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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (12692)	2/6/2003 5:54:36 PM
From: crdesign	Read Replies (3) \| Respond to of 89467

Wanna see AlQueda being blown to bits by an AC-130? Follow the link. vampirebat.com Tim

To: Jim Willie CB who wrote (12692)	2/8/2003 5:17:20 PM
From: stockman_scott	Respond to of 89467

Comstock > More Evidence of Deteriorating Economy Evidence is continuing to accumulate that the 10-month-old so-called “soft spot” is continuing and that the anemic economy is actually deteriorating rather than recovering. In our view the key to this economy is the unrelenting pattern of corporations continuing to slash spending of all kinds including labor and capital expenditures. Even companies that are meeting or slightly exceeding earnings estimates are showing little if any revenue gains, and their ongoing cost cuts are badly hurting their suppliers and feeding back throughout the economy. The negative feedback is bound to hit consumer spending, and the indications are that it is beginning to do so. Although initial unemployment claims dropped 11,000 to 390,000 last week, the Challenger report showed 132,000 layoffs in January, compared to an average of 119,000 for all of 2002. The number of monthly layoff announcements for October, November and January were the highest monthly amounts of the past 12 months, indicating that claims are likely to rise again in the period ahead. Retail sales were sluggish in January while auto and light truck sales dipped 11% to 16.2 million units. Auto sales are already running at one million units over trend, indicating a lack of pent-up demand, and continued use of big rebates have become too commonplace to boost sales any further. Consumer confidence is still in the doldrums, and an unprecedented three years of declining household net worth is forcing consumers to increase savings and exercise caution on spending. Fourth quarter productivity fell 0.2% while unit labor costs soared 4.8%. This supports our previously stated view that productivity is highly correlated to growth and that productivity remains within its historical long-term range. The new number will make it more difficult to use strong productivity as reason to forecast a strong recovery. The outlook for capital expenditures remains spotty. Although December factory orders were up 0.4%, the key number to watch is orders for non-defense capital goods ex-aircraft, which was down 0.3% after a drop of 3% in the prior month. Technology is showing no signs of picking up. Cisco stated that the outlook was as challenging as it’s ever been, which is saying a lot considering what technology has come through in the past three years. Today, Dell COO Kevin Rollins stated that spending on technology would be soft this year. He said, “What we have felt all along is that much like 2002, 2003 will be a fairly difficult year due to the economy more than anything else…Once the economy rebounds, spending on information technology will not rise sharply or aggressively. When the war is resolved—however it is resolved—I don’t think you’re going to see a massive resurgence in IT spending." The poor economic outlook is already being reflected in first-half earnings estimates. According to First Call first quarter consensus estimates for earnings growth has dropped to 8.8% from 17.4% on October 1, while second quarter estimates are down to 8.3% from 16.4% on October 1. We expect these numbers to go far lower by the time results are reported. This is likely to be highly disappointing to a market looking for economic recovery for the third consecutive year. The S&P 500 recently violated its 870 support level and now seems to be breaking down from its recent consolidation. In our view, the index will eventually violate the October lows forcing an important investor capitulation. comstockfunds.com