Federal Spending + Revenue
10% – decrease in federal budget deficit, August 06 – August 07
20% – increase in federal budget deficit, FY 06 – FY 07 (annualized)
27% – decrease in federal budget deficit, FY 04 – FY 07 (annualized)
Overall retail sales in August rose 0.3%. That was below July’s upwardly-revised growth rate of 0.5%. Consumer spending accounts for about 70% of all economic activity.
The Kaiser Family Foundation released its annual survey of health insurance costs and related items. This follows on the heels of a recent report by the U.S. Census Bureau on incomes, insurance and poverty rates.
– 84.2% – Americans with health insurance coverage in 2006.
– 86.0% – Americans with health insurance coverage in 1999.
– 59.7% – Americans with employer-bought private health coverage in 2006.
– 63.9% – Americans with employer-bought private health coverage in 1999.
– Employers on average pay 73% of the cash premium costs for health insurance coverage offered to insured families of four and they pay 85% of the premium costs for employees who are single. Meaning that workers on average are paying between 15% and 27% of the costs of premiums for their employer-sponsored health coverages.
– The current growth rate of the combined health coverage premium costs for employers and employees: (i) is lower than the growth rate of total incomes for all Americans, and (ii) is less than the growth rate of profits for American companies.
– The growth rate of the combined premium costs for employers and employees has slowed four consecutive years.
– For obvious reasons, the national liberal Democrat media’s reporting of these items was couched in the most negative, misleading, and biased terms practicable.
Apple of the Street’s Eyes
Apple sold its one millionth iPhone. Which raises an interesting question: When young liberal-bot students drive their parents’ Beamers and Benzes to shopping malls to plunk down several hundred dollars on iPhones do they complain about the economy on the way back to their 3,500 sq.-foot homes in the suburbs?
In any event, if you’re still reflexively buying Apple’s stock when it rises you need to sit down and then read — sentence-by-sentence — the seminal investment treatises of Benjamin Graham.
OPEC + Energy Day Traders
OPEC announced an increase in actual production as opposed merely to quotas. Meaning 500,000 additional net barrels of oil will be added to the market. That same day, however, oil prices rose. Some of you might have thought to yourselves: “Hey, wait a minute. If OPEC is raising actual production then prices should have dropped. How could prices have risen that same day? What gives?”
Well, over the short term the energy markets are driven by such things as: carry trades, leveraged call options, short covering and put option stop losses, momentum, and 200-day moving averages. Fundamentals take a back seat. C’est la vie.
— Leading private equity buyout firm, Carlyle Group, recently raised $10 billion, of which 1/3 is earmarked for real estate. The firm is considering further capitalization for potential buyouts of financial services companies. All of which makes sense. For as the Zoloft and Paxil brigades on CNBC continue foaming at the mouth, regarding the putative “credit crunch” and related items, the smart money out there will be looking for oversold and thus cheap buying opportunities in the real estate and lending sectors.
— Speaking of smart money and financial services companies, multi-billionaire investor Joseph Lewis disclosed a huge investment in fallen Wall Street icon Bear Stearns. Mr. Lewis purchased large chunks of Bear Stearns’ common stock in August. That’s when the Lithium brigades were selling in a panic over a couple of failed subprime hedge funds owned by that company.
Strange Bedfellows — NAFTA
Check out this roll call vote on a major amendment to a pending highway spending/infrastructure bill.
Sam Brownback and Barbara Boxer. Tom Coburn and Ted Kennedy. Bernie Sanders and Jeff Sessions. All voting together. James Inhofe and John Kerry too. Like peas in pods. That’s what happens when you combine a GOP administration’s desire fully to implement NAFTA and (gulp) Mexican long-haul trucks.
Long-term political observers will not find that vote too surprising, however. Exhibit A: Ralph Nader and Pat Buchanan joined at the hip in opposition to NAFTA back in 1993. Business politics in general, and free trade politics in particular, make for strange bedfellows. For reasons that should be quite obvious.