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Mark Bern, CFA
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Mark Bern (formerly K202) intends to continue writing solo and has shed other work-related relationships that required anonymity. CPA since 1990 a CFA charter holder since 2000. He has a bachelors degree in Business Admin. with a concentration in Economics. His experience includes both private... More
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  • GM Sales, Up or Down? It depends.
    When I looked at my screen this morning I was amazed to see two apparently conflicting headlines for the same reported news.

    "GM vehicle sales up 10.7%; key brands surge 36%"

    "General Motors June sales drop 13 percent from May"

    Well, which one is right?  The answer, as ridiculous as it appears, is both.  GM sales did drop nearly 13 percent in June compared to May.  GM sales improved by 10.7 percent in June 2010 compared to June 2009.  And the remaining brands, Chevrolet, Buick, GMC and Cadillac, rose 36 percent compared to sales of the same brands in June 2009.  But here's the catch: In 2009 GM was still selling Hummers, Saturns and Pontiacs.  Loyal GM owners of those discontinued brands are buying one of the remaining brands instead so this article is comparing apples to oranges when it subtracts the discontinued brands from year ago sales.  It's a neat trick if you can get people to believe; almost like magic.  But let's remember that sales in June of 2009 were down over 30 percent compared to June of 2008 and GM was filing for bankruptcy in June of 2009.  So my question is: what, only up 10.7% over the worst year in decades?

    The key for me is that the sales levels in May have turned out to be unsustainable.  It may be that the effects of the Cash for Clunkers program are finally starting to settle in, but I suspect that the real problem is employment.  Those who have jobs don't necessarily feel secure and those who are unemployed can't find a job.  The number of folks willing to work, wanting to work has not dropped.  In fact it has risen, as it does every year because of immigration and younger people finishing schooling and entering the job market.  But the government keeps telling us that the work force is shrinking while it is, in fact, growing.  They do that to keep the official unemployment rate from rising and scaring businesses into retrenching for even worse time ahead.  Unfortunately, the scheme isn't working and sales are dropping anyway. 

    Consumers are felling poorer each month as their home value continues to sink and their 401K resumes it drop.  On top of that they feel less secure about their future employment prospects.  In this environment consumers will consume less, not more.  And sales headlines that try to spread optimistic slants on bad reports are no longer going to keep consumers spending. 

    Look for further sales deterioration in housing and autos as well as upscale and mid-range retail in the coming months.  Discounters may fare better as more and more consumers search for value.

    Disclosure: SRS, TWM, short SPY
    Tags: SPY, F, RTH, IYR
    Jul 01 1:08 PM | Link | Comment!
  • Obama Does CYA
    I find it interesting that the Democratic Party is blasting the high court for doing what they want them to do.  The current rules allow PACs (which the Democrats have used expertly) to bring in donations from corporations.  Since they are already getting all the money they need (and then some) what is all the fuss about?  Perhaps the Democratic Party has been more efficient at using the PACs and this might level the playing field?  I suspect tha this is just more grandstanding to look tough in public and try to improve the polls.
    Common Cause Public Campaign President Nick Nyhard, right, accompanied by Common AP – Common Cause Public Campaign President Nick Nyhard, right, accompanied by Common Cause President Bob …
    By BEN FELLER, Associated Press Writer Ben Feller, Associated Press Writer – 1 hr 18 mins ago

    WASHINGTON – President Barack Obama on Saturday unloaded on a divided Supreme Court for allowing more corporate influence over elections. The White House and Democratic lawmakers scrambled to figure out how to blunt the impact of the ruling.

    Obama used his radio and Internet address as a platform to expand on criticism Thursday's decision, which drastically alters the rules of campaign finance going into November's congressional elections. The 5-4 decision threw out parts of a law that said companies and unions can be prohibited from using their own money to produce and run campaign ads that promote or target particular candidates by name.

    The justices also struck down a measure that had barred union- and corporate-paid issue ads in the pivotal, closing days of election campaigns.

    "I can't think of anything more devastating to the public interest," Obama said. "The last thing we need to do is hand more influence to the lobbyists in Washington, or more power to the special interests to tip the outcome of the elections."

    Obama promised a forceful and bipartisan response with Congress, but it is unclear how far any legislation can go in trying to undo the court's action.

    Negotiations are under way. Norm Eisen, special counsel to Obama for ethics and government reform, met Friday with staff members for Sen. Chuck Schumer, D-N.Y., and Rep. Chris Van Hollen, D-Md., the two lawmakers leading the effort for a legislative response.

    Among the ideas under consideration are tougher disclosure requirements for corporations that sponsor ad campaigns; a requirement that any political ads by publicly traded companies be approved by shareholders; and a ban on campaign spending by companies that have received federal bailout money, according to an official familiar with the discussions who spoke on condition of anonymity because no plans have been agreed upon.

    Obama is expected to address the broader issue in his State of the Union address on Wednesday.

    The court's decision wrestled with the matter of campaign spending as free speech. The majority opinion by Justice Anthony Kennedy made a vigorous argument for the right of the public to be exposed to a multitude of ideas and against the ability of government to limit political speech.

    Yet the president is among those who see it as blowing open the doors to big-business influence over democracy. He predicted that anyone who runs for election and tries to take on powerful special interests will now be more likely to be "under assault come election time."

    Obama also said the decision will make it harder to enact financial, tax, health care and energy changes.


    Associated Press writer Darlene Superville contributed to this story.

    Jan 23 9:04 PM | Link | Comment!
  • Weekly Unemployment Report Week Ending Nov 13

    WASHINGTON (Reuters) – The number of U.S. workers filing new applications for jobless insurance was unchanged last week, according to government data on Thursday that showed the labor market was slowly healing.

    Initial claims for state unemployment benefits were flat at a seasonally adjusted 505,000 in the week ended November 14, the Labor Department said. However, the four-week moving average of claims dropped to its lowest in almost a year.

    New applications for aid have been grinding lower in recent weeks, indicating a slowdown in the pace of layoffs. Analysts polled by Reuters had forecast new claims edging up to 505,000 last week from a previously reported 502,000.

    "It is headed in the right direction. They were a little high, but the continuing claims coming down and the initial claims staying down is additional evidence that the labor market is stabilizing," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

    U.S. stock index futures held their losses after the data, while prices for government bonds nudged higher.

    New jobless claims are being watched for signs of when job losses might bottom. Applications have dropped significantly from March's lofty levels, but remain above the 400,000 mark that analysts say would signal payrolls growth.

    Analysts noted that last week's jobless claims data, which covers the survey period for the government's November non-farm payrolls report due on December 4, suggested job losses would be smaller that month than in October, when payrolls fell 190,000.

    The U.S. economy resumed growth in the last quarter, driven largely by government stimulus, and there are fears that labor market distress could hamper the recovery.

    The four-week moving average for new claims fell 6,500 to 514,000 last week, the lowest since November last year and declining for the 11th straight week.

    The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.

    The number of workers still collecting benefits after an initial week of aid dropped 39,000 to 5.61 million in the week ended November 7, the lowest since March. This was in line with market expectations for 5.60 million.

    So-called continuing claims have fallen from a peak of 6.9 million in June and the drop is likely the combination of fewer new applications for unemployment aid and many jobless workers exhausting their benefits.

    The number of people on extended benefit programs rose 17,170 to 540,665 in the week ended October 31, according to the latest available data.

    The four-week moving average of continuing claims declined 83,500 to 5.71 million. The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was steady at 4.3 percent in the week ended November 7.

    (Reporting by Lucia Mutikani; Additional reporting by Chris Reese in New York, Editing by Andrea Ricci)

    Nov 19 9:28 AM | Link | 1 Comment
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