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Russ Henke
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Author: |
Russ Henke |
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3/2/2007 6:15 AM |
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Thoughts of interest to COFES and COFES attendees |
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Jobs and Trade Deficits |
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By Russ Henke on
10/9/2007 4:44 PM
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Most economic writers hailed the monthly unemployment report from the Labor Department last Friday October 5, 2007, as evidence that a US recession is now less likely. Net jobs created in September 2007 were a “healthy” 110,000, they gushed. The same writers also seemed pleased that the originally reported loss of 4000 jobs in August, was restated as a net gain for August of 89,000. The stock markets dutifully rose.
However, few writers pointed out the troubling facts behind those numbers. First, as has been mentioned in this blog space before, figures like 100,000 new jobs in a month are far below the levels needed just to take care of the number of people entering the US job market every month from sheer population growth. Indeed, the unemployment “rate” rose in September to 4.7%, the highest in just over a year.
Second, one has to look at exactly what sectors of the US economy are producing the gains. In September, the increases came from services th ...
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Autumnal Equinox – and All Is Not Well |
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By Russ Henke on
9/23/2007 5:26 AM
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Did your personal net worth increase by more than $300 million in the last 12 months ending August 31, 2007? No? Then you’re probably no longer eligible for the Forbes list of the 400 richest Americans! Indeed, if your net worth is not greater than $1.3 billion, forget it! The collective net worth of America’s 400 richest people rose $290 billion, to $1.54 trillion from $1.25 trillion last year, or a 23.2% increase. What’s that you say? You didn’t even get a 23% raise in the last year?
Wall Street led the charge for wealth creation, despite the stock market problems of recent months. Nearly half of the 45 new members of the list of 400 made their new fortunes in hedge funds and private equity. The youngest member of the Forbes 400 this year is 33-year-old John Arnold, a former Enron trader who now runs hedge fund Centaurus Energy and has now amassed a $1.5 billi ...
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Follow Up to Past Blog Entries -- September 1 |
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By Russ Henke on
9/1/2007 9:20 AM
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Among the many enervating political and economic factors that have emerged in the last six and a half years, is the unmistakable and increasing trend of a rich-get-richer, poor-get-poorer US income distribution.
Over the last week, a report was issued by the Institute for Policy Studies and United for a Fair Economy that revealed quantitatively what we have known qualitatively for a long time; namely, that chief executives of American companies made an average of $10.8 million in 2006, more than 364 times the average pay of American workers.
Moreover, according to this year's report, CEOs received an average of $1.3 million in pension benefits last year. By contrast, less than 60 percent of US households led by someone aged 45 to 54 had any retirement account at all.
The 20 highest-paid CEOs of US public companies were paid an average of $36.4 million, three times more than the 20 highest-paid European CEOs, and 204 times more than the 20 highest-paid g ...
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Irrational Exuberence? July |
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By Russ Henke on
8/14/2007 8:07 AM
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This blog entry was written on July 15, 2007:
Over the past few months, weaknesses in the US economy have been reported frequently in the blog entries in this space and of course in the financial press. Yet despite these weaknesses and the ongoing misery of ordinary folks dealing with the housing slump and higher gas & food prices, the nation's stock markets have ignored hedge fund and sub-prime loan problems, and soared to record levels. On Friday July 13, 2007 alone, the Standard & Poor’s 500 index closed above a high set in March 2000 and the Dow Jones industrials blew by 13,900 for the first time in history.
In related news, US retail sales dropped 0.9% in June, and the US Trade DEFICIT widened again in May. The United States’ oil import bill alone increased to $19.0 billion - the largest since September 2006. The US trade deficit with China widened 3.3% in May to $20.0 billion, and the June gap could be even larger. Meanwhile, China posted ...
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Corroboration |
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By Russ Henke on
7/1/2007 3:59 AM
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It’s often surprising to find immediate corroboration of a theme for blog entries that appear in this space. Not two days after the previous June 24 & 25 blog items were published here about “The Rich Getting Richer", Merrill Lynch and the Cap Gemini Group released their annual World Wealth Report. In 2006, the world’s wealthiest saw their combined riches grow by over 11%! Fully 800,000 more people were added in 2006 to the rolls of folks who hold over $1 million in financial assets (not including their primary homes), up from 8.7 million such individuals in 2005. The combined wealth of these fortunate few totals over $37.2 trillion. That's “trillion” with a “t”, and adds up to a fourth of the entire world’s total wealth, about three times the US GNP. Of course, the US leads the pack of such rich people.
But hey, these rich folks are generous. In 2006, ...
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Post Script to June 24 Blog Entry |
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By Russ Henke on
6/25/2007 4:14 AM
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Some readers of yesterday's blog entry may be wondering if they might have missed the chance to ride the first day's price appreciation (over 13% in 8 hours) -- if only they had acted on Thursday June 22, the day before the Blackstone Group's IPO. Not to worry. It would have been difficult, since most Blackstone shares were already snapped up by money managers and big financial institutions.
But, hey, the stock is now publicly traded -- you can take your chances on future Blackstone appreciation -- call your broker! And remember, having watched what the Blackstone Group just did, other "alternative investment funds" may now choose to go public, such as KKR, The Carlyle Group, and more.
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Are the Rich getting Richer? |
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By Russ Henke on
6/24/2007 5:33 PM
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Among all the factors plaguing the vast majority of US citizens, very little space in these blog entries to date has been devoted to the unremitting and enervating trend over the last six-and-a-half years, of the rich-getting-richer, and the poor-getting-poorer in the United States.
With the US government (a) providing unwarranted tax cuts favoring the rich, (b) encouraging rising energy prices by condoning the lack of new oil refineries, (c) stoking international fear, anxiety and doubt, and (d) implementing countless other such policies, the resulting economic conditions have allowed the US wealthy to thrive while US workers’ wages have not even kept up with inflation, despite massive worker productivity gains during the period.
In the last few days, we have witnessed a quintessential example of the “rich-getting-richer” syndrome. Run by billionaires, the private-equity giant Blackstone Group popped up again in the news June 21, 2007 when Re ...
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Cadence in the News June 4 |
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By Russ Henke on
6/5/2007 11:01 AM
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In the June 3 blog entry in this space, Cadence was mentioned as one of the Big 3 EDA vendors. The New York Times reported on June 4, 2007 that Cadence is in talks with at least two buyout firms about a possible sale of the company. Cadence is said to have held talks with Kohlberg Kravis Roberts and the Blackstone Group. But they warned that a deal may not happen because of the “complicated risks in the company's business”. Other private equity firms apparently have looked at Cadence, but passed.
Like the private equity purchase of MCAD vendor UGS several years ago, (prior to its acquisition by Siemens this year), a deal for Cadence would be one of the biggest moves by private equity firms into technology, a sector they are said to avoid because of its volatility and capital needs. Though both Kohlberg Kravis and Blackstone have invested in technology firms before — most recently, Kohlberg bought the First Data Corporation and Blackstone purc ...
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MCAD & EDA in Q1 2007 |
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By Russ Henke on
6/3/2007 5:32 PM
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On May 27, 2007, I had planned to use this space to
report the financial results of the top three MCAD
vendors and the top three EDA vendors for Q1 2007.
However, comments on Memorial Day remembrances took
precedence.
For the record, in nominal Q1 2007, Autodesk broke
into the rarified atmosphere of eclipsing $500 million
in total revenue for Q1 (at $509,000,000). Dassault
Systemes posted $381,000,000 in revenue, and
Siemens UGS came in at $302,000,000.
An earnings' comparision will have to wait, as neither
Autodesk nor UGS reported earnings this quarter, each
for different reasons.
EDA vendor Cadence reported $385,000,000 in revenue in
Q1, followed by Synopsys at $293,000,000, and Mentor
Graphics at $190,000,000.
& ...
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Dates, Days and Deaths |
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By Russ Henke on
5/27/2007 6:12 AM
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The latest Q1 2007 financial results from the
leading MCAD and EDA vendors are finally out,
and I wanted to discuss them in today's blog
entry.
But Memorial Day 2007 is upon us, just about
1487 days since the infamous declaration of
"Mission Accomplished" in IRAQ. And the
situation there is getting worse, not better.
Over 100 American GI's have been killed in May,
with 5 more days to go. Some 104 soldiers were
killed in April. The last six months have been
the most deadly six months of the war. And
thousands more GI's have been injured, many
incapacitated for life. To say nothing about
the tens of thousands of Iraqis killed and
injured. And further, there is still no end
to the IRAQ war in sight. Millions of Iraqis
have fled the country, more by the day.
And don't forget, the war in Af ...
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