The economic quagmire was bound to catch up with George. He postponed it as best he could with tax cuts, suppressed rates, big biz legislation, and some fancy Texas BS; but our only true hope ended last November.
I was a few months early on forecast, but it's time has come.
Message 20313225
To: scottonstocks who wrote (7165) 7/15/2004 11:19:24 AM
From: scottonstocks Mark as Last Read | Respond to of 8146
FORD 15.13
DCX 44.34 and GM 44.0 still good shorts
A lot more room down with consumer tightening, political uncertainty, and coming recession
Message 20215654
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To: scottonstocks who wrote (7230) 8/4/2004 1:40:02 AM
From: scottonstocks Mark as Last Read | Respond to of 8146
JWN - and rest - consumer spending will slam these retailers to downside. Bush is walking on thin ice, as is market. A cold winter ahead on Wall Street and economy
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To: scottonstocks who wrote (6369) 8/5/2004 9:47:22 AM
From: scottonstocks Mark as Last Read | Respond to of 8146
DOW 10114 now - I would be HEAVILY short going towards the fall and year end. Domestic and international uncertainties alone provide ample opportunity for mkts to slide, and any event will make a great trigger.
High end retailers and auto mfg remain a favorite
Others tied to these are worth a look
OPTV 2.75 - a huge outperformer
To: scottonstocks who wrote (7240) 8/5/2004 4:21:10 PM
From: scottonstocks Mark as Last Read | Respond to of 8146
Should see more of these in coming months
JWN 40.72 -$2.22 right with the dow
Message 20327250
Associated Press
Dow Down 164, Largest 1-Day Drop of Year
08.05.2004, 04:07 PM
Another surge in oil prices sent stocks plummeting Thursday, with the Dow Jones industrial average shedding more than 160 points, the largest one-day drop of the year.
Investors reacted strongly to the oil hike, selling off rapidly as the afternoon progressed. A barrel of light crude closed at $44.41, up $1.58 cents, on the New York Mercantile Exchange, and traded as high as $44.50 per barrel earlier in the session.
Over the past few weeks, drops in stock prices have corresponded almost directly to rising oil prices, which have climbed on terrorism fears. Thursday's rise, attributed to Russian oil conglomerate Yukos' ongoing troubles with the government there, prompted heavy selling in the last hour of trading.
According to preliminary calculations, the Dow fell 164.37, or 1.6 percent, to 9,962.14.
Broader stock indicators also fell sharply. The Standard & Poor's 500 index dropped 17.91, or 1.6 percent, to 1,080.72, and the Nasdaq composite index was down 33.43, or 1.8 percent, at 1,821.63.
forbes.com
To: scottonstocks who wrote (7212) 8/5/2004 4:28:25 PM
From: scottonstocks Mark as Last Read | Respond to of 8146
Big 3 on continuing descent
All will be hard pressed for profits next year
F - 14.20
DCX 42.54
GM - the same?
Message 20313225
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To: Jon Scott who wrote () 8/5/2004 5:09:49 PM
From: scottonstocks Mark as Last Read | Respond to of 8146
The economic negatives greatly outweigh the positives going forward.
Even if Bush beats the slim to none odds, which I don't see occuring, he dug a big hole that won't get filled too quickly. Easy, cherry-picked profits for big business just isn't happening anymore. Bush has relaxed the rules, but the entire world has paid a significant long term price for the benefit of a few.
It completely bewilders me everytime I see a parking lot filled with Hummers, Excursions, Escalades etc. In the 70's, ecological awareness was THE focus. Now we've turned things 180 degrees. The often unrealized profits from overleveraged real estate is being used to help create a feeling of wealth and the prize is a quasi Mack truck delivering mom to her nail appoinment in a larger than life fashion.
Most sad is they're too busy yapping on their cell phone to signal a lane change, let alone learn that the entire world and its children pay for their 10 MPG chic indulgence.
A change of government and attitude must come asap.
It's interesting to see the growth of the "Anyone But Bush" coalition. Kerry isn't much, but anything beats a negative
I do think Edwards will bring exactly the fresh perspective this country needs
To: scottonstocks who wrote (7240) 8/6/2004 8:49:26 AM
From: scottonstocks Mark as Last Read | Respond to of 8146
Oil yesterday, employment today
DOW has no reason to stay this high. The artificially supported economy is in a perfect position to tailspin to sharp recession 1st or 2nd qtr 2005
Bush and his good old boy network politics must go asap
There's a lot of cleaning up to do
Message 19348250
Message 19370937
Reuters
Employment Growth Surprisingly Weak
Friday August 6, 8:33 am ET
WASHINGTON (Reuters) - U.S. employers added a paltry 32,000 workers to payrolls last month, the government said on Friday in a report far weaker than expected that will come as unwelcome news for President Bush ahead of the presidential election.
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The Labor Department also cut its tally of job growth for May and June by a combined 61,000.
The unemployment rate, however, fell to 5.5 percent from 5.6 percent in June as a separate government survey of households showed robust employment growth. The department cautioned that the household survey was a less reliable barometer of month-to-month changes in employment than its larger survey of businesses.
Wall Street economists polled last week had looked for a payroll gain of 228,000, although a weak employment reading from a service sector survey on Wednesday had some bracing for a weaker number. Still, the lackluster July figure was certain to surprise.
The Bush administration was likely to look on the bright side as the report showed 1.5 million jobs have been created in 11 straight months of hiring gains. However, Democratic White House hopeful John Kerry could accurately claim that the economy is still down 1.1 million jobs since Bush took office, despite the recent gains.
The report will also raise questions about how successfully the economy shook off a soft patch in June and may lead financial market participants to reassess the pace of rate rises expected over the coming months from the Federal Reserve.
Fed officials gather next Tuesday to plot interest rate strategy and are expected to add to a quarter-point interest-rate increase made in June.
To: Jon Scott who wrote () 8/6/2004 8:53:20 AM
From: scottonstocks Mark as Last Read | Respond to of 8146
Spending our way to disaster
The consumer debt bubble in the United States could make the stock bubble seem like nothing.
October 3, 2003: 10:32 AM EDT
By Justin Lahart, CNN/Money Senior Writer
NEW YORK (CNN/Money) - The American consumer has become deeply addicted to spending, running up ever higher levels of debt in order to live in a fashion that is beyond his means. And the world has become equally addicted to the consumer continuing to burn through cash.
It's a dangerous situation -- potentially a bubble that dwarfs even the U.S. asset bubble that burst in 2000 -- and it will be a challenge for policy-makers to keep it from ending badly.
The perseverance of consumer spending over the past several years is credited with keeping the economy afloat, but it didn't come without consequence. In order to keep on living in the manner they became accustomed to during the boom years, Americans went deeply into hock.
"If there's a bubble, it's in this four-letter word: Debt," said Merrill Lynch chief North American economist Dave Rosenberg. "The U.S. economy is just awash in it."
Indeed, consumer credit and mortgage debt are both a higher percentage of disposable income now than they've ever been before. Nor do these rises in debt levels appear justified by the rise in the value of people's homes -- household debt as a percentage of household assets (what you owe versus what you're worth) has also never been so high, according to the Federal Reserve.
How did this come to pass? We live in an economy that has become deeply dependent on the American consumer for growth. U.S. consumer spending accounts for around 70 percent of U.S. gross domestic product. So nobody wants to see the consumer falter, and they have been doing their darndest to make sure that doesn't happen.
The Federal Reserve has cut rates like never before, allowing mortgage rates to come down this year to their lowest recorded levels. Car companies have offered zero percent financing for two years now, and they've recently begun offering it on 2004 vehicles.
But rather than using such rate reductions as an opportunity to save money, consumers have, as a whole, used them as an opportunity to spend more.
"We're a what's-my-monthly-payment nation," said Northern Trust chief U.S. economist Paul Kasriel. "The idea is to have my monthly payments as high as I can take. If you cut interest rates, I'll get a bigger car."
Financial companies have got into the act, too, offering people ever-more efficient ways of running up debt. Hardly does a week go by without a new credit card offer coming in the mail.
Or consider credit cards like Wells Fargo's NowLine Visa Platinum, which allows you easy access to a home equity line of credit. You can use it, says Wells in its online promotion, to help pay "for everyday expenses, like gas, groceries, clothes, etc."
Eating your house was never so easy.
Codependency, anyone?
Other countries share in the deep commitment to keep U.S. consumers laying out their cash. Big exporters -- Japan and China in particular -- have strived to keep their currencies low against the dollar, allowing Americans, in effect, to buy more of their stuff. U.S. consumer spending accounts for around 20 percent of world gross domestic product.
But here is another situation where the United States is spending more than it makes. The current account deficit -- the gap in the United States' trade in goods and services with the rest of the world -- has risen to about 5 percent of the total economy. That's as high as it's ever been. The chart of the current account gap as a percentage of GDP, incidentally, looks almost exactly like a chart of consumer credit as a percentage of income.
So the world economy is leveraged to the U.S. consumer. And the U.S. consumer is leveraged to the hilt. There are now more registered cars on the road in the United States than there are licensed drivers. America's energy needs, per capita, are nearly twice that of Great Britain's. At some point the U.S. consumer's creditors -- which is to say the rest of the world -- may have second thoughts about how their money is being used. Kasriel compares it to a corporation that uses its stock and bond proceeds to throw big parties, rather than invest them in its future.
Clearly something has to give.
"Nobody can pinpoint when this process will come to an end," said Carlos Asilis, a portfolio manager with the hedge fund Vega Capital Management. "But it is very clear that it can't go on forever. Do you let this bubble grow, or do you do something about it?"
There are signs that U.S. policy-makers are at least partially trying to address the problem, pressing Japan, China and other Asian exporters to let their currencies strengthen against the dollar. This would, they believe, reduce consumer expenditures on imported goods and fuel export growth as well.
But it might not solve the problem of consumers who are continuing, in effect, to eat their seed corn. It would take a powerful disincentive, like a Fed rate hike, to get people to stop spending and start paying down debt and save more. But to do that would be to court the forces of recession.
"We have a Fed that wants a booming economy, but the only way the consumer can continue to fuel the economy is through continued debt accumulation," said Rosenberg. "I don't know if there's an easy way out."
Find this article at:
money.cnn.com |
