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February 12, 2010     Post-Gazette
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February 12, 2010
 

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Page 4 POST-GAZETTE, FEBRUARY 12, 2010 by Sal Glarratam ~ .... ~/~ EARNINGS ARE MIXED Q4 GDP rose 5.7%, best in six years the Commerce Department reported but analysts expect growth to slow as consumers slow their spending. Improve- ments in inventories, strong business investment paced the strong increase after a record four straight quarters of contraction. "It's nice to climb out of a recession" said Richard DeKaser, economist with Woodbury Park Re- search, but *it's not a growth pace we expect to continue." He expects growth to con- tinue @ 2.5-3% in the next six months. Consumer spending about 70% of activ- ity, rose 2% in Q4. Business investment in equipment and software grew 13.3% the best in four years. Most are waiting for the labor market to improve, but don't expect that until the 2"d half of the year. The Chicago Purchas- ing Manufacturer's Index rose to 61.5, the fourth such gain and the best reading in four years. The mood of the market is stubbornly nega- tive, many stocks have got- ten punished despite beat- ing earnings expectations. Higher taxes would extend the middle-class cuts ex- tended under President Bush. The tax hikes on the agenda exceed $1 trillion over five years to $156 bil- lion, reaching 1.5% of GDP in 2015 and a three year freeze on non-defense spending to save $250 billion through 2010. The White House envisions a record deficit of $1.6 trillion in 2011. The market had one of the busiest weeks of this year. Apple computer re- ported earnings of $3.67/ share selling 8.7 million IPhones in a week, and $3.36 Mac computers and 21 million IPods fourth quarter. Apple closed up 3% on the news. Analysts had expected a sale of 8.7 million IPod units, so this was a pleasant surprise. Texas Instruments reported its fourth quarter earnings soared 143% to .51/share. Sales grew 21% to $3,01 billion, above views. VM-Ware rose 17% in its fourth quarter. The firm rose 18% to $608 million versus estimates of $554 million. The lone economic report housing starts dropped 16.7% to 5.45 million units, versus a forecast of 5.9 mil- lion units. Exxon's move into natural gas starts a consolidation debate. When Exxon Mobil said it will pay $41 billion for natural gas producer XTO Energy, the news lifted share prices of Devon Energy, Eacana and Chesapeake Energy, thanks to specula- tion of a new merger wave above their levels before the merger was announced. XTO is a leader in extract- ing gas from shale rock for- mations a low pollution en- ergy source, with gas prices still low, many smaller com- panies with sale assets are unworthy to sell now. There are risks as the water used in the refracture of shale can threaten water supplies. The largest rock formations are in Pennsylvania, West Virginia and New York state. They are at the depth of drinking water, and you have to be really careful. infracturing can use 260 chemicals, and could poison underground water supplies. The waste water used in drilling can be a problem. Operators are recycling the water and using it for an- other refracturing. Mean- while natural gas prices re- main depressed due to high stockpiles and the prospect of abundant shale gas even- tually flooding the market. Toyota, the world's #1 automaker is being investi- gated for reports of uncon- trolled acceleration in its vehicles. Toyota's stock fell 6% on the news, a ten month low. They have fallen 15% since Toyota on Janu- ary 26th suspended eight models including Camry, Corolla, and Rav 4, over con- cerns of sticky accelerator pedals. They halted produc- tion on other models and have recalled some five mil- lion cars worldwide. They are not sure how long this was going on and did Toyota know about the problem beforehand. Toyota urged its owners to take their cars to a dealership for an immediate fix. Goldman Saks downgraded Toyota to neutral from buy. Honda and Ford shares were up in volume with Honda up 6% and Ford gained 2%. Visa shares are up as con- sumers use plastic rather than cash. Visa's earnings were up 35% to $1.02/share beating views by . 11 cents, and revenue rose 13% above forecasts. This proves that consumers are feeling better. Share prices rose up 3% in after hours trad- ing and recouped its loss of 2%. The number of Visa cards increased 5% to 1.8 million, and transactions increased 12% to $10.9 bil- lion versus a year ago. They are using the cards as a debit, which accesses its bank accounts for about 70% of its transactions. For 2010, Visa stuck to its outlook for earnings for the next two years of greater than 20%. Profit margins reached 62% during the last quarter, but Visa does not look to return to their pre- recession free spending ways. It's time to call your finan- cial advisor or call me at 617-261-7777. The Mcltaly Burger? A recent story out of Rome, Italy, boasts the cre- ation of the "Mcltaly" burger, McDonald's latest Italian creation. Italy's Minister Luca Zaia defends the McDonald's burger although many have criticized him; furious that it is a simple sell out of Italy's reputation of producing the freshest and finest food. The McDonald's new McItaly burger uses all Italian beef, Asiago cheese and artichoke spread. Sounds tasty but foes argue that Italy prides itself on FOR ALL YOUR INSURANCE NEEDS AUTO * HOMEOWNERS * TENANTS LIFE * HEALTH * BUSINESS GROUP Experience makes the difference WE PROMISE TO MEET OR IMPROVE YOUR PRESENT POLICY COVERAGE AT AFFORDABLE RATES CALL TODAY FOR YOUR QUOTE 617-523-3456 1 Longfellow - Place Suite 2322 - Boston, MA 02114 the birth of the "Slow Food" movement and their love for delicious and healthy cuisine. McDonald's launched the new burger last month in Rome at a McDonald's near the Spanish Steps. Although officials say that this will boost Italy's economy, others fear it to be the beginning of the end of the artful way of cooking and eating. Vdzzd Funeral Homes 262 Beach St., Revere 781-284-1127 11 Henry St., E. Boston 617-567-0955 Louis R. Vazza - Mark A. Tauro Funeral Directors www.vazzafunerals.com Where DM the Democrat Party Go? Back when I was a child in the '50s, there were two major political parties. Republicans and Democrats. Ideologically, one was sup- posedly the party of the working-class and the other, the party of the rich. How- ever, when all was said and done, both parties were cen- trists. Democrats slightly to the left and Republicans slightly to the right. Watch- ing those 1960 TV debates between Republican Richard Nixon and Democrat Jack Kennedy surprisingly with hindsight, we saw two can- didates basically saying very much the same thing. By 1964, we began to see a guK develop when Democrat Lyndon Johnson took on Republican Barry Goldwater. It was a landslide for the New Society and a beating for the Republican Right. However, by 1968 when Republican Richard Nixon returned to the presidential scene against Democrat Hubert Humphrey with Inde- pendent George Wallace running as a third party candidate, we saw the Happy Warrior narrowly get de- feated by the New Nixon while Wallace took almost 15 percent of the vote. If you added the Wallace and Nixon vote together, it was liberal Humphrey, 42" per- cent versus Nixon-Wallace 58 percent. After 1968, the Democrats were never the same again. In 1972, US Senator George McGovern ran as a liberal and Nixon moved fur- ther to the right. In the end, it was a Nixon landslide as he won 49 states, McGovern won Massachusetts and the District of Columbia. Both parties continued moving away from the center to their respective corners. My fa- ther didn't vote for a Repub- lican presidential nominee until 1972 when no way would he vote for McGovern or what he seemed to stand for during the campaign, In 1968, he had stayed with Humphrey but he was the last Democrat my father would ever vote for as presi- dent. Even during the '50s when everyone liked Ike, my father supported Adlai Stevenson, not once but twice. Growing up I felt like a Democrat because I thought they made more sense and I identified with the party's policies. My father told me that Franklin Roosevelt was America's greatest president because he saved the coun- try from a Republican-fer- mented Depression and stood up to our enemies abroad during World War II. My father voted for Jack Kennedy in 1960 but 8 years later voted for Nixon, some- one he vowed he would never support. Eight years changed his mind. During college, I was pretty conservative. I voted for Nixon in 1972, my first presidential election. Later during the Reagan years, I voted for President Reagan twice. I was a bit nervous about Reagan in 1984 but no way could I vote for Walter Mondale. The Democrats of late have been so far to the left, liberal is too conservative a word to use. I'm tired of a political party telling me what's good for me. I'm tired of them pushing stuff down my throat. Government con- tinues to get too big because Democrats today forgot where the party used to be. Roosevelt, Truman, Kennedy and Johnson were not liberal crazy people. The Democrats greatness was in their abil- ity to govern in the center of the political spectrum. Today's Democrats have moved over to the liberal fringe area where it is be- ginning to blend with social- istic big government knows all attitude. The health care debate was a perfect ex- ample of this warped think- ing. Independent voters are now in the majority. They will be the difference be- tween winning and losing as Democrats or Republicans. The middle is not ideologi- cal, it is pragmatic. Labels don't work any better than soundbites. The country is in a great mess because ide- ology clouded the political picture. Who can focus on problems to be fixed when all we do is name call each other? The election of Scott Brown to the US Senate may very well be the beginning of a new political alignment. The last such alignment happened in 1968 with Nixon's election and the in- dependent voice of George Corley Wallace. President Barack Obama could very well be a one- termer if he continues to govern as an ideologue. Most of our current messes are the result of ideology rather than real leadership. For many baby boomers, the thinking is that the Democrats left them rather than" the reverse. If they want to grow stronger as a political party, they have to set mindless ideology aside and fix what ails the coun- try. Otherwise, they can re- place the simple donkey with a jackass!