said Thursday that he is interested in buying Delphi Corp., the nation's largest auto supplier, if it were put up for sale or files for bankruptcy, which it has said repeatedly that it might do.
Real average weekly earnings fell by 0.5 percent from July to August after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.1 percent increase in average hourly earnings was more than offset by a 0.6 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Average weekly hours were unchanged. If you believe the consumer will continue his/her spending ways way into the future, forget it. When the equity line of credit on the home runs out, the spending spiggot will be turned off.
Swiss scientists have developed a vaccine that blocks the pleasure factor in smoking leaving the smoker with no kick, reports news portal Annanova.The anti-nicotine injection, CYT002 - NicQb, patented by Swiss pharmaceutical firm Cytos, works by building antibodies in the blood that stop nicotine from getting to the brain, it said. The vaccine has so far proved to be successful as it has already passed one preliminary test. Forty percent of the participating smokers quit within nine months since being injected with the drug. University of Lausanne professor Jacques Cornuz, who helped develop the anti-nicotine injection, said: "The results have exceeded our expectations." Before the injection the participants had all smoked between 10 and 40 cigarettes a day. The vaccine is expected to be in the market by 2010. There are about 1.3 billion smokers worldwide.
The FTSEurofirst 300 index of leading European shares rose 0.6 percent to 1,214.35 points, its highest intra-day level since May 2002, and the DJ Stoxx basic resources index rose 1.9 percent to a new all-time high of 355.9. At $459 an ounce, gold closed at a 17-year high and Goldcorp at $20+ closed at a new all-time high.
Northwest Airlines will cut 400 pilots.
Jon Stewart: "This is inarguably a failure of leadership from the top of the federal government. Remember when Bill Clinton went out with Monica Lewinsky. That was inarguably a failure of judgment at the top. Democrats had to come out and risk losing credibility if they did not condemn Bill Clinton for his behavior. I believe Republicans are in the same position right now. And I will say this: Hurricane Katrina is George Bush's Monica Lewinsky. The only difference is that tens of thousands of people weren't stranded in Monica Lewinsky's vagina."
Federal Reserve Bank of Philadelphia yesterday issued the following:
"The pace of activity in the region's manufacturing sector slowed in
September, according to firms polled for this month's survey. Indicators for
general activity and new orders fell substantially from their readings in
August and suggest little to no growth this month. Shipments increased but at
a slower pace, manufacturing employment and work hours were virtually steady, and firms again reported an increase in industrial prices. The region's
manufacturing executives were significantly less optimistic about future
activity than in August."
George Carlin: "Fighting for peace is like screwing for virginity"
With home affordability historically high, an oversupply of housing units and lack of rental demand have combined to weaken the REITs market on a fundamental level, says Standard & Poor's in a special report to be published on Monday, September 19. However, rising interest rates and/or a decline in housing prices could dramatically improve the REIT outlook as new households and even some existing homeowners gravitate toward rental housing. The report is the cover story in CreditWeek, the
investment research leader's weekly magazine on credit risk.
Andrew Liveris, Chief Executive Officer of The Dow Chemical Company, warned today that the persistently high price of oil and natural gas, exacerbated in the wake of Hurricane Katrina, poses a severe threat to the long-term health of the chemical industry in the United States. "For two and a half years or more our industry has done all that it can to mitigate the impact of escalating feedstock and energy costs, which have been particularly severe in relation to US natural gas," said Liveris.
"We've been sharply focused on reducing operating expenses, improving
energy efficiency, increasing productivity and generally controlling those
things we are able to control in an effort to address this unprecedented
challenge."But right now, with oil and natural gas prices at astronomically high levels and showing no signs of receding, the US chemical industry faces the very real risk of being unable to invest in its own future in this country."
Rep. Ron Paul: "Many reasons have been given for why we fight and our youth must die in Iraq. The reasons now given for why we must continue this war bear no resemblance to the reasons given to gain the support of the American people and the United States Congress prior to our invasion in March of 2003. Before the war, we were told we faced an imminent threat to our national security from Saddam Hussein. This rationale, now proven grossly mistaken, has been changed. Now we’re told we must honor the fallen by "completing the mission."
9/16 BusinessWeek: "Microsoft has lost several key executives in recent months, many to upstart rivals. Google has picked off 100 former Microsofties alone. Why? Because employees say the software giant has slowed as it's moved into middle age. The challenges: morale, bureaucracy and impediments to innovation. If Microsoft can't fix the problem, it could find itself in the same situation as IBM did when Microsoft was the hot upstart on the scene two decades ago."
Ken Simonson, chief economist of the Associated General Contractors of America: "There are 700,000 construction businesses in the U.S., which employ 7.2 million. The value of construction, measuring payroll and materials, is $1.1 trillion, or 8.5% of annual gross domestic product."
The agency that insures pensions for millions of workers may have a shortfall of almost $87 billion during the next 10 years, the Congressional Budget Office (CBO) said. The deficit at the Pension Benefit Guaranty Corp. (PBGC) raises "the specter of a sharply reduced pension for some insured workers or the need to provide taxpayers' dollars to the PBGC," the budget office said in a report yesterday. When was the last time a government agency correctly forecast a deficit?
Wilbur L. Ross Jr. Ross has bought a majority of the $750 million in bank debt of Collins & Aikman, a bankrupt maker of carpets, consoles and other interior parts. That debt could be converted to stock and a significant ownership of the company when it emerges from bankruptcy protection.
Ross said Thursday that he is interested in buying Delphi Corp., the nation's largest auto supplier, if it were put up for sale or files for bankruptcy, which it has said repeatedly that it might do.
Real average weekly earnings fell by 0.5 percent from July to August after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. A 0.1 percent increase in average hourly earnings was more than offset by a 0.6 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Average weekly hours were unchanged. If you believe the consumer will continue his/her spending ways way into the future, forget it. When the equity line of credit on the home runs out, the spending spiggot will be turned off.
Swiss scientists have developed a vaccine that blocks the pleasure factor in smoking leaving the smoker with no kick, reports news portal Annanova.The anti-nicotine injection, CYT002 - NicQb, patented by Swiss pharmaceutical firm Cytos, works by building antibodies in the blood that stop nicotine from getting to the brain, it said. The vaccine has so far proved to be successful as it has already passed one preliminary test. Forty percent of the participating smokers quit within nine months since being injected with the drug. University of Lausanne professor Jacques Cornuz, who helped develop the anti-nicotine injection, said: "The results have exceeded our expectations." Before the injection the participants had all smoked between 10 and 40 cigarettes a day. The vaccine is expected to be in the market by 2010. There are about 1.3 billion smokers worldwide.
The FTSEurofirst 300 index of leading European shares rose 0.6 percent to 1,214.35 points, its highest intra-day level since May 2002, and the DJ Stoxx basic resources index rose 1.9 percent to a new all-time high of 355.9. At $459 an ounce, gold closed at a 17-year high and Goldcorp at $20+ closed at a new all-time high.
Northwest Airlines will cut 400 pilots.
Jon Stewart: "This is inarguably a failure of leadership from the top of the federal government. Remember when Bill Clinton went out with Monica Lewinsky. That was inarguably a failure of judgment at the top. Democrats had to come out and risk losing credibility if they did not condemn Bill Clinton for his behavior. I believe Republicans are in the same position right now. And I will say this: Hurricane Katrina is George Bush's Monica Lewinsky. The only difference is that tens of thousands of people weren't stranded in Monica Lewinsky's vagina."
9/15/05 Uncommon Value
After four consecutive years of double-digit increases, Starbucks expects to spend about $200 million this year for health care for its 80,000 U.S. employees — more than the total amount it spends on green coffee from Africa, Indonesia and other countries. It’s no wonder theses costs are described by the company’s chairman as "unsustainable."
It’s not every day that two airlines (Delta and Northwest) file for bankruptcy on the same day. If that were not enough, Newell Rubbermaid stated it would close 1/3 of its factories and eliminate 5,000 jobs.
In 1966 Greenspan wrote: "The excess credit which the Fed pumped into the economy spilled over into the stock market - triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in breaking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed."
Crude is trading at $65+ a barrel. It’s still to early to say that the price of gasoline has peaked on a long-term basis. As for returning to $35 a barrel as predicted by Steve Forbes, anything is possible; however, he has a better chance of being elected president than his prediction coming true—in my view.
Sears Canada announced Wednesday that it intends to cut $100 million in costs by next year by eliminating jobs, closing merchandise-buying offices and making other "operating efficiency improvements."
On a year-over-year basis, producer prices have increased 5.1%, the fastest pace since December 1990.
China has edged out Canada for the first time, taking top spot in exports to the United States in July, according to international trade data released this week.
China will not adjust its currency's exchange rate through another revaluation, a senior central bank official said Thursday, responding to questions about speculation over such a move. Yi Gang, an assistant to the governor of the People's Bank of China, Zhou Xiaochuan, said Beijing was confident it can keep the yuan stable while allowing it to adjust gradually to market pressures under what it calls a "managed floating regime."
"The exchange rate would continue to be set by the managed floating regime rather than by official revaluation," Yi told Dow Jones News.
Gary Lammert, The Economic Fractalist, written on Sept. 13: "Tuesday September 13 was day 26 of a 28 day ideal second fractal decay pattern. Wednesday and Thursday, 14 and 15 September 2005 should ideally be down days for the Wilshire ending the second decay fractal of 28 days of a three sequence : 11/(28 of 28)/ 28 ideal daily decay fractal
pattern. An ideal next high for the third and final decay fractal would be on day 104 of a 52/130/96(day 96 =Tuesday13 September) of a 104 day sequence. The ideal final high of this nearly identical 1929 decay fractal pattern would be on day 7 of a 11/28/(7 of 28 )day sequence. If the fractal pattern identification is correct the last 28 days representing the third decay fractal will be the major primary crash sequence equivalent to the final third
fractal of 27 days seen in the fall and Fall of 1929."
Most people believe their government does not act according to their wishes, a worldwide opinion survey shows. Lack of confidence in governments is highest in the former Soviet bloc, where 75% say their country is not governed by the will of the people, but similar views are held by most Europeans (64%) and North Americans (60%).
The findings come from one of the largest international polls ever undertaken. Commissioned by the BBC World Service, Gallup interviewed more than 50,000 people in 68 countries, representative of the views of 1.3 billion people worldwide.
Google initiated its blogsearch service. In my view, it is far superior to that of Technorati.
China's fixed-asset investment grew 27.4 percent in the first eight months of 2005.
Yesterday’s Palatin conference call was quite illuminating. The company stated it would receive $20 million in milestone payments in their 2006 fiscal year, and the 40% fourth quarter growth rate for NeutroSpec indicates that $8 million from its share of the revenue for NeutroSpec in 2006 is a reasonable expectation. The company is placing increasing focus on the molecule-end of the business, the pipeline for obesity and congestive heart treatment products. In 2006, the annual loss should be reduced to approximately $6 million, and that is without a licensing deal with an international pharmaceutical company for these pipeline products. I believe by April-June 2006 such a deal is quite possible. Using a minimum of a 3-year holding period, I believe PTN is an uncommon value. At a market cap of $100 million, the stock does not, in my view, come close to approaching the current value for the company. In this case, patience is a virtue and the smart thing to have.
After four consecutive years of double-digit increases, Starbucks expects to spend about $200 million this year for health care for its 80,000 U.S. employees — more than the total amount it spends on green coffee from Africa, Indonesia and other countries. It’s no wonder theses costs are described by the company’s chairman as "unsustainable."
It’s not every day that two airlines (Delta and Northwest) file for bankruptcy on the same day. If that were not enough, Newell Rubbermaid stated it would close 1/3 of its factories and eliminate 5,000 jobs.
In 1966 Greenspan wrote: "The excess credit which the Fed pumped into the economy spilled over into the stock market - triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in breaking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed."
Crude is trading at $65+ a barrel. It’s still to early to say that the price of gasoline has peaked on a long-term basis. As for returning to $35 a barrel as predicted by Steve Forbes, anything is possible; however, he has a better chance of being elected president than his prediction coming true—in my view.
Sears Canada announced Wednesday that it intends to cut $100 million in costs by next year by eliminating jobs, closing merchandise-buying offices and making other "operating efficiency improvements."
On a year-over-year basis, producer prices have increased 5.1%, the fastest pace since December 1990.
China has edged out Canada for the first time, taking top spot in exports to the United States in July, according to international trade data released this week.
China will not adjust its currency's exchange rate through another revaluation, a senior central bank official said Thursday, responding to questions about speculation over such a move. Yi Gang, an assistant to the governor of the People's Bank of China, Zhou Xiaochuan, said Beijing was confident it can keep the yuan stable while allowing it to adjust gradually to market pressures under what it calls a "managed floating regime."
"The exchange rate would continue to be set by the managed floating regime rather than by official revaluation," Yi told Dow Jones News.
Gary Lammert, The Economic Fractalist, written on Sept. 13: "Tuesday September 13 was day 26 of a 28 day ideal second fractal decay pattern. Wednesday and Thursday, 14 and 15 September 2005 should ideally be down days for the Wilshire ending the second decay fractal of 28 days of a three sequence : 11/(28 of 28)/ 28 ideal daily decay fractal
pattern. An ideal next high for the third and final decay fractal would be on day 104 of a 52/130/96(day 96 =Tuesday13 September) of a 104 day sequence. The ideal final high of this nearly identical 1929 decay fractal pattern would be on day 7 of a 11/28/(7 of 28 )day sequence. If the fractal pattern identification is correct the last 28 days representing the third decay fractal will be the major primary crash sequence equivalent to the final third
fractal of 27 days seen in the fall and Fall of 1929."
Most people believe their government does not act according to their wishes, a worldwide opinion survey shows. Lack of confidence in governments is highest in the former Soviet bloc, where 75% say their country is not governed by the will of the people, but similar views are held by most Europeans (64%) and North Americans (60%).
The findings come from one of the largest international polls ever undertaken. Commissioned by the BBC World Service, Gallup interviewed more than 50,000 people in 68 countries, representative of the views of 1.3 billion people worldwide.
Google initiated its blogsearch service. In my view, it is far superior to that of Technorati.
China's fixed-asset investment grew 27.4 percent in the first eight months of 2005.
Yesterday’s Palatin conference call was quite illuminating. The company stated it would receive $20 million in milestone payments in their 2006 fiscal year, and the 40% fourth quarter growth rate for NeutroSpec indicates that $8 million from its share of the revenue for NeutroSpec in 2006 is a reasonable expectation. The company is placing increasing focus on the molecule-end of the business, the pipeline for obesity and congestive heart treatment products. In 2006, the annual loss should be reduced to approximately $6 million, and that is without a licensing deal with an international pharmaceutical company for these pipeline products. I believe by April-June 2006 such a deal is quite possible. Using a minimum of a 3-year holding period, I believe PTN is an uncommon value. At a market cap of $100 million, the stock does not, in my view, come close to approaching the current value for the company. In this case, patience is a virtue and the smart thing to have.
Wednesday, September 14, 2005
Increased Risk
9/14/05 Increased Risk
Mike Shedlock: "Rapidly decreasing margins on sub-prime loans in the face of rising delinquencies sure suggests evidence of increasing complacency and excessive risk taking in the mortgage loan industry."
U.S. employers are likely to increase hiring at a steady pace next quarter, but low optimism about hiring at retail and manufacturing companies could make for a bleak holiday season, according to the latest hiring outlook survey from Manpower Inc.
Two and one half years ago Fortune Magazine reported that Rumsfeld was instrumental in providing North Korea with "the design and key components of two light-weight nuclear reactors."
"Their(China's) prices are below our cost of production," said Octavio Pozo, spokesman for Mexico's National Council of Chili Producers. "We're worried." They should be worried. Look at what happened to the garlic industry in Gilroy, California. Chinese garlic was significantly cheaper and the quality did not suffer.
With nearly a billion dollars appropriated by Congress for the task last year, the United States still lacks uniform systems that can keep all emergency responders in touch.
"We're no better off than we were then," Louisiana State Sen. Robert Barham said last week.
George Bush: "We need an energy bill that encourages consumption."
China’s Hu Jintao: "What I would like to stress here is that China does not pursue a huge trade surplus with the United States and we’re willing to work with the United States to take effective measures to increase China’s imports from the United States."
As of yesterday’s close, 50% of the DJIA stocks were above their 30-dy moving average, 46+% above their 10-day moving average, and 33% above their 5-day moving average.
The IBD/TIPP Economic Optimism Index plummeted in September, dropping 9.7 points, or 19%, to reach 41.2, a new all-time low for the index. Over 50 means optimism; below 50 indicates pessimism. IBD/TIPP conducted the national poll of 909 adults from September 6 to September 11. The margin of error is +/-3.3 percentage points.
The Six-Month Economic Outlook, plunged 16.3 points, or 39%, to reach 29.0. This is 9.7 points below this component's previous all-time low reached in April of 2005.
The Personal Financial Outlook declined 12% from 57.7 to 50.8 – an all-time low for this component.
Confidence in Federal Economic Policies fell 5.6 points, or 11%, to 44.0 – another all-time low.
The nation's employers are anticipating close to a 10% increase in health-care costs in 2006, and consequently will be shifting more of that burden to their employees, according to a new Mercer Human Resource Consulting survey of more than 1,800 firms. That 10% increase would be if they leave benefits unchanged.
George Bush: "Katrina exposed serious problems in our response capability at all levels of government." With all due respect, 9/11 illustrated serious problems. During the past four years, billions have been expended on homeland security and several individual rights have perished. New Orleans proved that lack of leadership is at the forefront of our nation’s readiness problems.
Interior Secretary Gail Norton said 58 percent of Gulf oil production remains shut down, as does 38 percent of the region's natural gas production.
Peoples Energy told its customers to expect winter heating bills to be 39% higher than they were last year.
Approximately 350,000 gallons of oil spilled into the residential heart of Chalmette, La.
China's sales of luxurious products are expected to grow 20 pct annually till 2008, Xinhua news agency reported, citing a research report by Ernst & Young.
After 2008, the increase in luxurious products sales is expected to slow to about 10 pct until 2015. "By 2015, China will replace the US to become the world's second largest consumer of luxurious products," stated Kongwai Lee, a partner and industry leader of retail and consumer products of Ernst Young.
Latin America has become one of the top business partners of India in 2004-05 with the two-way trade growing by 77.66 percent to $3.5 billion, according the industry body Assocham.
Lenox Inc. plans to close 31 of its retail stores and end production of fine china at its Pomona, N.J., plant on Nov. 14, and stated the closings will result in the loss of 530 jobs, including 290 at the Pomona plant and 240 at the retail stores.
Ford President James Padilla: "We will align our capacity with demand and see how that falls.'' In other words, more plants may be on the chopping block.
The nationwide average price for self-serve regular gasoline has dropped 10.1 cents per gallon since reaching a new record high of $3.057 on Labor Day, September 5, 2005. Today's nationwide average price of $2.956 is 51.6 cents more expensive than it was one month ago and $1.115 higher than last year at this time.
Zhang Guobao, China's deputy director of the National Development and Reform Commission, stated China is expected to produce 180 million tons of crude in 2005, up from 175 million tons in 2004. In addition, last year China imported 117 million tons of crude. Zhang did not state how many tons would be imported in 2005.
Through July, the trade deficit is 18% larger than one year ago and 40% higher than 2 years ago.
What would the U.S. Federal deficit in 2005 be if the cost of the Iraq war and the cost for FEMA were included?
Palatin Technologies, Inc. announced today results for its fourth quarter and fiscal year ended June 30, 2005. Total revenues in the quarter ended June 30, 2005 were $5.8 million, compared to less than $0.1 million for the same period in 2004. Palatin reported a net loss of $5.1 million, or ($0.09) per basic and diluted share, for the quarter ended June 30, 2005, compared to a net loss of $7.0 million, or ($0.13) per basic and diluted share, for the same period in 2004. At June 30, 2005, the Company had cash, cash equivalents and investments totaling $18.1 million, compared with 20.4 million one year ago.
The decrease in the net loss for the quarter ended June 30, 2005 versus the quarter ended June 30, 2004 was primarily attributable to revenue recognized in the current period under the Company's collaboration agreement with King Pharmaceuticals, Inc. (King) related to PT-141, a drug under development to treat male and female sexual dysfunction, and product revenue from NeutroSpec(TM), approved by the FDA in July 2004 for the imaging of patients with equivocal signs and symptoms of appendicitis. These revenues offset higher development costs and other operating expenses.
For the years ended June 30, 2005 and 2004, total revenues were $18.0 million and $2.3 million, respectively. Palatin's net loss for the year ended June 30, 2005 was $14.4 million, or ($0.27) per basic and diluted share, compared to a net loss of $26.3 million, or ($0.55) per basic and diluted share, for the year ended June 30, 2004.
"We are pleased with the quarter and our progress to date," said Stephen T. Wills, chief financial officer of Palatin. "Commercial sales of NeutroSpec continue to gain momentum with the quarter ended June 30, 2005 showing a 40% increase over the preceding quarter. In addition, we recently commenced our definitive Phase 2B clinical trial to evaluate PT-141 in patients suffering from erectile dysfunction."
One should note that the company has spent $48 million on R&D over the last two years and the market cap for Palatin stock is only $100 million.
Mike Shedlock: "Rapidly decreasing margins on sub-prime loans in the face of rising delinquencies sure suggests evidence of increasing complacency and excessive risk taking in the mortgage loan industry."
U.S. employers are likely to increase hiring at a steady pace next quarter, but low optimism about hiring at retail and manufacturing companies could make for a bleak holiday season, according to the latest hiring outlook survey from Manpower Inc.
Two and one half years ago Fortune Magazine reported that Rumsfeld was instrumental in providing North Korea with "the design and key components of two light-weight nuclear reactors."
"Their(China's) prices are below our cost of production," said Octavio Pozo, spokesman for Mexico's National Council of Chili Producers. "We're worried." They should be worried. Look at what happened to the garlic industry in Gilroy, California. Chinese garlic was significantly cheaper and the quality did not suffer.
With nearly a billion dollars appropriated by Congress for the task last year, the United States still lacks uniform systems that can keep all emergency responders in touch.
"We're no better off than we were then," Louisiana State Sen. Robert Barham said last week.
George Bush: "We need an energy bill that encourages consumption."
China’s Hu Jintao: "What I would like to stress here is that China does not pursue a huge trade surplus with the United States and we’re willing to work with the United States to take effective measures to increase China’s imports from the United States."
As of yesterday’s close, 50% of the DJIA stocks were above their 30-dy moving average, 46+% above their 10-day moving average, and 33% above their 5-day moving average.
The IBD/TIPP Economic Optimism Index plummeted in September, dropping 9.7 points, or 19%, to reach 41.2, a new all-time low for the index. Over 50 means optimism; below 50 indicates pessimism. IBD/TIPP conducted the national poll of 909 adults from September 6 to September 11. The margin of error is +/-3.3 percentage points.
The Six-Month Economic Outlook, plunged 16.3 points, or 39%, to reach 29.0. This is 9.7 points below this component's previous all-time low reached in April of 2005.
The Personal Financial Outlook declined 12% from 57.7 to 50.8 – an all-time low for this component.
Confidence in Federal Economic Policies fell 5.6 points, or 11%, to 44.0 – another all-time low.
The nation's employers are anticipating close to a 10% increase in health-care costs in 2006, and consequently will be shifting more of that burden to their employees, according to a new Mercer Human Resource Consulting survey of more than 1,800 firms. That 10% increase would be if they leave benefits unchanged.
George Bush: "Katrina exposed serious problems in our response capability at all levels of government." With all due respect, 9/11 illustrated serious problems. During the past four years, billions have been expended on homeland security and several individual rights have perished. New Orleans proved that lack of leadership is at the forefront of our nation’s readiness problems.
Interior Secretary Gail Norton said 58 percent of Gulf oil production remains shut down, as does 38 percent of the region's natural gas production.
Peoples Energy told its customers to expect winter heating bills to be 39% higher than they were last year.
Approximately 350,000 gallons of oil spilled into the residential heart of Chalmette, La.
China's sales of luxurious products are expected to grow 20 pct annually till 2008, Xinhua news agency reported, citing a research report by Ernst & Young.
After 2008, the increase in luxurious products sales is expected to slow to about 10 pct until 2015. "By 2015, China will replace the US to become the world's second largest consumer of luxurious products," stated Kongwai Lee, a partner and industry leader of retail and consumer products of Ernst Young.
Latin America has become one of the top business partners of India in 2004-05 with the two-way trade growing by 77.66 percent to $3.5 billion, according the industry body Assocham.
Lenox Inc. plans to close 31 of its retail stores and end production of fine china at its Pomona, N.J., plant on Nov. 14, and stated the closings will result in the loss of 530 jobs, including 290 at the Pomona plant and 240 at the retail stores.
Ford President James Padilla: "We will align our capacity with demand and see how that falls.'' In other words, more plants may be on the chopping block.
The nationwide average price for self-serve regular gasoline has dropped 10.1 cents per gallon since reaching a new record high of $3.057 on Labor Day, September 5, 2005. Today's nationwide average price of $2.956 is 51.6 cents more expensive than it was one month ago and $1.115 higher than last year at this time.
Zhang Guobao, China's deputy director of the National Development and Reform Commission, stated China is expected to produce 180 million tons of crude in 2005, up from 175 million tons in 2004. In addition, last year China imported 117 million tons of crude. Zhang did not state how many tons would be imported in 2005.
Through July, the trade deficit is 18% larger than one year ago and 40% higher than 2 years ago.
What would the U.S. Federal deficit in 2005 be if the cost of the Iraq war and the cost for FEMA were included?
Palatin Technologies, Inc. announced today results for its fourth quarter and fiscal year ended June 30, 2005. Total revenues in the quarter ended June 30, 2005 were $5.8 million, compared to less than $0.1 million for the same period in 2004. Palatin reported a net loss of $5.1 million, or ($0.09) per basic and diluted share, for the quarter ended June 30, 2005, compared to a net loss of $7.0 million, or ($0.13) per basic and diluted share, for the same period in 2004. At June 30, 2005, the Company had cash, cash equivalents and investments totaling $18.1 million, compared with 20.4 million one year ago.
The decrease in the net loss for the quarter ended June 30, 2005 versus the quarter ended June 30, 2004 was primarily attributable to revenue recognized in the current period under the Company's collaboration agreement with King Pharmaceuticals, Inc. (King) related to PT-141, a drug under development to treat male and female sexual dysfunction, and product revenue from NeutroSpec(TM), approved by the FDA in July 2004 for the imaging of patients with equivocal signs and symptoms of appendicitis. These revenues offset higher development costs and other operating expenses.
For the years ended June 30, 2005 and 2004, total revenues were $18.0 million and $2.3 million, respectively. Palatin's net loss for the year ended June 30, 2005 was $14.4 million, or ($0.27) per basic and diluted share, compared to a net loss of $26.3 million, or ($0.55) per basic and diluted share, for the year ended June 30, 2004.
"We are pleased with the quarter and our progress to date," said Stephen T. Wills, chief financial officer of Palatin. "Commercial sales of NeutroSpec continue to gain momentum with the quarter ended June 30, 2005 showing a 40% increase over the preceding quarter. In addition, we recently commenced our definitive Phase 2B clinical trial to evaluate PT-141 in patients suffering from erectile dysfunction."
One should note that the company has spent $48 million on R&D over the last two years and the market cap for Palatin stock is only $100 million.
Tuesday, September 13, 2005
Stretched Thin
9/13/05 Stretched Thin
According to the AARP Bulletin, U.S. Census Bureau statistics for the year ending in 2004 show that property tax collections grew by 24 percent nationwide, while sales tax revenue grew by 12 percent—income tax collections actually shrank by a percentage point. Increased property taxes are taking a toll on the fixed income of seniors. More and more are being forced to sell the homes they have owned for decades. How would you like to have a home with no mortgage and still not be able t afford the escalating
property taxes?
Currently, four major refineries, owned by Chevron, Exxon Mobil, ConocoPhillips and Murphy Oil, are either flooded or without power, and are likely to be off line for several weeks, perhaps months. Together, these refine 880,000 barrels a day, or 5 percent of domestic capacity. "It's very significant," said Colm McDermott, an oil analyst at John S. Herold Inc. The loss is equal to 1 percent of the world's refining capacity. "It's a global market and that's certainly enough to have an impact on a global level."
The Big Picture: "I am starting to think that Economists are the new corrupt Analysts on Wall Street."
We must keep in mind that the market historically hits a significant low in the second year of a president’s second term. In other words, 2006 should not present rosy stock returns for investors. With 3 ½ months left until the start of 2006, how long do you want to wait to take some money off the table? Don’t stretch your luck too thin. A puerco does not live high on the hog forever.
Gary Lammert, The Economic Fractalist: "Just like in 1929 it will most likely be the third decay fractal of 27-28 days that will witness the profound drop that will be the equivalent of avery slow moving category 5 hurricane moving across the entire nationwithout benefit of a dissipating landfall. The civil and social chaos witnessed in New Orleans may well be a representative microcosm of thegeneral unrest that could follow."
India will receive crude oil from the Caspian Sea region in October, the first shipment from the region, as part of diversifying its sources of energy supplies. The 1,764-km Baku (Azerbaijan)-Tblisi (Georgia)-Ceyhan (turkey) pipeline would pour Caspian crude on the Mediterranean Sea port next month.
The first oil for the outside world from the Caspian region has been taken by Bharat Petroleum Corporation Ltd (BPCL), which would ship it from the Mediterranean Sea through Suez Canal to its Mumbai refinery.
Foreign companies in China are facing a future of slimmer profit margins as their number multiplies and competition gets fiercer, the American Chamber of Commerce president, Charles Martin, said "This place is getting more competitive," Martin told reporters "There's more foreign companies coming in, there's more Chinese companies getting stronger," he said A survey of member companies of the chamber suggested that about 30 pct were seeing better profits in China than in the world as a whole, down from 40 pct in previous years, he said "(China) is acting more like a normal competitive market and we would expect that to continue to happen over the coming years," he said. "You're going to get more competition, you're going to get pressure on the margins." The tougher competition is coming about not just as more foreign enterprises enter China but also as new local competitors emerge, typically in service industries such as media and law, according to Martin "They say -- we can't do the offshore investment but we can do everything else you need done here at one half the price or one third the price," he said.
EnCana Corp. said it's agreed to sell all of its Ecuador oil and pipeline interests for $1.42 billion. Andes Petroleum Co., a joint venture of Chinese oil companies, will pay Calgary-based EnCana cash under terms of the deal, which is expected to close before the end of 2005.
More than 25,000 Japanese will be aged over 100 by the end of the month, compared with just 153 four decades ago, the government said on Tuesday.
Of the 25,606 people aged over 100 -- about one in every 5,000 Japanese -- more than 80 percent of are women.
Mobile phone maker Nokia raised its third quarter sales and profit forecasts on Tuesday, saying demand was strong and average sale prices of its handsets were holding up better than expected. Nokia said it expected third quarter net sales to be in the range of 8.4-8.5 billion euros, compared to its previous guidance of 7.9-8.2 billion.
Between August 1, 2004 and September 1, 2005 our National Debt increased by $575 billion. The folks who have their head in an unpleasant place will tell you that it's of no concern because the increase is only about 5% of our GDP. Let's look at it another way. That same 5% is approximately 40+% higher than the growth rate of our GDP. Such a relationship can only lead to the breech of an economic levee.
Bernard Baruch: "Gold has worked down from Alexander's time... When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."
According to the AARP Bulletin, U.S. Census Bureau statistics for the year ending in 2004 show that property tax collections grew by 24 percent nationwide, while sales tax revenue grew by 12 percent—income tax collections actually shrank by a percentage point. Increased property taxes are taking a toll on the fixed income of seniors. More and more are being forced to sell the homes they have owned for decades. How would you like to have a home with no mortgage and still not be able t afford the escalating
property taxes?
Currently, four major refineries, owned by Chevron, Exxon Mobil, ConocoPhillips and Murphy Oil, are either flooded or without power, and are likely to be off line for several weeks, perhaps months. Together, these refine 880,000 barrels a day, or 5 percent of domestic capacity. "It's very significant," said Colm McDermott, an oil analyst at John S. Herold Inc. The loss is equal to 1 percent of the world's refining capacity. "It's a global market and that's certainly enough to have an impact on a global level."
The Big Picture: "I am starting to think that Economists are the new corrupt Analysts on Wall Street."
We must keep in mind that the market historically hits a significant low in the second year of a president’s second term. In other words, 2006 should not present rosy stock returns for investors. With 3 ½ months left until the start of 2006, how long do you want to wait to take some money off the table? Don’t stretch your luck too thin. A puerco does not live high on the hog forever.
Gary Lammert, The Economic Fractalist: "Just like in 1929 it will most likely be the third decay fractal of 27-28 days that will witness the profound drop that will be the equivalent of avery slow moving category 5 hurricane moving across the entire nationwithout benefit of a dissipating landfall. The civil and social chaos witnessed in New Orleans may well be a representative microcosm of thegeneral unrest that could follow."
India will receive crude oil from the Caspian Sea region in October, the first shipment from the region, as part of diversifying its sources of energy supplies. The 1,764-km Baku (Azerbaijan)-Tblisi (Georgia)-Ceyhan (turkey) pipeline would pour Caspian crude on the Mediterranean Sea port next month.
The first oil for the outside world from the Caspian region has been taken by Bharat Petroleum Corporation Ltd (BPCL), which would ship it from the Mediterranean Sea through Suez Canal to its Mumbai refinery.
Foreign companies in China are facing a future of slimmer profit margins as their number multiplies and competition gets fiercer, the American Chamber of Commerce president, Charles Martin, said "This place is getting more competitive," Martin told reporters "There's more foreign companies coming in, there's more Chinese companies getting stronger," he said A survey of member companies of the chamber suggested that about 30 pct were seeing better profits in China than in the world as a whole, down from 40 pct in previous years, he said "(China) is acting more like a normal competitive market and we would expect that to continue to happen over the coming years," he said. "You're going to get more competition, you're going to get pressure on the margins." The tougher competition is coming about not just as more foreign enterprises enter China but also as new local competitors emerge, typically in service industries such as media and law, according to Martin "They say -- we can't do the offshore investment but we can do everything else you need done here at one half the price or one third the price," he said.
EnCana Corp. said it's agreed to sell all of its Ecuador oil and pipeline interests for $1.42 billion. Andes Petroleum Co., a joint venture of Chinese oil companies, will pay Calgary-based EnCana cash under terms of the deal, which is expected to close before the end of 2005.
More than 25,000 Japanese will be aged over 100 by the end of the month, compared with just 153 four decades ago, the government said on Tuesday.
Of the 25,606 people aged over 100 -- about one in every 5,000 Japanese -- more than 80 percent of are women.
Mobile phone maker Nokia raised its third quarter sales and profit forecasts on Tuesday, saying demand was strong and average sale prices of its handsets were holding up better than expected. Nokia said it expected third quarter net sales to be in the range of 8.4-8.5 billion euros, compared to its previous guidance of 7.9-8.2 billion.
Between August 1, 2004 and September 1, 2005 our National Debt increased by $575 billion. The folks who have their head in an unpleasant place will tell you that it's of no concern because the increase is only about 5% of our GDP. Let's look at it another way. That same 5% is approximately 40+% higher than the growth rate of our GDP. Such a relationship can only lead to the breech of an economic levee.
Bernard Baruch: "Gold has worked down from Alexander's time... When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."
Monday, September 12, 2005
Taking Precaution
9/12/05 Taking Precaution
Have you ever considered the possibility of an exit strategy for youur portfolio? Some folks will reply that selling during times of an emergency will be selling at the bottom. A good example would be selling after 9/11. I am not suggesting that the selling be done aftera horrible event occurs. My plan requires some thinking on the part of an investor. When a situation doesn't feel right or 2+2 doesn't equal 4, then begain by taking money off the table. It doesn't mean selling 100% of an individual holding at a single time. You might begin by selling 25%. If the stock continues to rise, and it makes no sense to you, sell some more. Do not listen to the media. It's your money. A good example is the 5000 level on the Nasdaq. It's five years later and that index is still down 60%. Don't wait for an investing disaster to strike. So many people have a stock portfolio and know nothing about their holdings and take no responsibility for knowing. However, their retirement often depends on that portfolio.
Would you rather begin thinking about selling when the S&P is at a 4-year high or a 4-year low?
Since 1946, the U.S. economy has experienced a recession every 57 months and the recession has had an average duration of 11 months. The current economic expansion has lasted 46 months. In other words, to be on the safe side and prepare for the future economic storm, one should begin to prepare the portfolio
today and take the necessary steps. In sum, initiate an action plan and cut back on your weak holdings.
There is one possible economic variable that needs to be taken seriously. This country has amassed unprecedented government and household debt levels. To keep the ballgame going, the Fed has been using its printing press. Just suppose that economic storm hits in a year and inflation turns into deflation.
The fail-safe levees could easily be breeched. What happens to the equity build up in the asset-class sector of the economy? It's hard to imagine but yoyr home might drop 20-25% in value- or worse. Are
you prepared for that? Bottled water and a flashlight won't be help.
Have you ever considered the possibility of an exit strategy for youur portfolio? Some folks will reply that selling during times of an emergency will be selling at the bottom. A good example would be selling after 9/11. I am not suggesting that the selling be done aftera horrible event occurs. My plan requires some thinking on the part of an investor. When a situation doesn't feel right or 2+2 doesn't equal 4, then begain by taking money off the table. It doesn't mean selling 100% of an individual holding at a single time. You might begin by selling 25%. If the stock continues to rise, and it makes no sense to you, sell some more. Do not listen to the media. It's your money. A good example is the 5000 level on the Nasdaq. It's five years later and that index is still down 60%. Don't wait for an investing disaster to strike. So many people have a stock portfolio and know nothing about their holdings and take no responsibility for knowing. However, their retirement often depends on that portfolio.
Would you rather begin thinking about selling when the S&P is at a 4-year high or a 4-year low?
Since 1946, the U.S. economy has experienced a recession every 57 months and the recession has had an average duration of 11 months. The current economic expansion has lasted 46 months. In other words, to be on the safe side and prepare for the future economic storm, one should begin to prepare the portfolio
today and take the necessary steps. In sum, initiate an action plan and cut back on your weak holdings.
There is one possible economic variable that needs to be taken seriously. This country has amassed unprecedented government and household debt levels. To keep the ballgame going, the Fed has been using its printing press. Just suppose that economic storm hits in a year and inflation turns into deflation.
The fail-safe levees could easily be breeched. What happens to the equity build up in the asset-class sector of the economy? It's hard to imagine but yoyr home might drop 20-25% in value- or worse. Are
you prepared for that? Bottled water and a flashlight won't be help.
Sunday, September 11, 2005
September 11, 2001- September 11, 2005
Sept. 11, 2001- Sept. 11, 2005
Have you been to Ground Zero? What do you think has taken place over the last four years? Bill Doyle’s son Joseph died at the Trade Center. Bill stated “it’s astounding to me that the only thing they have up there after 4 years are a couple of posters.” To be precise, there are names of 2,749 victims on panels attached to a fence. That’s what the site has to show for itself after 4 years.
Bush remarked “and in the days and weeks that followed, America answered history’s call to bring justice to our enemies and to ensure the survival and success of liberty.” Maybe Bush needs a lesson in reality. Osama bin Laden and Abu Musab al-Zarqawi are still at large. Do you think that would be the case had Ross Perot been president?
As for ensuring the survival and success of liberty, no other president in the history of the United States has trampled on the individual constitutional rights and liberties of American citizens as has Bush. In 2001, I predicted that Bush would go down as the worst president we have ever had. The misery and blight he has brought on this nation far exceeds my worst fears.
Jon Stewart: "If the events of September 11th have proven anything, it's that the terrorists can attack us, but they can't take away what makes us American - our freedom, our liberty, our civil rights. No, only Attorney General John Ashcroft can do that.”
President George W. Bush's approval ratings have fallen across the board in the wake of Hurricane Katrina and a seemingly flawed government response to the disaster, according to the latest Newsweek Poll. Bush's job-approval rating dropped to 38 percent, the lowest
ever in the Newsweek Poll. Sixty-six percent of those polled say they are dissatisfied with the way things are going in the United States at this time; just 28 percent are satisfied, another record low in the poll.
A 52-percent majority of Americans say they do not trust President Bush to
make the right decisions during a domestic crisis, 45 percent do. The same
number-52 percent-do not trust him to make the right decisions during an
international crisis, again, 45 percent do. In addition, 57 percent of
Americans say the slow response in New Orleans has caused them to lose
confidence in the government to deal with another major natural disaster, 41
percent say it has not; 47 percent say it has made them lose confidence in
government to prevent another 9/11-type attack; half (50%) say it has not, the
poll shows.
The president's ratings on issues having little if anything to do with
domestic disasters also declined. Bush's approval on handling terrorism and
homeland security is 46 percent, a five-point drop from the August 2-4, 2005
Newsweek Poll. For the first time in the Newsweek Poll, more Americans
disapprove of Bush's handling of terrorism and homeland security (48%). And
almost half (49%) of all those polled say taking military action against Iraq
two years ago was not the right thing to do; 46 percent say it was. This is
the first time ever in the Newsweek Poll that more Americans have said going
to war was not the right thing to do than said it was.
A plurality of Americans also rates the federal government's response to
the problems caused by Hurricane Katrina as poor (40%). Thirty-two percent say
the Feds' response was "only fair;" and 21 percent believe the response has
been "good," the poll shows. State and local governments did not fare better.
35 percent say they did a poor job and 34 percent say they did a fair job.
However, views are starkly different when examined by political party.
Fifty-three percent of Democrats polled say the federal government did a poor
job vs. just 19 percent of Republicans. Thirty-seven percent of Republicans
believe the federal government did a good job and 11 percent believe it did an
excellent job. The Democrats are more forgiving of local and state
governments, though not as forgiving as the Republicans are of the Feds.
Twenty-four percent of Democrats believe the state and local governments did a
good job and four percent say an excellent job. Thirty percent of Democrats
believe the local and state governments did a poor job, vs. 43 percent of
Republicans; 35 percent of Dems and 29 percent of Republicans say they did a
fair job.
While 66 percent of all those polled say a "major reason" for the
government's slow response to the disaster was because of poor communication
between federal, state and local government officials, 57 percent say a major
reason was that the amount of destruction was unexpected and overwhelming.
Fifty-five percent believe that incompetence of federal officials whose job is
to prepare and deal with natural disasters is to blame and 57 percent believe
state and local officials incompetence is to blame.
Every day I am astounded by the level of ineptness in this administration. They might consider revamping their HR department. It is normal procedure to check on the resume of an applicant. Obviously, that did not take place with Brown of FEMA. In addition, evacuees were told they would be receiving a $2,000 debit card and then that promise is rescinded. Why? The administration maintains they don’t have sufficient staff to hand out the cards. If they were handing them out to Congress, state, local, and municipal government workers, would they have found the means to hand out the cards? So they will mail checks to people who don’t have a home, a permanent mailing address, and don’t have access to a checking account.
Ross Perot: "If someone is blessed as I am is not willing to clean out the barn, who will?"
September 11, 2001 was avoidable. The Iraq war was avoidable. The levees breaking in New Orleans – that too was avoidable. Electing George Bush twice was avoidable. I hope Reverend Parsley is pleased with himself.
Kurt Vonnegut, Jr.: "True terror is to wake up one morning and discover that your high school class is running the country."
Have you been to Ground Zero? What do you think has taken place over the last four years? Bill Doyle’s son Joseph died at the Trade Center. Bill stated “it’s astounding to me that the only thing they have up there after 4 years are a couple of posters.” To be precise, there are names of 2,749 victims on panels attached to a fence. That’s what the site has to show for itself after 4 years.
Bush remarked “and in the days and weeks that followed, America answered history’s call to bring justice to our enemies and to ensure the survival and success of liberty.” Maybe Bush needs a lesson in reality. Osama bin Laden and Abu Musab al-Zarqawi are still at large. Do you think that would be the case had Ross Perot been president?
As for ensuring the survival and success of liberty, no other president in the history of the United States has trampled on the individual constitutional rights and liberties of American citizens as has Bush. In 2001, I predicted that Bush would go down as the worst president we have ever had. The misery and blight he has brought on this nation far exceeds my worst fears.
Jon Stewart: "If the events of September 11th have proven anything, it's that the terrorists can attack us, but they can't take away what makes us American - our freedom, our liberty, our civil rights. No, only Attorney General John Ashcroft can do that.”
President George W. Bush's approval ratings have fallen across the board in the wake of Hurricane Katrina and a seemingly flawed government response to the disaster, according to the latest Newsweek Poll. Bush's job-approval rating dropped to 38 percent, the lowest
ever in the Newsweek Poll. Sixty-six percent of those polled say they are dissatisfied with the way things are going in the United States at this time; just 28 percent are satisfied, another record low in the poll.
A 52-percent majority of Americans say they do not trust President Bush to
make the right decisions during a domestic crisis, 45 percent do. The same
number-52 percent-do not trust him to make the right decisions during an
international crisis, again, 45 percent do. In addition, 57 percent of
Americans say the slow response in New Orleans has caused them to lose
confidence in the government to deal with another major natural disaster, 41
percent say it has not; 47 percent say it has made them lose confidence in
government to prevent another 9/11-type attack; half (50%) say it has not, the
poll shows.
The president's ratings on issues having little if anything to do with
domestic disasters also declined. Bush's approval on handling terrorism and
homeland security is 46 percent, a five-point drop from the August 2-4, 2005
Newsweek Poll. For the first time in the Newsweek Poll, more Americans
disapprove of Bush's handling of terrorism and homeland security (48%). And
almost half (49%) of all those polled say taking military action against Iraq
two years ago was not the right thing to do; 46 percent say it was. This is
the first time ever in the Newsweek Poll that more Americans have said going
to war was not the right thing to do than said it was.
A plurality of Americans also rates the federal government's response to
the problems caused by Hurricane Katrina as poor (40%). Thirty-two percent say
the Feds' response was "only fair;" and 21 percent believe the response has
been "good," the poll shows. State and local governments did not fare better.
35 percent say they did a poor job and 34 percent say they did a fair job.
However, views are starkly different when examined by political party.
Fifty-three percent of Democrats polled say the federal government did a poor
job vs. just 19 percent of Republicans. Thirty-seven percent of Republicans
believe the federal government did a good job and 11 percent believe it did an
excellent job. The Democrats are more forgiving of local and state
governments, though not as forgiving as the Republicans are of the Feds.
Twenty-four percent of Democrats believe the state and local governments did a
good job and four percent say an excellent job. Thirty percent of Democrats
believe the local and state governments did a poor job, vs. 43 percent of
Republicans; 35 percent of Dems and 29 percent of Republicans say they did a
fair job.
While 66 percent of all those polled say a "major reason" for the
government's slow response to the disaster was because of poor communication
between federal, state and local government officials, 57 percent say a major
reason was that the amount of destruction was unexpected and overwhelming.
Fifty-five percent believe that incompetence of federal officials whose job is
to prepare and deal with natural disasters is to blame and 57 percent believe
state and local officials incompetence is to blame.
Every day I am astounded by the level of ineptness in this administration. They might consider revamping their HR department. It is normal procedure to check on the resume of an applicant. Obviously, that did not take place with Brown of FEMA. In addition, evacuees were told they would be receiving a $2,000 debit card and then that promise is rescinded. Why? The administration maintains they don’t have sufficient staff to hand out the cards. If they were handing them out to Congress, state, local, and municipal government workers, would they have found the means to hand out the cards? So they will mail checks to people who don’t have a home, a permanent mailing address, and don’t have access to a checking account.
Ross Perot: "If someone is blessed as I am is not willing to clean out the barn, who will?"
September 11, 2001 was avoidable. The Iraq war was avoidable. The levees breaking in New Orleans – that too was avoidable. Electing George Bush twice was avoidable. I hope Reverend Parsley is pleased with himself.
Kurt Vonnegut, Jr.: "True terror is to wake up one morning and discover that your high school class is running the country."
Friday, September 09, 2005
Toxic Negates Toxic
9/10/05 Toxic Negates Toxic
Wayne Krautkramer: "Congressmen and regulators are just wannabe shamans by another name. Don't let their secular disguise deceive you! It wasn't long ago that your leaders were wearing loincloths, strange headdresses, had bones in their noses, and were dripping blood from their teeth! Today, we have better looking shamans, compliments of Max Factor, Vidal Sassoon, Clairol, and cosmetic surgery. For further proof, see Michael Jackson."
U.S. Commerce Secretary Carlos Gutierrez today announced a formal determination of a fishery failure in theGulf of Mexico due to the devastation following Hurricane Katrina. Theaffected area includes the Florida Keys and from Pensacola, Fla., to the Texas border. The determination came in response to a virtual fishery shutdown in the affected states due to major flooding, damage to fishing boats and fishing ports, waterways clogged with debris and closed processing facilities.
Wayne Krautkramer: "Congressmen and regulators are just wannabe shamans by another name. Don't let their secular disguise deceive you! It wasn't long ago that your leaders were wearing loincloths, strange headdresses, had bones in their noses, and were dripping blood from their teeth! Today, we have better looking shamans, compliments of Max Factor, Vidal Sassoon, Clairol, and cosmetic surgery. For further proof, see Michael Jackson."
U.S. Commerce Secretary Carlos Gutierrez today announced a formal determination of a fishery failure in theGulf of Mexico due to the devastation following Hurricane Katrina. Theaffected area includes the Florida Keys and from Pensacola, Fla., to the Texas border. The determination came in response to a virtual fishery shutdown in the affected states due to major flooding, damage to fishing boats and fishing ports, waterways clogged with debris and closed processing facilities.
"We are taking action now because of the significant economic effects of
Hurricane Katrina on fishing communities in the Gulf of Mexico," Secretary
Gutierrez said. "Major commercial fisheries in the Gulf of Mexico include
finfish, shrimp and oysters, with an estimated value of almost $700 million
per year." Although the extent of the damage to Gulf fishing industries is not yet
known, fishing in the region has been essentially halted. NOAA will work with
the states to assess damage to the 15 major fishing ports and the 177 seafood
processing facilities in Alabama, Mississippi and Louisiana. Based on
preliminary estimates, there are 432 federally permitted fishing vessels in
Alabama; 3,738 in Florida; 1,033 in Louisiana, and 351 in Mississippi.
Additional fishermen hold state permits.
It is anticipated that the only sign of life in these toxic waters will be
government employees. Toxic negates toxic.
Mark Twain: "It could probably be shown by facts and figures that there is no
distinctly native American criminal class except Congress."
The RBC CASH Index, based on polling by Ipsos, showed that consumer
confidence sank to 61.5 in September, the lowest since early March
2003, when confidence dropped to 61.4 as a nervous country hunkered
down for the start of the Iraq war.
September's decline -- the third straight month that confidence fell --
followed a reading of 72.6 in August. The latest showing also
underscored just how much consumers' confidence has deteriorated
compared with a year ago. In September 2004, consumer confidence was a
robust 103.4.
Richard Benson: "China is printing money at an
annual rate of 16 percent; Denmark is 15+ percent; Australia, Britain, and
Canada are over 10 percent and broad money growth in Europe is 8%. While the
broad measure of money growth in the United States is only 5 percent, growth
of total credit is double digit!"
Import prices continued a steady upward trend in August, increasing 1.3
percent following advances of 1.2 percent and 0.8 percent in June and July,
respectively. The August increase was the largest monthly gain since a 2.2
percent increase in March, and import prices rose 7.6 percent over the past
year. Following the pattern of the prior two months, the August increase was
driven by higher petroleum prices, which rose 7.1 percent. August marked the
third consecutive month that the price index for petroleum imports recorded
its highest level since the index was first published in 1982. Petroleum
prices rose 42.5 percent over the past 12 months. Nonpetroleum prices were
unchanged in August after decreasing 0.2 percent in each of the three
preceding months. Despite those recent declines, nonpetroleum prices
increased 1.8 percent for the year ended in August.
It is 112 days until 2006 begins. In other words, the AMT is just around the corner
for 14 million Americans. What a cancer!
I am fully supportive of private philanthropy, and my annual giving reflects that
belief. At the same time, I am totally against the Federal government taking money
from the pockets of the citizens and giving that money as a chartitable gift, such as, the
the $2,000 debit card or the $1 million gift to the families impacted by 9/11.
The Constitution covered this matter quite adequately and James Madison stated
"I cannot undertake to lay my finger on that article of the Constitution which granted a right
to Congress of expending, on objects of benevolence, the money of their
constituents."
I strongly suggest Bush, his Administration, the Congress, State, City,
and Municipal workers take a refresher course on the meaning of liberty
and property rights. It would serve them all well to fully comprehend
and follow the words of John Stuart Mill: "The only purpose for which
power can be rightfully exercised over any member of a civilized community
against his will is to prevent harm to others. His own good, either physical
or moral, is not a sufficient warrant. He cannot rightfully be compelled
to do or to forebear because it will be better for him to do so, because it
will make him happier, because in the opinions of others to do would be wise
or even right. There are good reasons for remonstrating with him, or
reasoning with him, or pursuading him, or entreating him, buy not for compelling
him, or visiting him with any evil in case he do otherwise." In sum, the people in
New Orleans and the environs cannot be compelled to leave their homes. Understanding
and appreciating the rights of a citizen as delineated under our Constitution is
an absolute requisite for public office. The voters had better take their rights
more seriously. Otherwise, our democracy is doomed.
7-Eleven, Inc. announced on Friday that the special committee of its board of directors has
retained Greenhill & Co., LLC as its financial advisor and Weil, Gotshal &
Manges, LLP as its legal advisor to assist the special committee with its
evaluation of the unsolicited tender offer commenced by Seven-Eleven Japan
Co., Ltd. As announced last week, the special committee comprised solely of
independent directors of 7-Eleven is analyzing the unsolicited tender offer by
Seven-Eleven Japan Co., Ltd. of $32.50 per share in cash for all of the
outstanding shares of 7-Eleven's common stock that it does not currently own.
7-Eleven, Inc., headquartered in Dallas, Texas, operates or franchises approximately 5,800 7-Eleven(R) stores in the United States and
Canada and licenses approximately 22,700 7-Eleven stores in 17 countries and
U.S. territories throughout the world. During 2004, 7-Eleven stores worldwide
generated total sales of approximately $41 billion. SE is trading at an all-time high
of $35+.
Kazakhstan has the oil resources to
help stabilize world oil prices, but needs increased investment to bring
transport capacity up to production capacity, the nation's minister of energy
said today at U.S.-Kazakh business conference here.
"We have invested billions of dollars over the years to develop and
upgrade our pipeline and transport system," said Minister of Energy Vladimir
Shkolnik. "Still, we need to improve our ability to move more oil from the
Caspian Sea to world markets, and that requires greater investment in this
infrastructure."
Shkolnik then cited Kazakhstan's oil production outlook as follows:
-- In 2005, the country expects to produce 1.3 million barrels of oil a
day and 28.7 billion cubic meters of natural gas per year.
-- By 2010, those figures are expected to climb to 1.8 million barrels a
day and 52.5 billion cubic meters of natural gas per year.
-- By 2015, the Central Asian nation could produce 3 million barrels of
oil a day and 79.4 billion cubic meters of natural gas per year, which
could make Kazakhstan the world's fifth largest oil producer.
I trust ONGC/Mittal are familiar with these projections. I continue to believe
PKZ is undervalued at $54. It won't take long to see whether I am correct.
The Internal Revenue Service, citing rising gasoline prices, said Friday it would boost by nearly 20 percent the mileage reimbursement limit for taxpayers who use their cars for work IRS Commissioner Mark Everson said the agency would raise the limit to 48.5 cents a mile from the current 40.5 cents, the biggest increase ever and more than double last year's 3 cent rise. The adjustment was effective Sept. 1 and will expire Dec. 31.
Allen Wallenwein: "Either Greenspan or his successor have exactly two choices: Keep on hiking and drag the Dow back into the valley of death (with the dollar and the entire US economy soon to follow) - or stop hiking and make the dollar lose its footing completely."
Two days ago local police officers began confiscating weapons from civilians in New Orleans. Quite clearly,
this action is in violation of the 2nd Amendment of the Constitution. I have never owned a weapon and I have no plans to so. At the same time, Americans have the right to bear arms. As Thomas Jefferson stated, "no free man shall ever be debarred the use of arms." Speaking personally, I don't believe in impeachment. I think it's too much of a milk-toast punishment. Rather, for every government employee who blatantly violates the constitutional rights of Americans, I support life imprisonment. Throw away the key. There are others, such as, U.S. Rep. John
Conyers who favor impeachment.
The S&P had its highest weekly close in over 4 years.
HP is seeking to cut 6,000 jobs in Europe.
Gold closed nicely at $453 an ounce.
Speaking of Hewlett Packard, it's market cap is up to $80 billion and Dell's is slightly above at $83 billion. That's close enough to even for me. I believe this represents an uncommon value and an opportunity. I would suggest you consider going long Dell and shorting Hewlett Packard on a 1 for 1 basis.
What a difference a week can make. On September 2, Albertson's announced it was seeking alternatives, and that included a possible sale of the company. At the opening for trading, the stock rose about 6 points to $26.40 and then declined during the rest of the day and closed at $23.05. The volume was about 56.5 million shares or
almost 15% of the outstanding shares. Yesterday was a very different picture. On Thursday evening the stock had closed at $23.05. On Friday morning, the stock opened at $24, the low for the day, and traded up to $25.10 and closed at $25.01 in after market trading. The volume was 47 million shares. In other words, there was very little down volume. It's possible that Friday's trading was due to an article in The Deal.com that mentioned several large financial buyers were interested in Albertson's. In fact, every single suggested buyer was on a list of usual suspects. More importantly, the article simply confirmed the company is for sale to the highest bidder. Some folks need hand holding. That's typical of those who don't think for themselves--- like 95%+ of
investors. Understanding Albertson's is not too difficult. It has an important franchise, and there is significant
untapped value in this franchise. When money is lying on the floor, someone will pick it up. You can be sure of that.
Ralph W. Sockman: "The hope of free man in a frightened world is the values which man puts ahead of
inventions when his back is to the wall. These values are beauty, truth, goodness, and having a faith, all
of which are bombproof."
As The Water Recedes
9/9/05 As The Water Recedes
The stench worsens. The dead bodies come into view. Cameras turn away. Bush has declared September 16 a day of mourning. Tears will not wash away the guilt. This level of devastation was avoidable. Riverboat gambling provides games of chance. New Orleans crapped out. As Dan Gilligan the Petroleum Marketing Association head noted, “if the Gulf is the heart of the oil industry, we’ve suffered a heart attack.” As toxic waste pours into the water supply, the Mississippi River and its tributaries will be adversely impacted for years. Disease will be on the rise. Waterfowl will slowly cease to exist. The fishing industry will disappear. Barges will not be able to transport commodities for months. The breached levees saw to that. Life is a great deal more than a $2,000 debit card. Printing money is not an economic levee. Building debt on top of collapsing cash flow is a precursor to an economic freefall. If you look out your window, storm clouds appear in view. Don’t take my word for it. Try and make ends meet without taking on more debt. That’s the litmus test. The U.S. Treasury has failed that test for four plus years. There is no end in sight.
"Foreclosure inventory has been steadily increasing since May, representing a slowdown in the purchase of foreclosed homes," said Brad Geisen, president and CEO of Foreclosure.com.
Barry Ritholtz, The Big Picture: “Despite what some of the more bullish pundits have been saying, the stimulus of rebuilding New Orleans will not outweigh the overall loss to the economy; if it did, we would level a different city each year and rebuild it from the ground up, shiny and new. But it doesn’t, and so we don’t.”
This is the latest Katrina damage report for Wal-Mart:
* Of the 126 facilities that were originally shut down, 15 stores and
clubs remain closed.
* A total of 89 facilities have reported damage. Nine have major
damage, 41 moderate, and 39 minor damage or loss of merchandise.
Gasoline prices have increased 132% since last year. Natural gas prices
have increased 124%. On a single day - Monday, August 29th, as Hurricane
Katrina came ashore - natural gas prices rose 20%. To put that in
perspective, it would be as if the Dow Jones Industrial Average increased - or
decreased - 2000 points in a single morning!
Meanwhile, the EIA stated that, this winter, petroleum will cost 34% more than 1 year ago, natural gas will be 52% more expensive, and electricity will cost 11% more than in 2004.
Hot Water Music: "No matter who we are, where we're going, or where we've been, we all struggle. everyone has battles. everyone, at one time or another, faces the every moment, to day, to year, trials of existence. such is life.sometimes simple. sometimes complicated. when we wake up with challenges, we wake up with choices. to either overcome all that holds us down by going against what opposes us - or to continue sitting quietly in the foul stench of our own shit, while at the same time surendering ourselves to dear and failure. life shifts, spins, and relocates. as we do. we all have the ability to switch our fear of failure into an energy to overcome any trial. just as sure as we all have a spine."
Biogen Idec will cut 17% of their workforce.
Northwest Airlines Corp. wants to lay off roughly two-thirds of its mechanics and is seeking concessions worth $203 million under its latest proposal to the striking mechanics union, a union local president said Thursday.
On September 2, the U.S. Department of Homeland Security Customs and Border Protection blocked Grant Cameron from entering the U.S. It occurred at the Vancouver, BC International Airport. Grant Cameron is a Canadian UFO researcher who was scheduled to speak at the NUFOC Conference in Hollywood.
The proportion of California households able to afford a median-priced home fell to 16% in July from 19% a year earlier as prices remained sky-high, according to a report released Thursday. The percentage has been under 20% for the last year and is approaching a record low 14% set in the summer of 1989, according to the California Assn. of Realtors.
Gasoline inventories fell to 190.1 million barrels as of Friday, down 8.6 percent from the period a year earlier. The U.S has inventories that could last 20.4 days given normal demand and no additional production."That's the lowest in five years," said Fadel Gheit, an energy analyst at Oppenheimer & Company.
Continental Airlines expects to post a "significant" loss for the year, citing record high fuel prices, according to a regulatory filing on Friday. It expects to end the year with a cash balance of about $1.5 billion.
According to the US Minerals Management Service (MMS) Thursday survey, the volume of oil not flowing out of federal offshore waters in the Gulf rose to 901,726 barrels per day, or about 41,000 b/d more than was reported shut in on Wednesday.
In the aftermath of Katrina, it has been reported that the cost of shipping crude and products to the U.S. has gone up by about 30% in the past week
Mexican researchers have found that a diet rich in soy protein may alleviate fatty liver, a disease which often accompanies diabetes, according to a study published in the recent issue of the Journal of Lipid Research.
Over the years, I have written frequently about the aging of the population in the U.S., Japan, and China. In my view, it is the most significant trend going forward. At the same time, I believe research on anti-aging will become one of the long-term focuses for the pharmaceutical industry. Increased money will be spent on undertanding sirtuins, which are crucial to extending life(anti-aging), as well as a small set of genes that have the ability to control life span through caloric restriction. It should be noted that sirtuins enhance cell survival during times of stress-- especially if that stress is lack of food. As previously mentioned, Palatin has identified several molecules that are now in preclinical development as potential treatments for obesity, cachexia, and conjestive heart failure. They are: MC 3/4R agonists as a treatment for obesity and cachexia; NPR agonists as a treatment for conjestive heart failure. The company will report fourth quarter and fiscal year 2005 financial results on 9/14.
Emiliano Zapata: "It is better to die on your feet than to live on your knees."
The stench worsens. The dead bodies come into view. Cameras turn away. Bush has declared September 16 a day of mourning. Tears will not wash away the guilt. This level of devastation was avoidable. Riverboat gambling provides games of chance. New Orleans crapped out. As Dan Gilligan the Petroleum Marketing Association head noted, “if the Gulf is the heart of the oil industry, we’ve suffered a heart attack.” As toxic waste pours into the water supply, the Mississippi River and its tributaries will be adversely impacted for years. Disease will be on the rise. Waterfowl will slowly cease to exist. The fishing industry will disappear. Barges will not be able to transport commodities for months. The breached levees saw to that. Life is a great deal more than a $2,000 debit card. Printing money is not an economic levee. Building debt on top of collapsing cash flow is a precursor to an economic freefall. If you look out your window, storm clouds appear in view. Don’t take my word for it. Try and make ends meet without taking on more debt. That’s the litmus test. The U.S. Treasury has failed that test for four plus years. There is no end in sight.
"Foreclosure inventory has been steadily increasing since May, representing a slowdown in the purchase of foreclosed homes," said Brad Geisen, president and CEO of Foreclosure.com.
Barry Ritholtz, The Big Picture: “Despite what some of the more bullish pundits have been saying, the stimulus of rebuilding New Orleans will not outweigh the overall loss to the economy; if it did, we would level a different city each year and rebuild it from the ground up, shiny and new. But it doesn’t, and so we don’t.”
This is the latest Katrina damage report for Wal-Mart:
* Of the 126 facilities that were originally shut down, 15 stores and
clubs remain closed.
* A total of 89 facilities have reported damage. Nine have major
damage, 41 moderate, and 39 minor damage or loss of merchandise.
Gasoline prices have increased 132% since last year. Natural gas prices
have increased 124%. On a single day - Monday, August 29th, as Hurricane
Katrina came ashore - natural gas prices rose 20%. To put that in
perspective, it would be as if the Dow Jones Industrial Average increased - or
decreased - 2000 points in a single morning!
Meanwhile, the EIA stated that, this winter, petroleum will cost 34% more than 1 year ago, natural gas will be 52% more expensive, and electricity will cost 11% more than in 2004.
Hot Water Music: "No matter who we are, where we're going, or where we've been, we all struggle. everyone has battles. everyone, at one time or another, faces the every moment, to day, to year, trials of existence. such is life.sometimes simple. sometimes complicated. when we wake up with challenges, we wake up with choices. to either overcome all that holds us down by going against what opposes us - or to continue sitting quietly in the foul stench of our own shit, while at the same time surendering ourselves to dear and failure. life shifts, spins, and relocates. as we do. we all have the ability to switch our fear of failure into an energy to overcome any trial. just as sure as we all have a spine."
Biogen Idec will cut 17% of their workforce.
Northwest Airlines Corp. wants to lay off roughly two-thirds of its mechanics and is seeking concessions worth $203 million under its latest proposal to the striking mechanics union, a union local president said Thursday.
On September 2, the U.S. Department of Homeland Security Customs and Border Protection blocked Grant Cameron from entering the U.S. It occurred at the Vancouver, BC International Airport. Grant Cameron is a Canadian UFO researcher who was scheduled to speak at the NUFOC Conference in Hollywood.
The proportion of California households able to afford a median-priced home fell to 16% in July from 19% a year earlier as prices remained sky-high, according to a report released Thursday. The percentage has been under 20% for the last year and is approaching a record low 14% set in the summer of 1989, according to the California Assn. of Realtors.
Gasoline inventories fell to 190.1 million barrels as of Friday, down 8.6 percent from the period a year earlier. The U.S has inventories that could last 20.4 days given normal demand and no additional production."That's the lowest in five years," said Fadel Gheit, an energy analyst at Oppenheimer & Company.
Continental Airlines expects to post a "significant" loss for the year, citing record high fuel prices, according to a regulatory filing on Friday. It expects to end the year with a cash balance of about $1.5 billion.
According to the US Minerals Management Service (MMS) Thursday survey, the volume of oil not flowing out of federal offshore waters in the Gulf rose to 901,726 barrels per day, or about 41,000 b/d more than was reported shut in on Wednesday.
In the aftermath of Katrina, it has been reported that the cost of shipping crude and products to the U.S. has gone up by about 30% in the past week
Mexican researchers have found that a diet rich in soy protein may alleviate fatty liver, a disease which often accompanies diabetes, according to a study published in the recent issue of the Journal of Lipid Research.
Over the years, I have written frequently about the aging of the population in the U.S., Japan, and China. In my view, it is the most significant trend going forward. At the same time, I believe research on anti-aging will become one of the long-term focuses for the pharmaceutical industry. Increased money will be spent on undertanding sirtuins, which are crucial to extending life(anti-aging), as well as a small set of genes that have the ability to control life span through caloric restriction. It should be noted that sirtuins enhance cell survival during times of stress-- especially if that stress is lack of food. As previously mentioned, Palatin has identified several molecules that are now in preclinical development as potential treatments for obesity, cachexia, and conjestive heart failure. They are: MC 3/4R agonists as a treatment for obesity and cachexia; NPR agonists as a treatment for conjestive heart failure. The company will report fourth quarter and fiscal year 2005 financial results on 9/14.
Emiliano Zapata: "It is better to die on your feet than to live on your knees."
| | |
Thursday, September 08, 2005
The Need To Reinvent
9/8/05 The Need To Reinvent
In Louisiana itself, while the Port of New Orleans is operational, the Port of South Louisiana which runs from St. Charles Parish to Baton Rouge on the Mississippi River, is damaged. That impacts the inflow and outflow of goods. While most of the press focuses on refineries and the price of gasoline, silt, as a result of the breached levees, has clogged the mouth of the Mississippi River. This is a major problem. Engineers are attempting to determine how long it will take to make the river navigable for barges.
With one million barrels of crude off-line, the price of crude is trading around $65 a barrel.
EBay is reportedly in negotiations to buy Skype.
The Asian Development Bank predicts 9.2% economic growth for China and 6.9% for India in 2005.
Mervyn’s will close 62 stores and layoff 4,800 workers. That’s a possible scenario for Albertson’s should it be sold to a financial buyer.
Delta Airlines is cutting another 1,000 positions. Soon there won’t be anyone to fly the planes.
Remember when Toys R Us was sold? Supposedly, Deutche Bank valued the real estate on their 898 stores at $3.7 billion.
The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the second quarter of 2005. The seasonally adjusted annual
rates of productivity change in the second quarter were:
0.7 percent in the business sector and
1.8 percent in the nonfarm business sector.
In both sectors, increases in productivity were smaller than reported on
Aug. 9, as output was revised down and hours were revised up.
In manufacturing, the revised productivity changes in the second quarter
were:
3.6 percent in manufacturing,
3.3 percent in durable goods manufacturing, and
4.4 percent in nondurable goods manufacturing.
In total manufacturing, the change in productivity was revised down from
a preliminary estimate of 4.1 percent. Output and hours in manufacturing,
which includes about 13 percent of U.S. business-sector employment, tend to
vary more from quarter to quarter than data for the aggregate business and
nonfarm business sectors.
Unit labor costs increased 2.5 percent in the second quarter of 2005,
somewhat more than the 2.2-percent increase posted in the first quarter of
the year. The implicit price deflator for nonfarm business output rose 2.4
percent in the second quarter of 2005 and 3.0 percent one quarter earlier.
I would like to take a moment and return to the situation at Albertson’s. In the announcement yesterday, the company stated it was “articulating its new core/non-core asset groups without divulging the specific assets.” How can I put this delicately? That statement is a hand job. Long before the company stated it was “exploring our strategic alternatives including a possible sale of the company” it had posted on its web site real estate for sale. Because of that listing, it made me think the company was readying itself for sale. A company doesn’t need to hire two prominent investment banking firms, Goldman Sachs and Blackstone Group, to sell real estate. As for aggressively running the company prior to its sale, Albertson’s needs to be reinvented. Who shops at Albertson’s? Women. Are they going to be attracted to buying office products at a supermarket? I can just see a woman jumping up and down at home delighting in a writing pad or a folder. How about a kiosk with jewelry? Cosco makes a bundle selling jewelry. How about a kiosk with cosmetics or perfume? A supermarket doesn’t need 25,000 SKUs or whatever the number is. There are too many choices. Offer what sells. A supermarket chain is not going to compete effectively with Wal-Mart on price. There needs to be a reason to shop at Albertson’s or Kroger or Safeway. On occasion there is strong customer loyalty, such as, at Wegman’s, but that is the exception.
Today we saw Mervyn’s close 62 stores, and that will unlock value for the recent buyer of that company. The same will happen at Albertson’s. The company will not, in my view, “emerge as a smaller but more profitable and growing entity” and remain independent at the same time. That’s for bedtime stories.
Bill Gates stated that Microsoft has been “f****d” by the Chinese government.
It has been suggested that the Kazakh government will approve CNPC’s purchase of PetroKazakhstan between September 14 and September 17. After that approval has been received, it would be a strategically perfect time for ONGC/Mittal to top China’s $55 per share offer.
China National Offshore Oil Corp., the country's largest offshore oil producer, said it will join with China National Petroleum Corp. to explore for oil and gas in the northern Caspian Sea.
In Louisiana itself, while the Port of New Orleans is operational, the Port of South Louisiana which runs from St. Charles Parish to Baton Rouge on the Mississippi River, is damaged. That impacts the inflow and outflow of goods. While most of the press focuses on refineries and the price of gasoline, silt, as a result of the breached levees, has clogged the mouth of the Mississippi River. This is a major problem. Engineers are attempting to determine how long it will take to make the river navigable for barges.
With one million barrels of crude off-line, the price of crude is trading around $65 a barrel.
EBay is reportedly in negotiations to buy Skype.
The Asian Development Bank predicts 9.2% economic growth for China and 6.9% for India in 2005.
Mervyn’s will close 62 stores and layoff 4,800 workers. That’s a possible scenario for Albertson’s should it be sold to a financial buyer.
Delta Airlines is cutting another 1,000 positions. Soon there won’t be anyone to fly the planes.
Remember when Toys R Us was sold? Supposedly, Deutche Bank valued the real estate on their 898 stores at $3.7 billion.
The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the second quarter of 2005. The seasonally adjusted annual
rates of productivity change in the second quarter were:
0.7 percent in the business sector and
1.8 percent in the nonfarm business sector.
In both sectors, increases in productivity were smaller than reported on
Aug. 9, as output was revised down and hours were revised up.
In manufacturing, the revised productivity changes in the second quarter
were:
3.6 percent in manufacturing,
3.3 percent in durable goods manufacturing, and
4.4 percent in nondurable goods manufacturing.
In total manufacturing, the change in productivity was revised down from
a preliminary estimate of 4.1 percent. Output and hours in manufacturing,
which includes about 13 percent of U.S. business-sector employment, tend to
vary more from quarter to quarter than data for the aggregate business and
nonfarm business sectors.
Unit labor costs increased 2.5 percent in the second quarter of 2005,
somewhat more than the 2.2-percent increase posted in the first quarter of
the year. The implicit price deflator for nonfarm business output rose 2.4
percent in the second quarter of 2005 and 3.0 percent one quarter earlier.
I would like to take a moment and return to the situation at Albertson’s. In the announcement yesterday, the company stated it was “articulating its new core/non-core asset groups without divulging the specific assets.” How can I put this delicately? That statement is a hand job. Long before the company stated it was “exploring our strategic alternatives including a possible sale of the company” it had posted on its web site real estate for sale. Because of that listing, it made me think the company was readying itself for sale. A company doesn’t need to hire two prominent investment banking firms, Goldman Sachs and Blackstone Group, to sell real estate. As for aggressively running the company prior to its sale, Albertson’s needs to be reinvented. Who shops at Albertson’s? Women. Are they going to be attracted to buying office products at a supermarket? I can just see a woman jumping up and down at home delighting in a writing pad or a folder. How about a kiosk with jewelry? Cosco makes a bundle selling jewelry. How about a kiosk with cosmetics or perfume? A supermarket doesn’t need 25,000 SKUs or whatever the number is. There are too many choices. Offer what sells. A supermarket chain is not going to compete effectively with Wal-Mart on price. There needs to be a reason to shop at Albertson’s or Kroger or Safeway. On occasion there is strong customer loyalty, such as, at Wegman’s, but that is the exception.
Today we saw Mervyn’s close 62 stores, and that will unlock value for the recent buyer of that company. The same will happen at Albertson’s. The company will not, in my view, “emerge as a smaller but more profitable and growing entity” and remain independent at the same time. That’s for bedtime stories.
Bill Gates stated that Microsoft has been “f****d” by the Chinese government.
It has been suggested that the Kazakh government will approve CNPC’s purchase of PetroKazakhstan between September 14 and September 17. After that approval has been received, it would be a strategically perfect time for ONGC/Mittal to top China’s $55 per share offer.
China National Offshore Oil Corp., the country's largest offshore oil producer, said it will join with China National Petroleum Corp. to explore for oil and gas in the northern Caspian Sea.
Wednesday, September 07, 2005
Living According To Borrower's Time; Albertson's
9/7/05 Living According To Borrower’s Time And Albertson's
Stephen Church: “Prior to 1993, the sources of household cash flow were split about 55% from income and 45% from new debt. Beginning in 1993, new debt increasingly became the source of cash flow. In 2005, new debt of about 12% of GDP should provide nearly 86% of household cash flow…Until 1992, households usually generated over 50% of new cash flow from “operating” activities. Beginning in 1993, New Debt surpassed “operating” cash flow as the source of new cash. In 2005, new debt is expected to provide 86% of new household cash. In 1992, “operating” cash flow provided enough money to cover repayments of debt and new residential investment with $82 billion left for other investing. In 2004, “operating” cash flow left households about $800 billion short of the cash needed to cover repayments of debt and new residential construction. In 2005, “operating” cash flow should provide $1.0 trillion less than debt repayment and residential construction needs…Our analysis of the Statement of Cash Flows shows that U.S. households require access to new cash sources in excess of 13% of GDP in order to maintain a strong economy. Since current operating cash flow generates only 2% of GDP, households depend on minimum debt financing needs of about 11% of GDP.”
Bernie Schaeffer: “Never confuse a market that is structurally supported by complacent derivatives players and by abnormally high liquidity that is threatened by a tightening Fed and an inverting yield curve with a market that is invulnerable to external shocks.”
Paul Kasriel: “The negative supply-side shock to economic growth emanating from the destruction caused by Hurricane Katrina is bad news for an U.S. housing market bubble. To the degree that personal income growth is constrained nationwide, already debt-burdened households will find it more difficult to make their monthly mortgage payments and purchase necessities, much less luxuries. This could set in motion a slow-motion rise in mortgage defaults.”
George Friedman: “Rather, it was geography -- the extraordinary system of rivers that flowed through the Midwest and allowed them to ship their surplus to the rest of the world. All of the rivers flowed into one -- the Mississippi -- and the Mississippi flowed to the ports in and around one city: New Orleans. It was in New Orleans that the barges from upstream were unloaded and their cargoes stored, sold and reloaded on ocean-going vessels. Until last Sunday, New Orleans was, in many ways, the pivot of the American economy.
The ports of South Louisiana and New Orleans, which run north and south of the city, are as important today as at any point during the history of the republic. On its own merit, the Port of South Louisiana is the largest port in the United States by tonnage and the fifth-largest in the world. It exports more than 52 million tons a year, of which more than half are agricultural products -- corn, soybeans and so on. A larger proportion of U.S. agriculture flows out of the port. Almost as much cargo, nearly 57 million tons, comes in through the port -- including not only crude oil, but chemicals and fertilizers, coal, concrete and so on.
A simple way to think about the New Orleans port complex is that it is where the bulk commodities of agriculture go out to the world and the bulk commodities of industrialism come in. ... . If these facilities are gone, more than the price of goods shifts: The very physical structure of the global economy would have to be reshaped. Consider the impact to the U.S. auto industry if steel doesn't come up the river, or the effect on global food supplies if U.S. corn and soybeans don't get to the markets.
The problem is that there are no good shipping alternatives. River transport is cheap, and most of the commodities we are discussing have low value-to-weight ratios. The U.S. transport system was built on the assumption that these commodities would travel to and from New Orleans by barge, where they would be loaded on ships or offloaded. Apart from port capacity elsewhere in the United States, there aren't enough trucks or rail cars to handle the long-distance hauling of these enormous quantities -- assuming for the moment that the economics could be managed, which they can't be.”
"I don't feel the US is threatened if China accesses Venezuelan energy because in an emergency situation if we had to interrupt the energy flow, we would rather interrupt it in the Caribbean than some place in Russia," stated Robert Zoellick, deputy Secretary of State.
U.S. retail gas prices rose to $3.07 per gallon at the pump.
Endesa rejected the hostile bid from Gas Natural as “clearly insufficient” and stated “the Board of Directors will adopt all available legal actions in order to defend both the company and shareholder’s interests.” I always thought company and shareholder interests were one and the same. Maybe in Spain they are not.
Surprisingly to some, the ISM Services Index rose to 65% in August from 60.5% in July.
Crude is trading around $65.58 a barrel.
Hu’s visit to Canada is the first by a Chinese president since 1997, and only the third since 1970. Hu will be in eastern Canada from September 8 to September 11, and then will fly to western Canada for two days on September 16 after the UN Summit. A senior Canadian government official told Reuters “obviously China has a strong interest in getting a piece of the action in the key areas where they see themselves as along term customer--- minerals and energy are key…what we’re seeing with China is a strategic partnership, a strategic alliance in those areas which can be mutually beneficial.” One day we will wake up to the fact that, under the Bush administration, our strategic alliances with trading partners were greatly diminished. When was the last time Bush spent five days in Canada? When was the last time he spent five days in Mexico? I know when he last spent 5 days in Crawford, Texas.
Fifty-nine percent of U.S. in-market vehicle shoppers say that gas prices have either changed their minds or strongly influenced purchase decisions, according to the August 2005 AutoVIBES, a monthly automotive study from Harris Interactive(R) and Kelley Blue Book Marketing Research tracking consumer automotive buying intentions. This is an increase of 13 percentage points since last month and an all-time
high since AutoVIBES began tracking the effect of gas prices on vehicle choice in April 2004. In addition, 42 percent of vehicle shoppers indicate that they would seriously consider a more fuel-efficient vehicle if gas prices were to increase an additional $0.25 above the current national average (which was $2.61 per gallon on August 26, 2005). This is an increase of 12 percentage points since last month and an all-time high since tracking began in April 2004.
According to a new Transatlantic Trends 2005 survey of Americans and Europeans released today finds that six months after George W. Bush's ambitious outreach to Europe, European public opinion toward the United States remains unchanged. Both Americans and Europeans feel relations have stayed the same (52% EU9, 50% Americans).(1) The survey also reveals that 55% of Europeans (EU9) desire a more independent approach from the United States on international security and diplomatic affairs.While opinion toward the United States has not improved, there seems to be no increase in anti-Americanism as some had feared. Despite their 72% disapproval rating of President Bush's handling of international policies, Europeans put disapproval of U.S. leadership in world affairs at just 59% (the same as in 2004). Furthermore, warmth of feeling toward the United States remains at 50 degrees on a thermometer scale of 100 (51 in 2004). Americans on the other hand continue to want closer relations with the European Union and desire strong EU leadership in world affairs.
Transocean has seven rigs earning over $200,000 a day. The company's president stated that would rise to 15 in six months and 19 a year from now. By this time next year, he said, six rigs would be over $300,000 a day and "a number" would surpass $400,000. Those numbers, he indicated, could be conservative.
If the Machinists strike at Boeing extends through the end of September, it could force the company to postpone delivery of 42 airplanes worth more than $4.1 billion at list prices, according to an analysis by The Seattle Times. Thirty of the expected deliveries, or more than 70 percent, are the popular narrow-body 737s assembled at the company's Renton plant. The delivery projections were obtained from the Airclaims CASE database.
British Prime Minister and EU President Tony Blair and Indian Prime Minister Dr. Manmohan Singh announced today that the public sector air carrier Indian Airlines will buy 43 Airbus aircraft for 2.2 billion dollars.
Now I would like to turn to the second quarter for Albertson's and a further analysis. Reported net earnings for the quarter were $107 million or $0.29 per diluted share versus net earnings of $104 million or $0.28 per diluted share for last year's second quarter. Earnings from continuing operations were $110 million or $0.30 per diluted share versus $125 million or $0.34 per diluted share in the same period last year.
Stephen Church: “Prior to 1993, the sources of household cash flow were split about 55% from income and 45% from new debt. Beginning in 1993, new debt increasingly became the source of cash flow. In 2005, new debt of about 12% of GDP should provide nearly 86% of household cash flow…Until 1992, households usually generated over 50% of new cash flow from “operating” activities. Beginning in 1993, New Debt surpassed “operating” cash flow as the source of new cash. In 2005, new debt is expected to provide 86% of new household cash. In 1992, “operating” cash flow provided enough money to cover repayments of debt and new residential investment with $82 billion left for other investing. In 2004, “operating” cash flow left households about $800 billion short of the cash needed to cover repayments of debt and new residential construction. In 2005, “operating” cash flow should provide $1.0 trillion less than debt repayment and residential construction needs…Our analysis of the Statement of Cash Flows shows that U.S. households require access to new cash sources in excess of 13% of GDP in order to maintain a strong economy. Since current operating cash flow generates only 2% of GDP, households depend on minimum debt financing needs of about 11% of GDP.”
Bernie Schaeffer: “Never confuse a market that is structurally supported by complacent derivatives players and by abnormally high liquidity that is threatened by a tightening Fed and an inverting yield curve with a market that is invulnerable to external shocks.”
Paul Kasriel: “The negative supply-side shock to economic growth emanating from the destruction caused by Hurricane Katrina is bad news for an U.S. housing market bubble. To the degree that personal income growth is constrained nationwide, already debt-burdened households will find it more difficult to make their monthly mortgage payments and purchase necessities, much less luxuries. This could set in motion a slow-motion rise in mortgage defaults.”
George Friedman: “Rather, it was geography -- the extraordinary system of rivers that flowed through the Midwest and allowed them to ship their surplus to the rest of the world. All of the rivers flowed into one -- the Mississippi -- and the Mississippi flowed to the ports in and around one city: New Orleans. It was in New Orleans that the barges from upstream were unloaded and their cargoes stored, sold and reloaded on ocean-going vessels. Until last Sunday, New Orleans was, in many ways, the pivot of the American economy.
The ports of South Louisiana and New Orleans, which run north and south of the city, are as important today as at any point during the history of the republic. On its own merit, the Port of South Louisiana is the largest port in the United States by tonnage and the fifth-largest in the world. It exports more than 52 million tons a year, of which more than half are agricultural products -- corn, soybeans and so on. A larger proportion of U.S. agriculture flows out of the port. Almost as much cargo, nearly 57 million tons, comes in through the port -- including not only crude oil, but chemicals and fertilizers, coal, concrete and so on.
A simple way to think about the New Orleans port complex is that it is where the bulk commodities of agriculture go out to the world and the bulk commodities of industrialism come in. ... . If these facilities are gone, more than the price of goods shifts: The very physical structure of the global economy would have to be reshaped. Consider the impact to the U.S. auto industry if steel doesn't come up the river, or the effect on global food supplies if U.S. corn and soybeans don't get to the markets.
The problem is that there are no good shipping alternatives. River transport is cheap, and most of the commodities we are discussing have low value-to-weight ratios. The U.S. transport system was built on the assumption that these commodities would travel to and from New Orleans by barge, where they would be loaded on ships or offloaded. Apart from port capacity elsewhere in the United States, there aren't enough trucks or rail cars to handle the long-distance hauling of these enormous quantities -- assuming for the moment that the economics could be managed, which they can't be.”
"I don't feel the US is threatened if China accesses Venezuelan energy because in an emergency situation if we had to interrupt the energy flow, we would rather interrupt it in the Caribbean than some place in Russia," stated Robert Zoellick, deputy Secretary of State.
U.S. retail gas prices rose to $3.07 per gallon at the pump.
Endesa rejected the hostile bid from Gas Natural as “clearly insufficient” and stated “the Board of Directors will adopt all available legal actions in order to defend both the company and shareholder’s interests.” I always thought company and shareholder interests were one and the same. Maybe in Spain they are not.
Surprisingly to some, the ISM Services Index rose to 65% in August from 60.5% in July.
Crude is trading around $65.58 a barrel.
Hu’s visit to Canada is the first by a Chinese president since 1997, and only the third since 1970. Hu will be in eastern Canada from September 8 to September 11, and then will fly to western Canada for two days on September 16 after the UN Summit. A senior Canadian government official told Reuters “obviously China has a strong interest in getting a piece of the action in the key areas where they see themselves as along term customer--- minerals and energy are key…what we’re seeing with China is a strategic partnership, a strategic alliance in those areas which can be mutually beneficial.” One day we will wake up to the fact that, under the Bush administration, our strategic alliances with trading partners were greatly diminished. When was the last time Bush spent five days in Canada? When was the last time he spent five days in Mexico? I know when he last spent 5 days in Crawford, Texas.
Fifty-nine percent of U.S. in-market vehicle shoppers say that gas prices have either changed their minds or strongly influenced purchase decisions, according to the August 2005 AutoVIBES, a monthly automotive study from Harris Interactive(R) and Kelley Blue Book Marketing Research tracking consumer automotive buying intentions. This is an increase of 13 percentage points since last month and an all-time
high since AutoVIBES began tracking the effect of gas prices on vehicle choice in April 2004. In addition, 42 percent of vehicle shoppers indicate that they would seriously consider a more fuel-efficient vehicle if gas prices were to increase an additional $0.25 above the current national average (which was $2.61 per gallon on August 26, 2005). This is an increase of 12 percentage points since last month and an all-time high since tracking began in April 2004.
According to a new Transatlantic Trends 2005 survey of Americans and Europeans released today finds that six months after George W. Bush's ambitious outreach to Europe, European public opinion toward the United States remains unchanged. Both Americans and Europeans feel relations have stayed the same (52% EU9, 50% Americans).(1) The survey also reveals that 55% of Europeans (EU9) desire a more independent approach from the United States on international security and diplomatic affairs.While opinion toward the United States has not improved, there seems to be no increase in anti-Americanism as some had feared. Despite their 72% disapproval rating of President Bush's handling of international policies, Europeans put disapproval of U.S. leadership in world affairs at just 59% (the same as in 2004). Furthermore, warmth of feeling toward the United States remains at 50 degrees on a thermometer scale of 100 (51 in 2004). Americans on the other hand continue to want closer relations with the European Union and desire strong EU leadership in world affairs.
Transocean has seven rigs earning over $200,000 a day. The company's president stated that would rise to 15 in six months and 19 a year from now. By this time next year, he said, six rigs would be over $300,000 a day and "a number" would surpass $400,000. Those numbers, he indicated, could be conservative.
If the Machinists strike at Boeing extends through the end of September, it could force the company to postpone delivery of 42 airplanes worth more than $4.1 billion at list prices, according to an analysis by The Seattle Times. Thirty of the expected deliveries, or more than 70 percent, are the popular narrow-body 737s assembled at the company's Renton plant. The delivery projections were obtained from the Airclaims CASE database.
British Prime Minister and EU President Tony Blair and Indian Prime Minister Dr. Manmohan Singh announced today that the public sector air carrier Indian Airlines will buy 43 Airbus aircraft for 2.2 billion dollars.
Now I would like to turn to the second quarter for Albertson's and a further analysis. Reported net earnings for the quarter were $107 million or $0.29 per diluted share versus net earnings of $104 million or $0.28 per diluted share for last year's second quarter. Earnings from continuing operations were $110 million or $0.30 per diluted share versus $125 million or $0.34 per diluted share in the same period last year.
Year to date through the first half of fiscal year 2005, reported net
earnings reached $207 million or $0.56 per diluted share versus $140 million
or $0.38 per diluted share in last year's first half. First half earnings
from continuing operations reached $217 million or $0.59 per diluted share
versus $181 million or $0.49 per diluted share in the same period last year.
During the second quarter, total sales reached $10.2 billion, just
slightly higher than last year's second quarter revenue. Revenue was helped
by a continuing recovery in Southern California but was pressured by the
deflationary impact of continuing price cuts through the company's "Check The
Price" program. The company continued to make investments in improving its
price positioning versus non-traditional price competitors during the quarter.
Comparable store sales were flat for the quarter and identical store sales
fell slightly by (0.1)%.
Gross margin in the quarter declined 21 basis points to 28.04% versus last
year's second quarter at 28.25%. Selling, general and administrative expenses
were up 7 basis points from last year's second quarter at 25.07%. The company
stayed on track to meet its $1.25 billion cost reduction goal by the end of
fiscal year 2006, recording $31 million in new cost reductions during the
second quarter of 2005, bringing the total cost reduction achieved since
mid-2001 to $1.085 billion.
"The company affirmed that it is moving even more aggressively to divest
underperforming assets or what it now refers to as "Non-Core" assets. These
divestitures would allow it to focus more intently on its growing "Core" asset
base. In aggressively pursuing this strategy, the company plans to unlock the
significant value that is embedded in the "Non-Core" portion of its owned real
estate portfolio. The company pointed out that Albertsons now owns
approximately 70 million square feet or 60+% of its nearly 120 million square
feet of real estate. This valuable real estate portfolio has been accumulated
over the past several decades across its stable of strong local/regional
banners, including Shaw's, Jewel, Sav-on, Acme, Osco and Albertsons in 37
states.
The company is providing this information to give investors better
transparency into the company's real estate holdings and the positive impact
they can have on the company's future. For obvious competitive reasons, the
company is articulating its new "Core/Non-Core" asset groups without divulging
the specific assets, divisions or properties within each sector. As Non-Core
assets are divested and monetized for their real estate/business value... the
company, anchored by its Core divisions, expects to emerge as a smaller but
more profitable and growing entity.
Larry Johnston, Chairman, CEO and President, said "The announcement Friday
that we are exploring our strategic alternatives including a possible sale of
the company is important. At the same time, I want to be clear that while we
are going through this process we will also be aggressively running this
company and continuing to execute on the same strategy that we unveiled when
the turnaround began over four years ago. In that regard, we don't plan to
slow down or take any time off! We are now at the point in our turnaround
where we are clarifying our end game... preparing to exit even more
underperforming markets in order to monetize their embedded real estate and
business value for shareowners... driving even harder for operational
excellence with programs like Six Sigma and Check The Price. This will enable
us to focus on a strong and growing set of 'Core' assets that will form a
smaller yet more profitable best-in-class company with leading market
positions and a very exciting future."
The company reaffirmed its previous guidance for fiscal year 2005 earnings
of between $1.37 - $1.47 per diluted share from continuing operations
excluding any extraordinary events and also reaffirmed its outlook for
positive comparable and identical store sales for fiscal year 2005.
Capital expenditures are now expected to be $300 million lower for the
year, or between $1.0 and $1.1 billion, due to a more refined focus on the
Core divisions coupled with improvements in both new and remodeled store
construction processes as well as productivity improvements in technology
investments.
For the 26 weeks ended August 4, operating cash flow amounted to $645 million
or $1.43 per share.
It should be noted that the net value of land, buildings, and equipment totals
only a slim $10.1 million on the company's books. The company's CEO has clearly
delineated an ownership of 70 million square feet of real estate accumulated over
several decades. At the end of last week, I focused on the hidden values embedded
in the real estate. Almost one fifth of a square foot of company owned real estate
sits behind every share of Albertson's stock. As I mentioned, Joe Albertson took
pride in getting the best locations. I am not a real estate analyst; however, I know
that, from visiting many Albertson's locations, the effort to monetize the embedded
real estate will create shareholder value certainly exceeding last night's closing
price for the stock.
It should be noted that, over the last two trading days, 20% of the 370 million
shares have traded. Johnson has hung a for-sale sign on the company and wet the
appetite of the buyers by mentioning the 70 million square feet of owned real estate.
Let's be patient and wait for the froth to come to the top.
Tuesday, September 06, 2005
Perception Of Risk
9/6/05 Perception Of Risk
John P. Hussman: “In effect, recessions are periods when there is a mismatch between the mix of goods supplied by the economy and the mix of goods demanded. That mismatch causes a buildup of inventories in some industries, and shortages in others. There is no such thing as a “representative consumer” who just consumes less, as Keynes' simplistic modeling of the economy would have people believe. The defining features of a recession are dislocations and mismatches, not “general weakness in aggregate demand.”
Lehman Brothers cut its equities weighting to 65% from 70% and fixed-income weighting to 15% from 17.5%, while increasing its cash weighting to 20% from 12.5%. "Hurricane Katrina appears to have increased the level of economic risk and we believe that warrants a more modest overweight position in equities. Rising energy prices and health care costs put the consumer under more pressure adding to the economic risk and warranting a more modest overweight position in equities," the brokerage firm stated.
"I think what we have in store is a slow deflating of the housing bubble, not a bursting of the bubble," said Mark Zandi, chief economist at Economy.com. "But if mortgage rates rise more sharply than I am expecting, then the downturn in housing could be more severe."
Henry To: “Readers should be reminded that the halt in the rise of the Fed Funds rate in the face of an economic slowdown isn't exactly bullish news. Don't forget that the market declined for another 21 months after the Fed started easing in January 2001.”
CNPC denied a news report Tuesday that it is negotiating to sell part of PetroKazakhstan Inc. to a Kazak state-owned company.
China Southern Airlines ordered 10 Airbus A 330s.
For long-term investors, Ranbaxy, India’s largest pharmaceutical company, is looking to list its shares in the U.S. market.
Bombay’s Sensex index is at an all-time high and closing in on the 8,000 level.
Chiron rejected the Novartis offer as “inadequate.” In all likelihood, shareholders will receive a kiss but, in my view, a greater return can be expected, as I noted over the weekend, in Albertsons.
Gas Natural plans to launch a hostile offer for Endesa SA, Spain’s largest utility company, and is offering 0.569 shares of stock and 7.34 euros in cash or about $28.75 billion.
Wood Mackenzie’s Eugene Kim: "Only when you reman the platforms and push the start button will you know the damage level. It's early estimates, but the numbers look quite staggering . . . these are three times greater than with Hurricane Ivan."
Declines in GDP, Mfg ISM, and Factory orders, dropped the BullBearWise Index below 50 at the end of last week.
According to Bloomberg, traders are the most bearish on the dollar since March. It still appears that the Fed will raise rates at their Sept. 20 meeting.
On September 1, Albertsons declared a regular quarterly cash dividend of $0.19, payable on Nov. 8 to stockholders of record on Oct.12. This yield of 3.38% should provide an adequate return while you wait for the board of Albertsons to maximize shareholder value.
Jeanette Winterson: "What you risk reveals what you value."
John P. Hussman: “In effect, recessions are periods when there is a mismatch between the mix of goods supplied by the economy and the mix of goods demanded. That mismatch causes a buildup of inventories in some industries, and shortages in others. There is no such thing as a “representative consumer” who just consumes less, as Keynes' simplistic modeling of the economy would have people believe. The defining features of a recession are dislocations and mismatches, not “general weakness in aggregate demand.”
Lehman Brothers cut its equities weighting to 65% from 70% and fixed-income weighting to 15% from 17.5%, while increasing its cash weighting to 20% from 12.5%. "Hurricane Katrina appears to have increased the level of economic risk and we believe that warrants a more modest overweight position in equities. Rising energy prices and health care costs put the consumer under more pressure adding to the economic risk and warranting a more modest overweight position in equities," the brokerage firm stated.
"I think what we have in store is a slow deflating of the housing bubble, not a bursting of the bubble," said Mark Zandi, chief economist at Economy.com. "But if mortgage rates rise more sharply than I am expecting, then the downturn in housing could be more severe."
Henry To: “Readers should be reminded that the halt in the rise of the Fed Funds rate in the face of an economic slowdown isn't exactly bullish news. Don't forget that the market declined for another 21 months after the Fed started easing in January 2001.”
CNPC denied a news report Tuesday that it is negotiating to sell part of PetroKazakhstan Inc. to a Kazak state-owned company.
China Southern Airlines ordered 10 Airbus A 330s.
For long-term investors, Ranbaxy, India’s largest pharmaceutical company, is looking to list its shares in the U.S. market.
Bombay’s Sensex index is at an all-time high and closing in on the 8,000 level.
Chiron rejected the Novartis offer as “inadequate.” In all likelihood, shareholders will receive a kiss but, in my view, a greater return can be expected, as I noted over the weekend, in Albertsons.
Gas Natural plans to launch a hostile offer for Endesa SA, Spain’s largest utility company, and is offering 0.569 shares of stock and 7.34 euros in cash or about $28.75 billion.
Wood Mackenzie’s Eugene Kim: "Only when you reman the platforms and push the start button will you know the damage level. It's early estimates, but the numbers look quite staggering . . . these are three times greater than with Hurricane Ivan."
Declines in GDP, Mfg ISM, and Factory orders, dropped the BullBearWise Index below 50 at the end of last week.
According to Bloomberg, traders are the most bearish on the dollar since March. It still appears that the Fed will raise rates at their Sept. 20 meeting.
On September 1, Albertsons declared a regular quarterly cash dividend of $0.19, payable on Nov. 8 to stockholders of record on Oct.12. This yield of 3.38% should provide an adequate return while you wait for the board of Albertsons to maximize shareholder value.
Jeanette Winterson: "What you risk reveals what you value."
Monday, September 05, 2005
Private Equity Firms And Mature Companies
9/5/05 Private Equity Firms And Mature Companies
In the 1990s, attracting capital to the food industry was more difficult than it is today.
"We had to work like heck to find anyone to co-invest with us on anything," said John Trucano, who ran the Food Fund, a venture-capital firm that specialized in food investments. "Our timing was very bad."
Private-equity funds, which raise money to invest in, acquire and lend money to mature companies, were then active in the high-growth tech sector and paid little attention to food.
"There's a fad element to investing, and food wasn't in vogue," said Scott Richardson, managing director for Houlihan Lokey Howard & Zukin in Minneapolis. Today, investors are more interested in stable, mature companies. Food companies offer that security.
"You will pay a premium to get [these companies] and you may hit a double with your investment and not a home run. But guess what? A double right now is pretty good," Richardson said.
Darren Acheson of Minneapolis-based Goldner Hawn Johnson & Morrison said his firm has invested in food companies for 16 years, but he understands why the sector has become more popular with some of his contemporaries.
"It's defensive, it has strong recurring revenue and cash flow, and parts of it are still growing nicely," he said.
In my view, there will be a host of private equity firms lined up to buy Albertsons. They will be competing with companies in the supermarket business from abroad and U.S. firms looking to expand within our borders.
"As regulatory guidelines are introduced over the next two to three years
and some of the biggest biopharmaceutical blockbusters lose patent
protection, the biogenerics market is expected to see exceptional growth and
rapidly reach billion-dollar levels," notes Frost & Sullivan (http://biotech.frost.com) Industry Analyst Himanshu Parmar. "The markets in Europe and the United States have the potential to generate sales of USD16.39 billion by 2011."
Mike Burk provides some fine background analysis on the month of September. The following are his findings: “September is widely understood to be the worst month of the year and by some measures it has been. Measured by the OTC, September is the only month that has had an average (mean) negative return (-0.3%), however, since 1963 the OTC has been up during 60% of Septembers.
As measured by the percentage of the months that have been up September beats July - 51%, February - May - June - 56% each, March - 58% and October 59% putting it firmly mid pack. The problem is that when September is bad it has been really bad.
Breaking OTC performance down further, to Septembers in the 1st year of the Presidential cycle, the results are even better. During the 1st year of the Presidential cycle Septembers have been up 70% of the time, but the average return has been a loss of 0.9%. Septembers 70% winning percentage has only been surpassed by April and July at 73% each and, measured by average return, September is ahead of March at -1.9% and June at -1.5%.
When measured by the S&P 500 (SPX) from 1928 it is easy to see where September got its reputation as the worst month of the year. For all years, September is the worst of 3 that have averaged negative returns at -1.2%. The other two months with negative returns, February and May have had average returns of -0.2%. September is the only month that has been up less than half of the time at 43%, the next worst are February and November, both up 54% of the time. Breaking SPX performance down further to the 1 st year of the Presidential cycle September has been much worse, up only 26% of the time with an average loss of 2.5%. Three other months have up less than 50% of the time, February (40% avg. rtn. -1.7%), June (42% avg. rtn. +0.8%) and April (45% avg. rtn. +2.5%)."
China has become the second largest trade partner of the European Union (EU) only after the United States, moving up from the fourth place in 1999, according to a report issued on Friday by Eurostat, the statistical office of the 25-nation bloc.
Crude is trading around $65 a barrel. The LOOP is reported to be operating at 75% of capacity. Before you get too excited, the Chevron refinery and the ConocoPhillips refinery suffered “major damage.” Together, they process 580,000 barrels of crude daily.
China will sign a contract to purchase aircraft from Airbus SAS, Europe's biggest plane maker, during a visit of U.K. Prime Minister Tony Blair to Beijing this week, a spokesman for Blair said.
Steve Scalise, Louisiana State Representative on the 17th St. Canal:
“I checked on the progress of the breach in the Canal. As many of you have probably seen by now, it was roughly a 200-foot wide break in the cement structures on the Orleans Parish side of the Canal just south of the Old Hammond Highway Bridge. I watched as military helicopters dropped large sand bags into the opening. Based on what I saw I would estimate that they are 2/3rds completed with the project. You can finally start to see the break being filled up, as they drop sand bags up to the water line. Then they have dump trucks dropping large chunks of cement on top of the sand bags to form a wall. They will finally be able to pump out the water once the temporary wall is restored.”
William Hester, CFA: " The shares of companies deleted from the S&P 500 have consistently outperformed those that took their place. Since the beginning of 1998, the median annualized return of all stocks deleted from the index and held from their exit date through March 15 of this year was 15.4 percent. The median annualized return of all stocks that were added to the index was 2.9 percent."
John Roberts, who clerked for William Rehnquist in 1980 and 1981, was nominated by Bush for Chief Justice.
Albert Einstein: "Laws alone can not secure freedom of expression; in order that every man present his views without penalty there must be spirit of tolerance in the entire population."
In the 1990s, attracting capital to the food industry was more difficult than it is today.
"We had to work like heck to find anyone to co-invest with us on anything," said John Trucano, who ran the Food Fund, a venture-capital firm that specialized in food investments. "Our timing was very bad."
Private-equity funds, which raise money to invest in, acquire and lend money to mature companies, were then active in the high-growth tech sector and paid little attention to food.
"There's a fad element to investing, and food wasn't in vogue," said Scott Richardson, managing director for Houlihan Lokey Howard & Zukin in Minneapolis. Today, investors are more interested in stable, mature companies. Food companies offer that security.
"You will pay a premium to get [these companies] and you may hit a double with your investment and not a home run. But guess what? A double right now is pretty good," Richardson said.
Darren Acheson of Minneapolis-based Goldner Hawn Johnson & Morrison said his firm has invested in food companies for 16 years, but he understands why the sector has become more popular with some of his contemporaries.
"It's defensive, it has strong recurring revenue and cash flow, and parts of it are still growing nicely," he said.
In my view, there will be a host of private equity firms lined up to buy Albertsons. They will be competing with companies in the supermarket business from abroad and U.S. firms looking to expand within our borders.
"As regulatory guidelines are introduced over the next two to three years
and some of the biggest biopharmaceutical blockbusters lose patent
protection, the biogenerics market is expected to see exceptional growth and
rapidly reach billion-dollar levels," notes Frost & Sullivan (http://biotech.frost.com) Industry Analyst Himanshu Parmar. "The markets in Europe and the United States have the potential to generate sales of USD16.39 billion by 2011."
Mike Burk provides some fine background analysis on the month of September. The following are his findings: “September is widely understood to be the worst month of the year and by some measures it has been. Measured by the OTC, September is the only month that has had an average (mean) negative return (-0.3%), however, since 1963 the OTC has been up during 60% of Septembers.
As measured by the percentage of the months that have been up September beats July - 51%, February - May - June - 56% each, March - 58% and October 59% putting it firmly mid pack. The problem is that when September is bad it has been really bad.
Breaking OTC performance down further, to Septembers in the 1st year of the Presidential cycle, the results are even better. During the 1st year of the Presidential cycle Septembers have been up 70% of the time, but the average return has been a loss of 0.9%. Septembers 70% winning percentage has only been surpassed by April and July at 73% each and, measured by average return, September is ahead of March at -1.9% and June at -1.5%.
When measured by the S&P 500 (SPX) from 1928 it is easy to see where September got its reputation as the worst month of the year. For all years, September is the worst of 3 that have averaged negative returns at -1.2%. The other two months with negative returns, February and May have had average returns of -0.2%. September is the only month that has been up less than half of the time at 43%, the next worst are February and November, both up 54% of the time. Breaking SPX performance down further to the 1 st year of the Presidential cycle September has been much worse, up only 26% of the time with an average loss of 2.5%. Three other months have up less than 50% of the time, February (40% avg. rtn. -1.7%), June (42% avg. rtn. +0.8%) and April (45% avg. rtn. +2.5%)."
China has become the second largest trade partner of the European Union (EU) only after the United States, moving up from the fourth place in 1999, according to a report issued on Friday by Eurostat, the statistical office of the 25-nation bloc.
Crude is trading around $65 a barrel. The LOOP is reported to be operating at 75% of capacity. Before you get too excited, the Chevron refinery and the ConocoPhillips refinery suffered “major damage.” Together, they process 580,000 barrels of crude daily.
China will sign a contract to purchase aircraft from Airbus SAS, Europe's biggest plane maker, during a visit of U.K. Prime Minister Tony Blair to Beijing this week, a spokesman for Blair said.
Steve Scalise, Louisiana State Representative on the 17th St. Canal:
“I checked on the progress of the breach in the Canal. As many of you have probably seen by now, it was roughly a 200-foot wide break in the cement structures on the Orleans Parish side of the Canal just south of the Old Hammond Highway Bridge. I watched as military helicopters dropped large sand bags into the opening. Based on what I saw I would estimate that they are 2/3rds completed with the project. You can finally start to see the break being filled up, as they drop sand bags up to the water line. Then they have dump trucks dropping large chunks of cement on top of the sand bags to form a wall. They will finally be able to pump out the water once the temporary wall is restored.”
William Hester, CFA: " The shares of companies deleted from the S&P 500 have consistently outperformed those that took their place. Since the beginning of 1998, the median annualized return of all stocks deleted from the index and held from their exit date through March 15 of this year was 15.4 percent. The median annualized return of all stocks that were added to the index was 2.9 percent."
John Roberts, who clerked for William Rehnquist in 1980 and 1981, was nominated by Bush for Chief Justice.
Albert Einstein: "Laws alone can not secure freedom of expression; in order that every man present his views without penalty there must be spirit of tolerance in the entire population."
Sunday, September 04, 2005
U.S. Citizens Are Not Refugees In The U.S.
9/4/05 U.S. Citizens Are Not Refugees In The U.S.
Wage stagnation spread throughout most of the Pennsylvania wage distribution in 2004, with the lowest-paid workers losing ground for the third year in a row, according to the State of Working Pennsylvania 2005 released Saturday by the Harrisburg-based Keystone
Research Center. In spite of three years of overall economic recovery, the inflation-
adjusted hourly earnings of typical low-wage Pennsylvania workers fell 10
cents per hour between 2003 and 2004 and 15 cents per hour since 2001, to
$7.16 per hour. Falling wages contributed to a rise in Pennsylvania poverty
rates by 20 percent since 1999-2000. According to the KRC report, low-wage Pennsylvania workers earn less in inflation-adjusted terms than they did in 1979 as well as in 2001 and 2003. Their current wage level amounts to about $15,000 per year if these workers are employed full-time, full-year. "What the wage data suggest," says Stephen Herzenberg, an economist and executive director of the Keystone Research Center, "is that Pennsylvania's half-million lowest-paid workers will be hard hit by rising energy costs. A dramatic energy price spike could push many low-wage families over the edge."
Herzenberg notes that the Pennsylvania wage pinch is not limited to low-
wage workers. "The data also show that most wage earners lost ground in 2004, including
typical high-wage workers. This leads to the current near-zero household
savings rate and means that rising energy costs may well force a reduction in
consumer spending." It is the possibility of a decline in consumer spending that has led some Wall Street economists, even before Hurricane Katrina struck the Gulf Coast,
to express concern about the possibility of a general economic slowdown.
"Given the current economic context and wage performance over the last
year, the Pennsylvania General Assembly should raise Pennsylvania's minimum
wage above the federal level this year, as 17 other states have already done,"
said Herzenberg. A rise in the state's minimum wage would stabilize the state's economy in a moment of uncertainty by enabling those who are working hardest to make ends
meet and maintain their standard of living. According to the report, a large body of economic research examining the real-world performance of state economies after minimum wage hikes shows that these do not lead to job loss. "Our estimate is that about 510,000 Pennsylvania low-wage workers would benefit from a minimum wage increase. 71 percent of these are over the age of 20 and two-thirds are women. We also estimate that nearly a third of the benefit of a minimum wage rise would go to the poorest fifth of Pennsylvania households," said Herzenberg. He adds that another 350,000 Pennsylvanians would benefit indirectly as a
result of minimum wage increase. According to Herzenberg, "The minimum wage has lost 41 percent of its inflation-adjusted value since 1968, and more than two-thirds of its value relative to the value of what the average worker produces in an hour. Pennsylvania's low-wage workers are at least as deserving of a pay raise as Pennsylvania's legislators." I am confident that a similar study for 2005 will show the same results for the state of Pennsylvania as well as many other states in the nation, and that includes Louisiana, Mississippi, and Alabama.
U.S. Senator Mary Landrieu, D-La., issued the following statement this afternoon regarding her call yesterday for President Bush to appoint a cabinet-level official to oversee Hurricane Katrina relief and recovery efforts within 24 hours.
Sen. Landrieu said:
“Yesterday, I was hoping President Bush would come away from his tour of the regional devastation triggered by Hurricane Katrina with a new understanding for the magnitude of the suffering and for the abject failures of the current Federal Emergency Management Agency. 24 hours later, the President has yet to answer my call for a cabinet-level official to lead our efforts. Meanwhile, FEMA, now a shell of what it once was, continues to be overwhelmed by the task at hand.
I understand that the U.S. Forest Service had water-tanker aircraft available to help douse the fires raging on our riverfront, but FEMA has yet to accept the aid. When Amtrak offered trains to evacuate significant numbers of victims – far more efficiently than buses – FEMA again dragged its feet. Offers of medicine, communications equipment and other desperately needed items continue to flow in, only to be ignored by the agency.
But perhaps the greatest disappointment stands at the breached 17th Street levee. Touring this critical site yesterday with the President, I saw what I believed to be a real and significant effort to get a handle on a major cause of this catastrophe. Flying over this critical spot again this morning, less than 24 hours later, it became apparent that yesterday we witnessed a hastily prepared stage set for a Presidential photo opportunity; and the desperately needed resources we saw were this morning reduced to a single, lonely piece of equipment. The good and decent people of southeast Louisiana and the Gulf Coast – black and white, rich and poor, young and old – deserve far better from their national government.
Mr. President, I’m imploring you once again to get a cabinet-level official stood up as soon as possible to get this entire operation moving forward region-wide with all the resources – military and otherwise – necessary to relieve the unmitigated suffering and economic damage that is unfolding.”
Firefox 1.5 beta will be released on September 8.
China’s Hu Jintao will visit Microsoft on Monday and have dinner at the home of Bill Gates in Medina, a section of Bellevue, WA. According to a court document, Kai-Fu Lee, a former Microsoft VP who left to work for Google in July, Microsoft is scheduled to outsource more than 1,000 jobs a year to China. Company spokeswoman Stacy Drake stated “we are growing our work force there and will continue to do so; however, that growth has not and will not replace jobs here in Redmond.” That begs the question. Shifting jobs to India and China has cut down on expansion in Redmond’s backyard, such as, a new campus to be built in Issaquah, WA. That expansion was put on hold, and likely will not go forward.
Meanwhile, Bush had to cancel his meeting with Hu because of Katrina but that the two leaders agreed to talk in New York in mid-September. Hu and Bush agreed to meet when they attend ceremonies in New York for the 60th anniversary of the founding of the United Nations, the Chinese Foreign Ministry said. That event takes place Sept. 14-16.
UC Berkeley researchers found that, after adjusting for inflation, wages statewide fell during the first half of 2005. According to Dube, the UC Berkeley economist, this was the second year in a row that real wages fell in California.
"What that tells you is that the labor market is still soft,'' he said. The Berkeley labor economists noted that the state's economy has gotten a huge boost from housing. Construction and related fields such as real estate or lending, all related to the housing boom, accounted for half of all the net job growth in the state between 2002 and 2005.
"I think shopper spending could be a train wreck under the Christmas tree," said Burt Flickinger III, managing director for New York-based Strategic Resource Group. He estimated there will be $35 billion less for consumer spending purchases for the holiday season as shoppers pay more for fuel and consumer goods.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, said stores face their biggest challenge in four years, since the Sept. 11, 2001, terror attacks depressed Christmas sales. "If Katrina was simply a devastation of the area, we could have weathered it," said Niemira. "But because of these ripple effects, Katrina is having a nationwide impact. There were already red flags out there, but this just makes us feel more uncomfortable."
W.D. Crotty: Based on yesterday's closing price, Albertsons traded for 5.7 times EBITDA ( trailing annual earnings before interest, taxes, depreciation, and amortization)-to-EV( enterprise value). Kroger, Safeway, and Wal-Mart traded for 7.1, 7.6, and 9.8 times EBITDA-to-EV, respectively. This does not reflect the hidden value of the real estate in the 2,500 Albertson stores located in 37 states.
Andrew Lo writes of a possible hedge fund shake-out at
http://web.mit.edu/alo/www/papers/systemic2.pdf
Yesterday, I wrote that I have not sold one share of PetroKazakhstan stock. It might be well to remember that exactly one year ago Mittal hired Roeland Baan to run Mittal Steel Europe. That is but a small part of the story. Baan joined Mittal from SHV Holdings, where he spent 8 years as a member of the executive comittee of the company's ebergy division. Before that he spent 16 years with Shell, holding a variety of positions around the world. I feel confident that Baan is in a position to assess the true worth of PKZ to ONGC/Mittal. As such, I believe ONGC/Mittal will top CNCP's bid. Laying low does not equate to leaving the bidding contest.
From Cynical-C Blog: “I’m not meeting again with that goddamned bitch,” Bush screamed at aides who suggested he meet again with Cindy Sheehan, the war-protesting mother whose son died in Iraq. “She can go to hell as far as I’m concerned!”
“Who gives a flying fuck what the polls say,” he screamed at a recent strategy meeting. “I’m the President and I’ll do whatever I goddamned please. They don’t know shit.”
Bush’s behavior, according to prominent Washington psychiatrist, Dr. Justin Frank, author of “Bush on the Couch: Inside the Mind of the President,” is all too typical of an alcohol-abusing bully who is ruled by fear.
Wage stagnation spread throughout most of the Pennsylvania wage distribution in 2004, with the lowest-paid workers losing ground for the third year in a row, according to the State of Working Pennsylvania 2005 released Saturday by the Harrisburg-based Keystone
Research Center. In spite of three years of overall economic recovery, the inflation-
adjusted hourly earnings of typical low-wage Pennsylvania workers fell 10
cents per hour between 2003 and 2004 and 15 cents per hour since 2001, to
$7.16 per hour. Falling wages contributed to a rise in Pennsylvania poverty
rates by 20 percent since 1999-2000. According to the KRC report, low-wage Pennsylvania workers earn less in inflation-adjusted terms than they did in 1979 as well as in 2001 and 2003. Their current wage level amounts to about $15,000 per year if these workers are employed full-time, full-year. "What the wage data suggest," says Stephen Herzenberg, an economist and executive director of the Keystone Research Center, "is that Pennsylvania's half-million lowest-paid workers will be hard hit by rising energy costs. A dramatic energy price spike could push many low-wage families over the edge."
Herzenberg notes that the Pennsylvania wage pinch is not limited to low-
wage workers. "The data also show that most wage earners lost ground in 2004, including
typical high-wage workers. This leads to the current near-zero household
savings rate and means that rising energy costs may well force a reduction in
consumer spending." It is the possibility of a decline in consumer spending that has led some Wall Street economists, even before Hurricane Katrina struck the Gulf Coast,
to express concern about the possibility of a general economic slowdown.
"Given the current economic context and wage performance over the last
year, the Pennsylvania General Assembly should raise Pennsylvania's minimum
wage above the federal level this year, as 17 other states have already done,"
said Herzenberg. A rise in the state's minimum wage would stabilize the state's economy in a moment of uncertainty by enabling those who are working hardest to make ends
meet and maintain their standard of living. According to the report, a large body of economic research examining the real-world performance of state economies after minimum wage hikes shows that these do not lead to job loss. "Our estimate is that about 510,000 Pennsylvania low-wage workers would benefit from a minimum wage increase. 71 percent of these are over the age of 20 and two-thirds are women. We also estimate that nearly a third of the benefit of a minimum wage rise would go to the poorest fifth of Pennsylvania households," said Herzenberg. He adds that another 350,000 Pennsylvanians would benefit indirectly as a
result of minimum wage increase. According to Herzenberg, "The minimum wage has lost 41 percent of its inflation-adjusted value since 1968, and more than two-thirds of its value relative to the value of what the average worker produces in an hour. Pennsylvania's low-wage workers are at least as deserving of a pay raise as Pennsylvania's legislators." I am confident that a similar study for 2005 will show the same results for the state of Pennsylvania as well as many other states in the nation, and that includes Louisiana, Mississippi, and Alabama.
U.S. Senator Mary Landrieu, D-La., issued the following statement this afternoon regarding her call yesterday for President Bush to appoint a cabinet-level official to oversee Hurricane Katrina relief and recovery efforts within 24 hours.
Sen. Landrieu said:
“Yesterday, I was hoping President Bush would come away from his tour of the regional devastation triggered by Hurricane Katrina with a new understanding for the magnitude of the suffering and for the abject failures of the current Federal Emergency Management Agency. 24 hours later, the President has yet to answer my call for a cabinet-level official to lead our efforts. Meanwhile, FEMA, now a shell of what it once was, continues to be overwhelmed by the task at hand.
I understand that the U.S. Forest Service had water-tanker aircraft available to help douse the fires raging on our riverfront, but FEMA has yet to accept the aid. When Amtrak offered trains to evacuate significant numbers of victims – far more efficiently than buses – FEMA again dragged its feet. Offers of medicine, communications equipment and other desperately needed items continue to flow in, only to be ignored by the agency.
But perhaps the greatest disappointment stands at the breached 17th Street levee. Touring this critical site yesterday with the President, I saw what I believed to be a real and significant effort to get a handle on a major cause of this catastrophe. Flying over this critical spot again this morning, less than 24 hours later, it became apparent that yesterday we witnessed a hastily prepared stage set for a Presidential photo opportunity; and the desperately needed resources we saw were this morning reduced to a single, lonely piece of equipment. The good and decent people of southeast Louisiana and the Gulf Coast – black and white, rich and poor, young and old – deserve far better from their national government.
Mr. President, I’m imploring you once again to get a cabinet-level official stood up as soon as possible to get this entire operation moving forward region-wide with all the resources – military and otherwise – necessary to relieve the unmitigated suffering and economic damage that is unfolding.”
Firefox 1.5 beta will be released on September 8.
China’s Hu Jintao will visit Microsoft on Monday and have dinner at the home of Bill Gates in Medina, a section of Bellevue, WA. According to a court document, Kai-Fu Lee, a former Microsoft VP who left to work for Google in July, Microsoft is scheduled to outsource more than 1,000 jobs a year to China. Company spokeswoman Stacy Drake stated “we are growing our work force there and will continue to do so; however, that growth has not and will not replace jobs here in Redmond.” That begs the question. Shifting jobs to India and China has cut down on expansion in Redmond’s backyard, such as, a new campus to be built in Issaquah, WA. That expansion was put on hold, and likely will not go forward.
Meanwhile, Bush had to cancel his meeting with Hu because of Katrina but that the two leaders agreed to talk in New York in mid-September. Hu and Bush agreed to meet when they attend ceremonies in New York for the 60th anniversary of the founding of the United Nations, the Chinese Foreign Ministry said. That event takes place Sept. 14-16.
UC Berkeley researchers found that, after adjusting for inflation, wages statewide fell during the first half of 2005. According to Dube, the UC Berkeley economist, this was the second year in a row that real wages fell in California.
"What that tells you is that the labor market is still soft,'' he said. The Berkeley labor economists noted that the state's economy has gotten a huge boost from housing. Construction and related fields such as real estate or lending, all related to the housing boom, accounted for half of all the net job growth in the state between 2002 and 2005.
"I think shopper spending could be a train wreck under the Christmas tree," said Burt Flickinger III, managing director for New York-based Strategic Resource Group. He estimated there will be $35 billion less for consumer spending purchases for the holiday season as shoppers pay more for fuel and consumer goods.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, said stores face their biggest challenge in four years, since the Sept. 11, 2001, terror attacks depressed Christmas sales. "If Katrina was simply a devastation of the area, we could have weathered it," said Niemira. "But because of these ripple effects, Katrina is having a nationwide impact. There were already red flags out there, but this just makes us feel more uncomfortable."
W.D. Crotty: Based on yesterday's closing price, Albertsons traded for 5.7 times EBITDA ( trailing annual earnings before interest, taxes, depreciation, and amortization)-to-EV( enterprise value). Kroger, Safeway, and Wal-Mart traded for 7.1, 7.6, and 9.8 times EBITDA-to-EV, respectively. This does not reflect the hidden value of the real estate in the 2,500 Albertson stores located in 37 states.
Andrew Lo writes of a possible hedge fund shake-out at
http://web.mit.edu/alo/www/papers/systemic2.pdf
Yesterday, I wrote that I have not sold one share of PetroKazakhstan stock. It might be well to remember that exactly one year ago Mittal hired Roeland Baan to run Mittal Steel Europe. That is but a small part of the story. Baan joined Mittal from SHV Holdings, where he spent 8 years as a member of the executive comittee of the company's ebergy division. Before that he spent 16 years with Shell, holding a variety of positions around the world. I feel confident that Baan is in a position to assess the true worth of PKZ to ONGC/Mittal. As such, I believe ONGC/Mittal will top CNCP's bid. Laying low does not equate to leaving the bidding contest.
From Cynical-C Blog: “I’m not meeting again with that goddamned bitch,” Bush screamed at aides who suggested he meet again with Cindy Sheehan, the war-protesting mother whose son died in Iraq. “She can go to hell as far as I’m concerned!”
“Who gives a flying fuck what the polls say,” he screamed at a recent strategy meeting. “I’m the President and I’ll do whatever I goddamned please. They don’t know shit.”
Bush’s behavior, according to prominent Washington psychiatrist, Dr. Justin Frank, author of “Bush on the Couch: Inside the Mind of the President,” is all too typical of an alcohol-abusing bully who is ruled by fear.
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