THE ENTERPRISE--GET THE FACTS, THEN GET INVOLVED
GRIN FOR THE WEEK:
For decades pundits have been saying that the New Orleans Saints were so bad at playing football that hell would freeze over before the Saints would ever win The Super Bowl. On Sunday, February 7, 2010 The Saints won the Super Bowl. On that same Sunday Washington D.C. was paralyzed under several feet of snow and the Government was shut down. This, then, firmly establishes the exact geographical position of hell.
I WONDER WHY...?
The media that can identify what club Tiger Woods wife Elin chased him with, down to which wedge it was, and relatively quickly identify all of his transgressions/sex partners, complete with text messages, voicemail, photos of the women, and their life histories. That same media cannot find Barack Obama's "true" birth certificate, any of his contacts or papers while at Harvard, anyone who knew him while at Columbia or who paid for his education, and also cannot locate a copy of Michelle Obama's thesis. Doesn't this seem odd? (Reminds me a little of the old movie "The Manchurian Candidate".)
THE PRESIDENT'S GOT GAME
At halftime of the Final Four Semi-Final game, President Obama play and talked through a game of HORSE (renamed POTUS) with CBS color commentator Clark Kellogg, a former Ohio State All-American. Obama "won" the game by sinking a series of 3 point shots, after Kellogg opened an early lead and seemed to "back off" on shot selection. Nevertheless, Obama showed a smooth stroke from the 3 point line, making a number of shots in a row. Now if only he could manage the country as well.
IS THE CHICAGO POLITICAL PROCESS SPREADING TO OHIO?
Ohio Gov. Ted Strickland failed to submit the appointments of five cabinet directors to the state Senate for approval. The Gov's office claims it was "just an oversight." Seems like a pretty large oversight--five appointees. Could be that the State Senate is Republican controlled that helped the Gov. overlook this legal requirement. Sounds like the Obama-Chicago-Politics process is making its way to other places.
FROM KIPLINGER--IMPORTANT FACTS
Businesses are sitting on a cash trove…$2.8 trillion for non-financial firms. That’s 15.7% of their total financial assets held in commercial paper, bank deposits and other very liquid investments…about $39 billion in “excess” cash, over and above the 20-year average cash percentage. With the exception of a brief span after the corporate governance scandals of the mid-2000s, it’s the highest cash share in 23 years, and the highest ever, if financial companies are included in the tally.
The stash is dry powder that’ll help fuel economic gains in coming months…a resource businesses can readily tap to buy new equipment and to hire more workers. And it’s a big stash…enough to add one percentage point to the pace of GDP growth
in any given quarter or to put about 680,000 workers on the payroll for a year. It’s growing business confidence that will help release it. In recent weeks, financial indicators of risk aversion…equity prices, volatility and bond credit spreads, for example…are all looking more positive, and business sentiments are on the mend.
FROM THE INSTITUTE OF SUPPLY MANAGEMENT DATA
Inventory rebuilding can continue a bit longer. The ratio of inventory to shipments which reached 1.45 during the depths of the recession is back to 1.29. It was down to 1.15 during the boom period. That means that the inventory cutting should be about all over. The question is what consumer spending looks like. It has been surprisingly good, and the will fuel confidence to add inventory. These factors bode well for a modestly continued recovery.
HIRING IS PICKING UP TOO
Temp hiring was up, as mentioned in a prior edition of THE ENTERPRISE. Anecdotally, some of our sources also say there is an uptick in hiring, both from the recruiting side and from the company job-fair side. After such a severe downturn, companies will be slow to rehire. The recent month's jobs data was finally positive--jobs added, not lost. That could be the turning point. Now the key is to watch the rate at which jobs are added month after month. Caution: the 2010 Census is adding about 750 million jobs--TEMPORARILY--then they will go away. That could create deceptively positive statistics.
PUBLIC PENSIONS ARE DEEP IN DEBT
The accounting methods for public pension are deceptive, requiring only that governments show what they contributed, not what the "deficit" or Unfunded portion amounts to. This fools the citizens into thinking that the pension plans are OK. They are not OK. Most state pension plans are massively underfunded AND have been using an unrealistically high 8% for their assumed rate of gain on investments. It has not been that high for a long time, and prospects for it getting there anytime soon are not good. By using an inflated earning rate, it hides that the plans are really far worse off that imagined. To use just one example, New Jersey's fund is $46 billion underfunded, and if it were using a more realistic earnings assumption, that would jump to more like $55-60 billion underfunded. And that is just one state.
ANY RECOVERY WILL BE WELCOME
Let's end this edition short--and be thankful that some kind of recovery, however irregular, is starting to happen. There is no telling how long it will last. To recover the lost jobs will take years. To get unemployment down even close to where it was will also take years. States are in bad shape. The Federal Government, if it were a company, is technically almost insolvent and would be facing credit defaults or bankruptcy. But then the US Government owns the printing presses that print money. Printing money to cover irresponsible spending is a fools solution. All it does is devalue the money that is already out there, and set up a super-inflation scenario in the future.
THE HEALTH CARE BILL PASSING ADDS TO THE DEFICIT
The issue in coming elections should not be about repealing the health care bill. That is almost impossible to do as long as Obama is in the White House. The issue is the growing role of government, taking over more and more of the lives of American people and taxing their hard earned wages to pay for services that they have little or not say about. Those who want to be part of the new government controlled welfare state should stand by Obama and the liberal Democrats in Congress. Those who believe America is a land of freedom, free enterprise and the rights of people to earn and keep wealth.
EVERYONE WILL BE ABLE TO CHOOSE WHAT KIND OF AMERICA THEY WANT, STARTING NOV. 2, 2010
Please pay close attention and be very proactive--reach out to everyone you can--to explain the choices they are making with their votes. Primaries start in a month. They are no longer trivial. If you want to be part of "We the people" who determine America's future, then do your homework and get involved. Support the candidates of your choice and tell others who you think are the best ones to vote for.
Happy Easter weekend to all,
John
-----------------------------------------------------------
"Never doubt that a small group of thoughtful, committed citizens can change the world: indeed, it's the only thing that ever has." Margaret Mead
-----------------------------------------------------------
John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959 http://www.mariotti.net http://mariotti.blogs.com/my_weblog/
GRIN FOR THE WEEK:
For decades pundits have been saying that the New Orleans Saints were so bad at playing football that hell would freeze over before the Saints would ever win The Super Bowl. On Sunday, February 7, 2010 The Saints won the Super Bowl. On that same Sunday Washington D.C. was paralyzed under several feet of snow and the Government was shut down. This, then, firmly establishes the exact geographical position of hell.
I WONDER WHY...?
The media that can identify what club Tiger Woods wife Elin chased him with, down to which wedge it was, and relatively quickly identify all of his transgressions/sex partners, complete with text messages, voicemail, photos of the women, and their life histories. That same media cannot find Barack Obama's "true" birth certificate, any of his contacts or papers while at Harvard, anyone who knew him while at Columbia or who paid for his education, and also cannot locate a copy of Michelle Obama's thesis. Doesn't this seem odd? (Reminds me a little of the old movie "The Manchurian Candidate".)
THE PRESIDENT'S GOT GAME
At halftime of the Final Four Semi-Final game, President Obama play and talked through a game of HORSE (renamed POTUS) with CBS color commentator Clark Kellogg, a former Ohio State All-American. Obama "won" the game by sinking a series of 3 point shots, after Kellogg opened an early lead and seemed to "back off" on shot selection. Nevertheless, Obama showed a smooth stroke from the 3 point line, making a number of shots in a row. Now if only he could manage the country as well.
IS THE CHICAGO POLITICAL PROCESS SPREADING TO OHIO?
Ohio Gov. Ted Strickland failed to submit the appointments of five cabinet directors to the state Senate for approval. The Gov's office claims it was "just an oversight." Seems like a pretty large oversight--five appointees. Could be that the State Senate is Republican controlled that helped the Gov. overlook this legal requirement. Sounds like the Obama-Chicago-Politics process is making its way to other places.
FROM KIPLINGER--IMPORTANT FACTS
Businesses are sitting on a cash trove…$2.8 trillion for non-financial firms. That’s 15.7% of their total financial assets held in commercial paper, bank deposits and other very liquid investments…about $39 billion in “excess” cash, over and above the 20-year average cash percentage. With the exception of a brief span after the corporate governance scandals of the mid-2000s, it’s the highest cash share in 23 years, and the highest ever, if financial companies are included in the tally.
The stash is dry powder that’ll help fuel economic gains in coming months…a resource businesses can readily tap to buy new equipment and to hire more workers. And it’s a big stash…enough to add one percentage point to the pace of GDP growth
in any given quarter or to put about 680,000 workers on the payroll for a year. It’s growing business confidence that will help release it. In recent weeks, financial indicators of risk aversion…equity prices, volatility and bond credit spreads, for example…are all looking more positive, and business sentiments are on the mend.
FROM THE INSTITUTE OF SUPPLY MANAGEMENT DATA
Inventory rebuilding can continue a bit longer. The ratio of inventory to shipments which reached 1.45 during the depths of the recession is back to 1.29. It was down to 1.15 during the boom period. That means that the inventory cutting should be about all over. The question is what consumer spending looks like. It has been surprisingly good, and the will fuel confidence to add inventory. These factors bode well for a modestly continued recovery.
HIRING IS PICKING UP TOO
Temp hiring was up, as mentioned in a prior edition of THE ENTERPRISE. Anecdotally, some of our sources also say there is an uptick in hiring, both from the recruiting side and from the company job-fair side. After such a severe downturn, companies will be slow to rehire. The recent month's jobs data was finally positive--jobs added, not lost. That could be the turning point. Now the key is to watch the rate at which jobs are added month after month. Caution: the 2010 Census is adding about 750 million jobs--TEMPORARILY--then they will go away. That could create deceptively positive statistics.
PUBLIC PENSIONS ARE DEEP IN DEBT
The accounting methods for public pension are deceptive, requiring only that governments show what they contributed, not what the "deficit" or Unfunded portion amounts to. This fools the citizens into thinking that the pension plans are OK. They are not OK. Most state pension plans are massively underfunded AND have been using an unrealistically high 8% for their assumed rate of gain on investments. It has not been that high for a long time, and prospects for it getting there anytime soon are not good. By using an inflated earning rate, it hides that the plans are really far worse off that imagined. To use just one example, New Jersey's fund is $46 billion underfunded, and if it were using a more realistic earnings assumption, that would jump to more like $55-60 billion underfunded. And that is just one state.
ANY RECOVERY WILL BE WELCOME
Let's end this edition short--and be thankful that some kind of recovery, however irregular, is starting to happen. There is no telling how long it will last. To recover the lost jobs will take years. To get unemployment down even close to where it was will also take years. States are in bad shape. The Federal Government, if it were a company, is technically almost insolvent and would be facing credit defaults or bankruptcy. But then the US Government owns the printing presses that print money. Printing money to cover irresponsible spending is a fools solution. All it does is devalue the money that is already out there, and set up a super-inflation scenario in the future.
THE HEALTH CARE BILL PASSING ADDS TO THE DEFICIT
The issue in coming elections should not be about repealing the health care bill. That is almost impossible to do as long as Obama is in the White House. The issue is the growing role of government, taking over more and more of the lives of American people and taxing their hard earned wages to pay for services that they have little or not say about. Those who want to be part of the new government controlled welfare state should stand by Obama and the liberal Democrats in Congress. Those who believe America is a land of freedom, free enterprise and the rights of people to earn and keep wealth.
EVERYONE WILL BE ABLE TO CHOOSE WHAT KIND OF AMERICA THEY WANT, STARTING NOV. 2, 2010
Please pay close attention and be very proactive--reach out to everyone you can--to explain the choices they are making with their votes. Primaries start in a month. They are no longer trivial. If you want to be part of "We the people" who determine America's future, then do your homework and get involved. Support the candidates of your choice and tell others who you think are the best ones to vote for.
Happy Easter weekend to all,
John
-----------------------------------------------------------
"Never doubt that a small group of thoughtful, committed citizens can change the world: indeed, it's the only thing that ever has." Margaret Mead
-----------------------------------------------------------
John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959 http://www.mariotti.net http://mariotti.blogs.com/my_weblog/
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