Tag Archives: Stock Markets

When We Speak, Wall Street Listens.

One of the great things about hosting a blog at WordPress.com is the various tools and statistics they provide (thanks, Matt). You can see how much traffic your posts attract, how your visitors are finding your blog, what search terms people are using to find you (but sadly, not which search engine they used), and what hyperlinks in your posts they click on.

We were quite surprised this morning, when we noticed that nasdaq.com was sending traffic our way because of this article we posted yesterday about the U.S. economy. We had mentioned that New York and New Jersey utilities, including Consolidated Edison, had recently gotten steep rate increases approved by regulators, some as much as 25% and 50%.

Within a few hours, visitors to Nasdaq who looked up Consolidated Edison (NYSE: ED), were seeing a link to our blog in the “Comments From The Blogs” section on nasdaq.com. This is yet another example of how blogging has really gained legitimacy, and how mainstream media and even Wall Street have taken notice of what is being discussed by bloggers. To be sure, it is a bit of a trip, realizing that almost anyone with a computer and Internet access can have their voice heard by the world. To us, that’s perhaps the greatest thing about this experiment they call the Internet. It transcends borders (although some regimes try to surpress it), it makes the world a very small place, and it gives you access to views and opinions you would otherwise never hear. How great is that?

Now that Routing By Rumor is (almost) a household name, we want to let the New York Stock Exchange know that we are available, should Dick Grasso’s old job still be open. However, in light of the firestorm that his $140 million retirement package caused, we want to go on record as saying that we will not accept a deferred compensation package of more than $75 million. We think that even Eliot Spitzer, the former New York State Attorney General turned New York Governor (and no friend of Dick Grasso’s), who’s career crashed and burned in a sex scandal, would approve of that.

– Routing By Rumor

Leave a comment

Filed under Blogging, Business, Employment, Energy, Energy costs, Journalism, Money, News, Routing by Rumor, Stock Markets, The Economy, Wordpress

March 17, 2008 – A Gathering Storm On Wall Street

The stunning collapse of investment banking firm Bear Stearns over the weekend, and it’s fire-sale purchase for pennies on the dollar by JP Morgan Chase has is just the latest bad news rattling investors’ nerves.

Oil, which crossed the $100 / barrel mark less than a month ago, hit another record high of almost $112 / barrel on world markets today. Gasoline prices have followed suit, hitting new highs on a daily basis, with no end in sight. Rising fuel prices prompted United Airlines to raise round trip fares as much as $50 last week.

The Federal Reserve enacted another emergency rate cut over the weekend, with yet another cut of up to 100 basis points expected later this week.

The U.S. dollar continues to weaken, making foreign goods more and more expensive for Americans.

Almost every day, you hear of another major retailer reporting dismal sales figures.

Saying that the U.S. real estate market is in a slump is like saying that the Titanic sprung a minor leak.

The Dow finished last week below 12,000. Overseas markets have dropped sharply today, down between 4% and 5%. Fasten your seat belt when the U.S. markets open today.

Will today come to be known as the St. Patrick’s Day Massacre on Wall Street, or will it simply be another roller coaster ride for investors?

More and more lately, it seems that “no news is good news”.

And yet the Bush administration still can’t bring itself to  accept the fact that the U.S. economy is in a recession.

– RoutingByRumor

Leave a comment

Filed under Business, China, Consumerism, Employment, Energy, Energy costs, Jobs, Labor, Money, News, Politics, Retailers, Routing by Rumor, Shopping, Stock Markets, The Economy, Your Money

Stimulus, Schmimulus ! Why The U.S. Economic Stimulus Plan Won’t Have Much Effect

They are saying that the President’s economic stimulus package might be agreed upon today. Woo Hoo. Happy days are here again.

But wait a minute… I can still hear that “giant sucking sound”,  and it’s getting louder (oh, how I wish I could have found a clip on youtube of Ross Perot coining that wonderful phrase). What will the U.S. economic stimulus plan actually accomplish? Will it lower the U.S. trade deficit or increase it? Will it lower the unemployment rate? Will it have any effect on the crumbling real estate market? We believe that the proposed U.S. economic stimulus plan will not work. It is an attempt at a quick fix. It is an ill-conceived band-aid approach to what ails the U.S. economy, proposed by an administration that does not seem to grasp the root causes responsible for the American economy being in deep, deep trouble.

What the United States needs now is something along the lines of the Works Progress Administration (WPA), which put Americans to work and helped pull the country out of the Great Depression. The WPA existed between 1935 and 1943. A chicken in every pot, and two hybrid (or electric) cars in every garage wouldn’t be a bad idea either. (We’ve copyrighted that new twist on an old campaign phrase, so if Rudy, Hillary, Barack or John want to talk, you know how to reach us.) It’s quite likely that many of the government buildings and infrastructure projects in the American city or town where you live today were constructed by the WPA during that period. The WPA was one of President Franklin D. Roosevelt‘s New Deal programs.

Taking the money the U.S. government is proposing to distribute as tax rebates, and putting it into a massive infrastructure improvement program would have several benefits, both immediate and long-lasting. It would…

– Provide long-term employment for millions of Americans

– Stimulate spending by reducing the unemployment rate, and giving the currently-employed higher incomes

– Repair or replace our crumbling infrastructure, particularly bridges

– Provide an infrastructure that will facilitate future economic growth

– Keep the money in America rather than giving the recipients of the rebate checks the ability to buy even more imported goods, a major reason we’re in this mess to begin with

Let’s say, for argument’s sake, that every taxpayer in the United States gets a check for $1,000 (although it looks like many, if not most Americans will receive far less). Let’s say that Americans will spend every one of those checks rather than putting the money in the bank. Where will that money go?

If you’re about to loose your home to foreclosure, chances are good that that rebate check wouldn’t even allow you to make a single mortgage payment. Even if it does, that’s just postponing the inevitable for a few more weeks.

Perhaps you will take that rebate check and go on a shopping spree at Wal-Mart, K-Mart or Target. Wal-Mart is already America’s largest retailer and largest employer, but bigger is always better. If Wal-Mart grows, that means more low wage jobs for Americans. It means more Americans with little or no healthcare coverage. It means paving over more open land for new parking lots and big-box stores. It means more tough times for the few American manufacturers left, who are already being squeezed by the way Wal-Mart deals with their vendors.

About the only place you can spend that rebate check where the majority of the products are made in USA is at the grocery store. Unfortunately, for most Americans, eating is not a discretionary activity, and the amount of money you spend at the grocery checkout is unlikely to be influenced to any measurable extent by your rebate check.

Ben Bernanke will probably tell you that buying goods is exactly what you should do with your new found windfall. But wait a minute. As I’ve pointed out in this blog, and what you already know, unless you’ve been in a coma for the past few years, is that the vast majority of consumer goods you’ll find on retailer’s shelves are imported, overwhelmingly from China. In fact, we think that China will be the real winner if Americans go on a shopping spree. If you doubt this, just wait a few months and look at how our trade deficit with China increases as a result of this plan. Go to the mall and try to find clothing, shoes, toys, hardware or housewares made in USA. You won’t.

How is buying foreign goods supposed to help the U.S. economy? The U.S. national debt is being increased substantially by the stimulus plan in the first place. Buying foreign goods will only increase the trade deficit. Few American jobs will be created by this plan. That’s because we manufacture few products here any more, with the notable exception of food products, and even those are increasingly being imported.

With the cost of heating your home and filling your gas tank becoming an unaffordable luxury for many Americans, perhaps all of us should use our rebate checks to buy fuel oil or gasoline. The oil producing countries would love that more than oil itself. The American oil companies would support that too. Despite the fact that the oil companies have been raking in record profits, you can never be too rich, or too thin. On second thought, I think we will just cash our rebate check and ask the teller to give it to us in one dollar bills only. Then we’ll take the cash home, and use it as kindling in our fireplace. That’s one way to stay warm this winter, and it should reduce our heating bill slightly. Is it illegal to burn money?

About the smartest use we think you could put that rebate check to would be as a down payment on a hybrid or other low-emission or zero-emission vehicle. That would reduce America’s dependency on foreign oil, while helping the environment at the same time. The only problem is that very few low-emission vehicles, and almost no zero-emission vehicles are being manufactured today. And chances are good that your next car will be a foreign make that might not even be assembled in America anyway. So much for stimulating employment.

The biggest reason that the economic stimulus plan will not have any significant or long-lasting effect on the U.S. economy, is that it does nothing to address the two underlying causes of our economic problems; loss of jobs (particularly loss of good paying jobs) and the U.S. trade deficit. Until those issues are addressed, the administration can throw all the money they want at the problem, but it won’t go away. The deepening economic recession will turn into a depression, as sure as Winter will be followed by Spring.

I just came across a posting on the AFL-CIO’s website outlining their views regarding what a U.S. economic stimulus plan should include. Unfortunately, it looks like a couple of their suggestions which were originally announced by the President as being part of the package, have been eliminated in the final draft. Although I have never belonged to a labor union, I was struck by how many of their ideas match my thinking on the subject.

Maybe those rebate checks should come with the stipulation that they are not to be spent on food, imported goods or foreign oil, gas-guzzling vehicles, and may not be burned.

– RoutingByRumor

Leave a comment

Filed under Automobile Manufacturers, Business, Cars, China, Consumerism, Employment, Energy Conservation, Environment, Jobs, Labor, Money, Politics, Retail, Retailers, Shopping, Stock Markets, The Economy, Walmart, Your Money

Look Out When The Stock Markets Reopen Tomorrow !

Today is a national holiday (Martin Luther King Day) in the United States, and the stock markets are closed. Markets around the world have been tanking today because of the deepening U.S. recession.  If you’ll excuse the expression, the economy is “going to the dogs”.

So, look out tomorrow when the U.S markets reopen. Will tomorrow come to be known as “Black Tuesday” ? Buckle your seat belts, and don’t say we didn’t warn you !

I’ve been blogging lately about the fact that the U.S. economy is in serious trouble. Read all about it, here !

– RoutingByRumor

Leave a comment

Filed under Business, China, Employment, Jobs, Money, News, Personal, Politics, Retail, Shopping, Stock Markets, The Economy, War, Your Money