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April 22, 2008
Signs Spell Trouble
Posted by Jack
The City of Chico sales tax revenues began to show serious signs of decline for the first time in 12 years during the early part of 2007. Since then the decline has continued as the city seeks ways to ratchet down the projected deficit. In mid-2007 the City was looking at a $56 million shortfall, now despite all the tweeking they could come up with the city still needs to shave another 6 million over the next 2-3 years to balance the budget. Assistant City Manager Dennis Beardsley says making things worse, sales tax receipts right now are flat or down which is almost unheard of in Chico.
"..sales tax receipts right now are flat or down which is almost unheard of in Chico."
And on the national front this just in from MarketReport.com: Ford Motor Co. will likely point to further strides in its wrenching overhaul when it posts first-quarter results Thursday, but the severe downturn in the U.S. car market and expectations for when that will change will also take center stage.
Ford has lost more than $15 billion in the past two years, including $2.8 billion in the fourth quarter of 2007 as the reality of the slowing U.S. economy began to take hold.
New car market rapidly drying up - Home sales down 19.3% from last year!!!
And now this from TheStreet.com: We rate GENERAL MOTORS CORP. (GM) a SELL. Our rating is based on the company’s declining revenue, deteriorating earnings and diminishing margins.
Deteriorating earnings. The company reported a net loss of $722.00 million during the quarter under review compared to net income of $950.00 million a year ago.
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Diminishing margins and falling returns. During the quarter, gross profit margin slipped 889 basis points to
11.34% from 20.23%, due to falling revenues. Operating margin decreased to a negative 2.69% from a positive
of 8.22%. Furthermore, the return on assets remained negative at 26.02% from a year ago.
GM stock is down 31% over the last 12 months. GM, like Ford, is banking on sales to emerging markets to improve their bottom line.
Market update - At Session Lows at Midday - 12:05p ET April 22, 2008 (Briefing.com)
The major indices have spent the entirety of Tuesday's session in negative territory, and are trading with substantial losses. Traders have been disappointed with earnings misses by a few notable companies. At the same time, crude oil continues its rally as prices hit a new all-time high.
March existing home sales fell 2.0% to an annualized rate of 4.93 million from the prior reading of 5.03 million. This was slightly better than the expected reading of 4.92 million. Compared to last year, sales are down 19.3%. Prices have fallen 7.7% versus last year. Housing remains in a deep slump, but the rate of decline has slowed in recent months.
Euro UP 30% over the last two years against US dollar
. Weak dollar V. Euro: At the stock market session highs today (4/22/08), one euro bought as much as $1.6018, which is the most since the currency was introduced in 1999. The euro has since retreated a tad to just under $1.60. The official currency of the European Union is now up roughly 18% compared to last year, and 30% over the last two years.Authors note:
While the left or the right may try to exploit these bad economic numbers for their own political gain, they are nontheless still hard numbers that we must deal with as our current economic reality.
The skyrocketing fuel prices are behind much of the economic slow down and there is little being done to abait this situation. Diesel is the life blood of the transportation industry and you can't hike the price of diesel up 29% in one year without affecting the cost of goods transported by rail and road. Why a 29% increase? Has the world's available oil supply dropped significantly? No. Have emerging nations increased their demand of oil by 29%? No. Has production been damaged? No. So if it is not purely a supply v demand effect that has spiked fuel prices, what could it be?
Oil is high because the oil cartel wants it high, don't you get it?
This huge oil monopoly is constantly pushing it right up to the edge of what you consumers will tolerate. They do this over and over because they can.
Get a clue, you have no watch dogs in government.
Last year's spike in fuel prices was a mere test run for this year's outright theivery. They knew from past experience they could price gouge consumers with impunity and now they are pushing it even further with every passing day. They are counting on believers in pure capitalism to defend their greed as just normal market forces that go up and go down like many other commodities...nothing to worry about, they say. But, there is everything to worry about! Today's high fuel prices are anything but a result of normal market forces and we're empowering the enemy that is robbing us by tolerating it and not demanding a federal investigation into price fixing and other monopolistic practices by the Big 5 and their friends.
You the consumer are being victimized by a vast oil monopoly that is price gouging our giant economy into a recession. These guys don't even bother to break out the fake earning charts and quarterly reports with all their hidden excess profits anymore, they just can't hide that much money anymore and besides they don't need to, because they got you and they know it.
If you made it a law that the CEO's and the BOD's would only make money based on volume of sales rather than a profit margin per unit this whole situation would change overnight.
Posted by Post Scripts at April 22, 2008 09:08 AM