Altruistica

"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

18 December 2006

Sales Tax Receipts Point to Recession Underway

PLEEEEZE ! Ignore the hype and the "spontaneous" Creamer high-fiving of absurd pumpy stocks like Under Armor (UARM) on CNBS this AM. Take a little time to read the real statistics on retail sales as reflected in state tax receipts. The Liscio Report details that these promos are NOT being gobbled up by consumers. Instead they are looking for bigger discounts, even when there are MULTIPLE price cuts. Can you say "Housing Market"???

From the Liscio Report: Indicies Look Like Fall of 2000
http://www.theliscioreport.com/index.html

"The weakening consumption trend is now established, and the majority of our tax contacts expressed real concern about a slowing in sales-tax collections. It now appears clear that consumers are not spending the billions of dollars they have saved on gas in recent months."

Furthermore, when I e-mailed Liscio to share my view that we are entering a recession, here's the response I received: "We note with a shudder that our indexes look a lot the way they did in fall of 2000, especially the weakening and then big drop in the sales tax survey. The SDI led us into the last recession, and the states that led are very weak right now, as well." (The SDI is Liscio's proprietary sales-diffusion index.)

Texas Instruments trims forecast
In another profit warning among chip makers, Texas Instruments (TX, news, msgs) cut its profit and revenue forecast after the close yesterday, citing slower sales of semiconductors. The company also said weak sales could continue into next year.
Texas Instruments said it now expects earnings to be between 37 cents and 40 cents per share, lower than a prior forecast of between 40 and 46 cents per share. Analysts had expected 42 cents per share for the quarter. UFB ! But the stock was up 1.1% this afternoon after an analyst at JPMorgan Chase said this morning that the worst is about to be over for the company.

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