|
Biz Links More Factoids December Part 2 December Part 1 November Part 2 November Part 1 October Part 2 October Part 1 September Part 2 September Part 1 Q4-01 Index Q3-01 Index Q2-01 Index Q1-01 Index Q4-00 Index Q3-00 Index |
But that was then and this is now: Real hourly wages were falling in 1991, but are rising today, underpinning real consumption. There was no fiscal stimulus in '91, but given the schedule of tax cuts from the tax relief act of 2001, there will be substantial fiscal stimulus this year. In March 1991, when the economy officially troughed, the federal-funds rate stood at 6%, compared with 1.75% today. Nonetheless, even as that rate was cut in stages to 3% by September '92, growth in calendar year 1992 did hit 4%. This time around, subpar growth of the 4% variety does seem likely. Two of the main reasons: The softness of rest-of-the world economies should slow the growth of exports; and housing and auto sales have been unusually strong through this recession, which will take the edge off normal "pent-up" demand. But otherwise, demand is always pent up; give the average person more money, and he'll generally go out and buy something. With rising real hourly earnings, consumption should also climb. And with growth at 4%, the unemployment rate should remain in the 5.5%-6% range, which should mean the labor market will stay tight enough to keep real hourly wage growth strong. Moreover, the classic factor that helps make for high-growth recoveries - inventory depletion followed by the need to replenish - seems firmly in place. In the first half, output will be boosted, as more of final demand is met by production instead of the drawing down of stocks on hand. And by the second half, production will grow even faster, as it satisfies both all of final demand and the need for inventory rebuilding. Pessimist argue that with capacity utilization in manufacturing at 75%, capital investment is bound to be anemic. Back in Q4-82, which marked the trough of the '81-'82 recession, capacity utilization was even lower than today. But did anyone bother to notice that, through the 1983 recovery, capital investment grew at double-digit rates? More Inventory Stats Stephen Dunphy, Seattle Times 11-13 A Dept. of Commerce report from October found that business had enough inventory to supply demand for 43 days, its lowest level in the year. The Conference Board said there was a drop of $75 billion to $100 billion in inventory in Q4-00. A National Association of Purchasing Management report said deliveries were beginning to slow, that businesses were not getting orders out quite as fast as they had a month earlier. This implies that companies getting new business have more trouble keeping up with demand.
According to Shilling, recessions are less predictable than commonly thought. And the current one is a particularly odd duck. Now, a more lethal recessionary phase is impending, as the malaise spreads to the Old Economy. Mounting job losses in the manufacturing and service sectors have caused consumer confidence to crumple. Consumers finally threw in the towel in the middle of last year and largely used their tax-rebate checks to pay off debt rather than buy new goodies. Spending is sliding dramatically. Housing prices show signs of leveling off, a likely prelude, says Shilling, to actual declines. Consumer spending patterns are in a rapid downshift because of the trauma of September 11, elevated personal-debt levels, growing joblessness and shoppers' propensity to demand price discounts and curtail the purchase of non-essential items. Income growth is likely to suffer from cuts in hours worked (December's rise in this regard was an aberration, Shilling maintains) and lower year-end bonuses for everyone from Wall Street investment bankers to auto workers. Management requests for wage concessions are cropping up with greater frequency than at any time since the Great Depression. And consumer spending will be curtailed by the need of Baby Boomers to finally save for retirement. According to Shilling, most bulls are counting on monetary and fiscal stimulus to rescue the economy. However, Shilling contends that Fed easing is way overrated. "We always got recoveries from recessions even before the Fed was created in 1913. The Fed is just along for the ride in any business cycle. If banks continue to raise credit standards and corporate and personal bankruptcies continue to spiral, today's credit crunch will increase in severity, despite all the ministrations of the Fed." Likewise, fiscal stimulus usually arrives too late to have much impact on recessions. Shilling insists that economic growth won't get the same push from a rising stock market in the years ahead that it did in the 'Nineties. For one thing, stock-market valuations remain at nose-bleed levels even after the selloff that began in March 2000. And many of the artificial spurs to corporate profits that drove stock prices relentlessly higher figure to reverse. The capital-spending boom of the late 'Nineties will inflate depreciation charges. Falling interest rates and a less ebullient stock market will boost required corporate contributions to defined-benefit pension plans.
It's important to identify the characteristics that make for a buy-and-hold investment versus something that requires more constant attention and that is more likely to be traded in and out of your portfolio: (1) Consistency, (2) Solid long-term prospects, (3) Good fundamentals and (4) The ability to earn your confidence in a down market. Says David H. Diesslin of Diesslin & Associates in Fort Worth: ''Buy and hold isn't dead, it just has to be done right. You have to decide what you are buying and holding and when you would sell it and under what circumstances. But you also have to remember that it's not the only answer. It can coexist with a lot of other investment strategies. It's people who take any investing approach as all-or-nothing who wind up with problems.''
Despite the huge rise in stocks, the leading indicators as a whole have been only mildly positive. In November, for instance, all the manufacturing indicators - among them the aforementioned vendor deliveries, factory orders, average weekly manufacturing hours - have all been negative. That doesn't bode well for employment prospects. Which could mean that stock prices are sending an inaccurate economic signal, at least for the near future. How Fund Categories Fared Barrons 1-7-2002
The authors see little change in the forces they believe created strong productivity-growth rates in the latter half of the 1990s; a fall in prices, they argue, drove companies to invest in productivity-enhancing technology goods, and those price declines are continuing. The price declines themselves stemmed from an accelerated pace of technological innovation. To expect strong productivity growth to continue seems an unlikely forecast amid one of the largest capital-spending slumps on record. But Jorgenson sees a substantial rebound in the making, driven by technology prices that are now falling even faster because of the recession. "These price trends are going to move people in the same direction that they did in the past," he said, which is toward greater capital spending on information technology. In a seperate paper, Jason Cummins of the FRB in Washington and Giovanni Violante of University College London look at the 'technology gap' in the economy: how much more productive the best machines are compared with the average machine. Their findings are startling. In 1975, the productivity of the average technology used on the factory floor lagged the best by just 15%. In 2000, the figure jumped to 40%. The gap actually widened in the 1990s, to 40% from 35%, despite the capital-spending boom. What this shows, Mr. Cummins said, is that "the frontier is moving out so quickly, the average practice has continued to fall behind." It also suggests that you "have to do a ton of investment to keep pace with the frontier" and that such investment pays dividends. Both papers support the argument that it is reasonable to project into the future the recent productivity gains of the past. In other words, despite the current recession, a big part of the New Economy story remains unchanged.
Nor is it difficult to build a case for 7% returns in coming years. With low dividend yields, real growth can only come from rising per share earnings. If corporations enjoy their long-term annual profit growth of 7%, we can expect 7% to 8% returns in the future, provided only that earnings multiples don't change. Returns in the 30s and 70s James Glassman, Washington Post 1-6 After the Great Crash, stocks fell four straight years, 1929 to 1932, for a total loss of 64%. But that was a time of terrible economic mismanagement, trade wars and 25% unemployment. At any rate, over the following four years, stocks tripled in value, recouping the loss and then some. The S&P dropped in each of the three years leading up to World War II (1939-1941), but that decline was more modest - 21% in all. Over the following four years, the S&P returned 146%. The period from 1973 to 1979 can serve as a warning to investors. If you had put $1,000 into the S&P 500 stocks on Jan. 1, 1973, you would have been left with just $691 in purchasing power by the end of the decade. A nightmare. But inflation rose at an annual rate of 9% during those years. Ask yourself whether the Fed will ever again allow it to get so far out of control. Anyway, what was the alternative in the 1970s? An investment of $1,000 in Treasury bonds at the start of 1973 declined to $707 in purchasing power by the end of 1979.
Fund accounting is quirky, and there are times - for reasons too complex to tackle here - when guesswork is involved. This was one of those times; since its fiscal year ends Nov. 30, MFS made its December 2000 gains payouts based on November estimates of what would happen at the end of the year. MFS guessed wrong. Of the original 92-cent payout, just 18 cents qualified as ordinary dividends. Forty-nine cents was actually a long-term gain, taxed at a lower rate, and 25 cents was a ''return of capital,'' meaning investors got their own money back and owed no taxes on it at all. By my estimate - using calculation factors MFS has now sent shareholders - an investor with about $100,000 in the fund overpaid taxes by anywhere from $400 to $1,500, depending on their tax bracket and filing status. Best guesses lead to periodic accounting errors in mutual funds, although the numbers seldom move by more than a penny or two per share. At that tiny level, the adjustments generally get worked out through accounting maneuvers without shareholders being any poorer or wiser. There is no law saying that a fund company must correct errors on a Form 1099-DIV, though most firms would do it if a discrepancy was deemed significant.
Many workers on reduced shifts put their lives on hold, unsure if next week is going to bring a full work schedule or a pink slip. Reducing worker hours "lowers income and raises insecurity," says Jared Bernstein, senior economist at the Economic Policy Institute, a nonprofit, nonpartisan think tank in Washington, D.C. Such workers, he adds, are "certainly not going to go out and buy big-ticket items." Without that additional spending, the recession could last longer than many economists have predicted. The BLS reports that the average American workweek for nonsupervisory workers fell to 34.1 hours in November, from 34.3 hours a year ago. For the past three months, the average workweek, at 34.06 hours, has been shorter than in any recession since the bureau started keeping seasonally adjusted numbers in 1964. In manufacturing, workers lost almost a full hour, watching their hours fall to 40.3 per week in November, compared with 41.2 in the same period last year. The nation's 90.3 million nonsupervisory employees earn an average of $14.52 an hour. With each one giving up an average of 12 minutes of work per week, the lost wages total more than $1 billion a month. November Update WSJ 1-8 The December employment report showed that the factory work week rose by 0.4 hour to 40.7 hours, meaning aggregate hours worked rose for the first time since January 2001. Economists viewed the work-week rise as significant given that firms often increase the workload of existing employees before hiring new workers, suggesting that activity is increasing.
Such a shift would slow the economy, reducing the chances of a speedy recovery. That is, unless consumers defaulted under the weight of all that debt, packing the bankruptcy courts and spreading financial distress among their creditors. Either way, the current mountain of consumer debt is likely to mean trouble. Relevant Consumer Stats During the first two quarters of the early 1990s recession, the average American household reacted to those tighter credit conditions by paring its debt by an inflation-adjusted $410, says Mark Zandi, chief economist at Economy.com. By contrast, during the first two quarters of the current recession, which began in March, the average U.S. household took on $1,420 of new debt. "Consumer balance sheets are coming out of this recession significantly more tattered than in the wake of any other recession we've ever experienced," says Zandi. American households spend nearly 14% of their disposable income servicing debt. Though that proportion fell somewhat in Q3-01, in part because of an influx of cash linked to tax rebates, economists still consider it unhealthily high. The average credit limit on a credit card has been growing at a rate of 15% to 19% a year in recent years. Despite the current downturn, the average credit limit during Q3-01 was up 16% from a year earlier. During Q3-01, home prices rose 6.1% from a year earlier, after adjusting for inflation, according to the Office of Federal Housing Enterprise Oversight, leaving many consumers with a ready asset to borrow against. By contrast, home prices fell in real terms during each of the past three recessions. About 350,000 American consumers filed for bankruptcy in the third quarter, and the total number of personal bankruptcies for 2001 appears likely to top the record of 1.4 million set in 1998. Relevant Creditor Stats So far, easy credit has helped soften the downturn. Lenders' charge-off rates for bad credit-card debt, for example, were at 5.35% at the end of the Q3, up from 4.22% at the end of the last recession. But even if that number abruptly shoots higher, most lenders today are far better capitalized than ever before, and thus better positioned to weather their losses. Over the past decade, lenders have been boosting their capital reserves, and they have learned to manage their risks more effectively by selling some of the loans in their portfolios, in the form of tradable securities. Those sales shift the lenders' risks to pools of outside investors. Credit-card companies are likely to have mailed out a record five billion new credit-card solicitations in the year just ended, up from 3.5 billion in 2000. That's equivalent to about 20 solicitations for every man, woman and child in the U.S. No wonder, then, that Capital One is the nation's largest single generator of mail. Worry Level of Debtors Falls According to the Consumer Federation of America, a Washington-based advocacy group, the percentage of Americans who said they are "concerned" about their nonmortgage debt payments is just 39%, down from 48% from a year ago. The percentage of Americans worried about holiday credit-card payments is only 27%, down from 35%. A Mixed Prediction Donald Ratajczak, Atlanta Journal-Constitution 12-31 Lower inflation, especially for energy, has allowed real purchasing power to grow more than 2%. Even with no growth in jobs, this will allow consumption to grow between 1% and 2% in 2002. Some economists have argued rising consumer debt and lower consumer confidence will prevent even that magnitude of consumption growth. In fact, much of the increased debt has been for auto loans, or for equity loans that have been used to pay off credit card balances. Monthly housing and auto payments are lower now than when the year began. Therefore, I think consumer spending will grow at the upper range of that growth in purchasing power but not higher. November Update WSJ 1-8 Consumer credit rose by $19.9 billion in November to $1.653 trillion, the Federal Reserve said. The nominal value of the rise was the largest since the Fed began reporting consumer-credit data in January 1943. Consumer credit grew by 14.6% on an annual basis - a six-year high. November's surge followed a $11.2 billion increase for October. Percent change of Consumer Credit at annual rate
The fear among analysts is that the debt deluge will put a cap on corporate spending, cutting off what many economists see as a spark for an earnings turnaround next year. Bulls argue that while consumers' assets have fallen 4% during the past two years, even as their debts surged 15%, the assets are still up sharply from the past decade, so the debts are manageable. Meanwhile, the value of assets owned by corporations has climbed 7% during the past two years, helping to at least partly offset the 15% rise in debt during the period, these analysts say. The bearish argument is now that the economy has slowed, debt has become much more of a burden. The loss of a big sales contract, or an industrywide slowdown, puts companies under more pressure than if they were facing smaller debts. Some investors argue that the value of the assets on some companies' books may be inflated, making their debts more of a problem. In 2001, there were three times as many downgrades of corporate credit ratings as upgrades, according to Moody's Investors Service - the fourth consecutive yearly drop in credit quality and the steepest decline in credit worth since 1991. That means that balance sheets are shakier, making it tougher for companies to weather the current slowdown, continue to service their debt and find financing to spur growth. The debt of U.S. companies stands at a record 48.1% of U.S. GDP, up from a recent low of 36.8% in the final quarter of 1994. In fact, debt has been outrunning economic activity - corporate debt rose 85% since 1994, while GDP increased 42% - a troubling figure to many economists. The news isn't all bad. The pace of debt growth for corporations is slowing, as some companies begin to focus on the need to improve their balance sheets. The 6.6% growth during the past year is the slowest in four years. While 2001 will mark a record year for corporate-bond sales, a lot of that debt is either refinancing older debt, or replacing shorter-term financing amid difficulties in the short-term commercial paper market. Moody's Downgrades Gretchen Morgenson, NY Times 12-23 Based on data through Dec. 17, Moody's Investors Service has downgraded 616 bond issues this year, well above the 2000 count of 472. This year, for every upgrade, 2.88 bonds have been downgraded - versus 2.26 last year. The current number is the highest since 1991, the last recession, when it reached 2.93 (though it is well below the 4.39 in 1990). Chapter-11's Henny Sender, WSJ 12-31 The number of bankruptcy filings is up sharply this year, and many experts believe more are to come in the current unsettled economic climate. Chapter-11 bankruptcy filings by publicly traded companies hit a record 143 this year, affecting $76 billion of debt, compared with 119 the previous year on $30 billion of debt, according to David Hamilton, a specialist on defaults for Moody's Investors Service in New York.
Jacques Gordon, research director at the investment-management unit of Jones Lang LaSalle, a Chicago real-estate services and investment firm, says the national office vacancy rate was expected to settle at about 13.3% at year's end, up from 7.4% a year earlier and 12.3% at the end of the third quarter. Cushman & Wakefield, a New York real-estate services firm, says Manhattan asking rents slipped to about $47 a square foot at the end of 2001 from about $51 a year earlier. Rents in San Francisco fell to about $46 a square foot from a peak of about $69.50 a year earlier. The year was marked by two unusual trends. The slowdown in the economy forced corporations to put excess office space back on the market in unprecedented numbers: 266 million square feet, or 3.5% of the nation's 7.6 billion square feet of inventory, was put on the market as sublease space in 2001, says Steve Coyle, senior strategist for Property & Portfolio Research. For property owners, a related - and equally worrisome - phenomenon was negative absorption. That means tenants occupied fewer square feet of office space in Q1-01 than in Q4-00, a first for the industry. Office demand shrank a few million square feet in the first quarter, then shrank at an accelerating pace through the next three quarters, leaving 48 million fewer square feet occupied in 2001 than in 2000, Mr. Coyle says. Compared with the 7.6 billion feet of total inventory, the number is small. But remember: Developers add supply all the time - about 142 million square feet in 2001 - never expecting that demand would ever actually diminish. Shortly after the attacks, many expected the Manhattan office market to benefit from the destruction or damage to more than 30 million square feet of office space, a dramatic reduction in supply. But the opposite occurred. Available space in midtown Manhattan swelled to 16 million square feet in December from 12.8 million square feet in August, according to Insignia/ESG, a New York brokerage firm. Many corporations that lost offices had a surplus of space elsewhere in the region. Manhattan vacancies ultimately settled at 9.1% at the end of November, up from 8% on Sept. 11, according to a Merrill Lynch report. Hotels were already suffering the most by the end of the summer, as companies sharply cut back on employee travel. Hotel fortunes then nose-dived after the attacks. Compared with 2000, a very strong year for hotels, 2001 was dismal: The revenue-per-available-room rate, a main industry indicator, fell 8% for the hotel business overall, says Steve Kent, an analyst at Goldman Sachs. The average industry occupancy rate fell to 59.4% from 63.7% in 2000. The silver lining: This downturn won't be as deep as that of the early 1990s, when hotels were saddled with high levels of debt, says Bjorn Hanson, an analyst at PricewaterhouseCoopers. In 1990, the average hotel was spending 14.1 cents of every dollar of revenue on debt service. Today, it's four cents on the dollar. With the dot-com implosion and severely curtailed technology spending by big companies, these same areas closed out 2001 with office vacancy rates as much as seven times higher, asking rents cut in half and concessions galore. About one-third of the nearly two million layoffs announced by companies through November of last year were in the dot-com, telecom, computer and electronics sectors, according to Challenger, Gray & Christmas. Markets with a more-diversified tenant base, such as New York and even the Washington, D.C., area, didn't crash as hard as Austin, Boston, Denver, San Francisco, San Jose and Seattle. Overall, U.S. real estate will be a reasonable haven for investors, with in-place leases protecting income through the current downturn, provided that it's short, forecasters say. Mr. Gordon, research director at the Jones Lang LaSalle unit, forecasts that major classes of real estate - office, industrial, suburban and retail - will provide returns of 7% to 9% a year as a group through 2003, compared with flat or negative growth widely predicted for the rest of the economy. Leasing is expected to be slow until the white-collar economy begins to turn around and companies use up the space they already have under lease. Which sector will provide the safest of havens for owners is a matter of debate. Steve Sakwa, a top Merrill Lynch analyst, says the office sector is potentially the most problematic, adding that supply-and-demand data could be more unfavorable than expected when firms release annual results in February and March. He picks regional retail malls as best suited to provide strongest returns in a weak economy. Mike Kirby, an analyst at Green Street Advisors Inc., a Newport Beach, Calif., real-estate research firm, says retail is more likely to suffer later in a downturn as interest rates tick up and store closings accelerate in 2002. He and Mr. Gordon pick office properties as the safest bet, reasoning that the sector will be quicker than retail to respond too good economic news, such as rising employment. 2002 Outlook Bob Howard, LA Times 1-8 Analyst Ann Melnick of A.G. Edwards expects REITs to deliver high single-digit to low double-digit returns this year, comparable to the "modestly positive" gains in revenue and income projected by analyst Ross Smotrich of Bear, Stearns."One of the concerns about REITs is that they did pretty well in 2001 because there was nowhere else for investors to go," Smotrich said. "As the economy starts to recover and show some momentum, some investors will surely go to other sectors." If the economy were to recover quickly, according to Melnick, REIT shares might suffer, even though the improving economy would boost the earnings of REITs. A comparable situation occurred in the late 1990s, when fast-rising technology shares came into favor while REIT shares stalled, causing many REIT executives to complain that their stock prices did not reflect the financial success of their companies. REITs have fared well in part because they have continued to pay rising or stable dividends during a time of falling interest rates and thus are more attractive than money market accounts and bonds offering lower yields. But it's not clear how REITs would fare if interest rates rise. "If interest rates go up, the spread between [bond yields] and REITs will narrow," Smotrich said, "especially since dividends will probably not grow as much this year because REIT earnings are not going to grow as fast." On the other hand, Smotrich added, climbing rates could benefit REITs in some ways. Rising rates sometimes slow the pace of home buying, which could benefit apartment REITs, he noted, and rising rates could draw some investors into REITs because they perceive real estate as a hedge against inflation. Shopping Center and Mall REITs Ray Smith, WSJ 1-16 Concerns about Kmart Corp. have been driving investors away from real-estate investment trusts that own community shopping centers. Community shopping-center REITs with exposure to Kmart include Kimco, New Plan Excel and Developers Diversified Realty Corp. But experts say investors shouldn't worry too much about Kmart's effect if retail REITs' exposure to tenants with significant credit risk continues to decrease. In general, retail REITs' exposure decreased in the third quarter from the second quarter to 1.8% of mall tenants and 1.9% of shopping-center tenants, from 2.1% and 2%, respectively, according to a recent report released by Morgan Stanley. The report identifies shopping-center REIT Federal Realty as having funds from operations with the greatest potential exposure to tenants considered high credit risks. Crown American and Glimcher are the mall REITs with the greatest potential exposure. LA Outlook Bob Howard, LA Times 1-1 Apartment markets will "soften moderately" in Los Angeles and Orange counties during 2002, continuing trends that began in 2001, according to a new forecast. In Los Angeles County, rent growth will slow to 3%, compared with 5% in 2001, said the report by Marcus & Millichap. The county's vacancy rate is expected to increase to 4.3% by the end of the year, up from 4%. "Many landlords, especially in Central L.A. and the South Bay, are finding themselves in the peculiar position of having to evict tenants who are no longer able to pay their rent," the forecast said. California's cooling economy will dampen demand for office and industrial space during 2002, say commercial real estate forecasters, who are much more guarded in their outlook for the coming year than they were as 2001 began. Investors, developers and commercial real estate brokers expect demand for commercial space to remain flat or decline slowly for at least the first half of the year, with recovery coming slowly - if it comes at all - in the second half. Two of the country's largest commercial real estate brokerages, Grubb & Ellis and CB Richard Ellis, peg the vacancy rate at slightly more than 15% for the approximately 170 million square feet of office space in L.A. County and about 11% for the 60 million square feet in Orange County. Office vacancy rates above 10% are considered a sign of oversupply. [From LA Times 12-4: LA-area office landlords are weathering the latest recession better than the last one. Rental rates remain higher in most office districts than they were in the early 1990s, the percentage of empty space is lower, and much less new space is under construction, according to a survey by Julien J. Studley Inc. Some landlords are in better financial position today because they bought buildings at bargain prices during the last downturn and hence can more easily meet mortgage payments, said Dick Schnell, a senior vice president at Colliers Seeley International. Another difference today, Schnell said, is that Los Angeles is not beset by mergers and consolidations like those of a decade ago that dumped so much empty space onto office markets.] REIT News, Analysis, Opinion and Tips Greg Andrews, analyst at Green Street Advisors says that the community-shopping-center sector's cash flows are stable for two reasons: grocery stores often take up almost half the space in these centers with 20-year leases, and smaller stores that provide goods and services, such as barber shops, pizza parlors, and drugstores, aren't as sensitive to the economy. (Ray Smith, WSJ 1-2) REITs that paid out higher dividends to shareholders outperformed growth-oriented REITs paying out lower dividends. Credit Suisse First Boston analyst Lawrence D. Raiman expects that trend to continue, at least through the beginning of 2002, as the weak economy slows REITs' earnings growth and investors seek companies that provide more income. (Ray Smith, WSJ 1-2) Analysts Steve Sakwa of Merrill Lynch and Jonathan Litt of Salomon Smith Barney like Simon Property Group. The largest owner of regional shopping malls, Simon has 90.6% of its space occupied, thanks to long-term leases. The two also recommend Vornado Realty Trust, which has office towers, retail properties and wholesale sites. And Sakwa likes Kimco Realty, the king of supermarket-anchored shopping centers. (Michael Arndt, Business Week 12-31) A favorite of analyst Lawrence Raiman of Credit Suisse First Boston, Capital Automotive owns 260 car lots, which it then leases to dealers under long-term contracts. The REIT has hiked its dividend 15 quarters in a row and now yields a bountiful 8.2%. (Michael Arndt, Business Week 12-31) A new report by Banc of America Securities shows that REITs raised their dividends by an average of 3.5% this year, down from 4.9% in 2000 and 4.7% in 1999. The report predicts dividend growth will slow even further in 2002, to 2% to 3%. Lee Schalop, REIT analyst at Banc of America, expects funds from operations for the largest 80 REITs to grow by 4.7% in 2002 based on a consensus of analysts' estimates compiled by Thomson Financial/First Call. (Ray Smith, WSJ 12-26) A number of executives and analysts in the REIT industry like to boast that while other sectors of the weakening economy are posting losses, real-estate investment trusts are reporting earnings growth. But a Dec. 3 report by Green Street Advisors says that's not necessarily so. Green Street thinks investors have been misled into thinking REIT earnings are growing. The problem is that write-offs and nonrecurring charges are not being reflected in the financial statements of some REITs -- making results appear better than they are. Write-offs and nonrecurring charges incurred by REITs that Green Street covers as of Q3 have cost the firms nearly $800 million. That figure could total more than $1 billion for the year. (Ray Smith, WSJ 12-12) In the midst of a bleak Christmas selling season for department stores, industry experts are bracing for mall closings. Retailers will be looking especially hard at locations in the nation's aging regional malls. At least 300 older malls, each with one or two anchor stores, have shut down since the mid-1990s, estimates Michael Beyard, senior resident fellow at the Urban Land Institute. Mr. Beyard says another 300 to 500 such malls may follow suit. Behind the problems at struggling malls is a glut of retail space. Last year, the U.S. had 15 square feet of retail space in shopping centers for every man, woman and child, up from 11 square feet in 1980, according to data from National Research Bureau and the U.S. Census. (Kelly Greene, WSJ 12-12) REITs have conducted 54 common-stock offerings, raising $5.66 billion in proceeds for the year to date according to Thomson Financial, a Newark, N.J., data provider. REITs conducted just six offerings raising $851.3 million in the year-earlier period. The overall year-to-date number of common-stock offerings in the U.S., including initial and follow-on offerings, as of Tuesday was 481, with proceeds of $110.58 billion. (Ray Smith, WSJ 12-5)
We are seeing lower rent growth and in some markets we 're seeing negative rent growth. For example,in the San Francisco Bay Area,rents have actually declined from levels reached a year ago. We are very concerned about fundamentals in Atlanta, where supply has been robust and where job creation has slowed dramatically from historical levels,and therefore we Ėve got into a position of rapidly increasing vacancy rates in California. The Raymond James team is currently favoring large national apartment companies. Their top picks are Equity Residential Properties (EQR [WSJ 1-16: current dividend yield = 6.2%]) and Apartment Investment & Management (AIV [WSJ 1-16: current dividend yield = 6.9%]), both of which are the largest owners of apartments and both have tremendous diversification. According to Lee Shalop of Banc of America Securities, declines in occupancy levels and rents during the next 12 months should result in additional declines. Banc of America economistĖs have an expectation of a strong recovery in 2002. This could mean additional rotation away from real estate investments. However, Shalop points out that this outlook can be reconciled with decent fundamentals. He acknowledges that real estate stocks are still reasonably valued,that dividends are safe,and that real estate fundamentals remain sound.Similarly,he thinks the real estate market is not likely to experience the kind of dramatic downturn that occurred in past cycles. Shalop's buy-rated stocks are primarily apartment and industrial companies in high-barrier-to-entry markets and office companies with long leases that can pay dividends and generate positive growth. His favorite names are AMB Property Corp. (AMB - industrial real estate in 27 metropolitan markets), Archstone-Smith Trust (ASN - apartment communities [WSJ 1-16: current dividend yield = 6.7%]), Boston Properties (BXP - has property in Boston, DC, midtown Manhattan and San Francisco), Equity Office Properties Trust (EOP [WSJ 1-16: current dividend yield = 6.6%]) and Equity Residential Properties Trust (EQR - 1,100 multi-family properties in 36 states). Analysts generally agree that lodging REITs face an uphill battle. The results of the next two quarters will directly reflect the impact of September 11 as air travel drops and corporations switch to teleconferencing as a means of face-to-face relations. We are very optimistic on the supply picture going through 2004, so what we need is for demand to come back, says Crow of Raymond James & Associates. Demand is a function of GDP growth and if we were able to get GDP growth back to an annualized 3.5% range, with supply in the 1.5% range,for the next couple years we should have excess demand-to-supply,at least incrementally, and that should help to firm occupancy rates and drive room rates back up at least to levels of 1999. Additionally, Crow notes, lodging REITs have suffered significant turnover in their shareholder base that has been precipitated by their prudent decision to lower or even eliminate their dividend during the near term,dividends that drew investors to these stocks in the first place. These stocks have traditionally been income-focused stocks and when you eliminate or reduce your dividend oftentimes you're faced with an exodus of existing shareholders. That pushes share prices down until the value investors come in to buy the companies for the real estate as opposed to the current income, he says. For now, Crow's top picks among lodging stocks are Host Marriot (HMT) and LaSalle Hotels (LHO).
Bullish strategists also wrap their case around declining inventories of manufactured goods, which should speed the revival of demand. Inventories this year have been cut by about $100 billion, equal to 1% of GDP. The decline has been swifter and deeper than in past cycles, says Tobias Levkovich, senior U.S. institutional equity strategist at Salomon Smith Barney. In the 1990-1991 slowdown, for instance, inventories fell by 0.6% of GDP over a two-year span. Next year, however, purge could lead to splurge. [The other reasons to be bullish: the Fed's interest-rate cuts, the tax cut of last summer and low gasoline prices.].
In the portion of the survey that is asked of the general public - not just stock investors--39% picked real estate as the single best investment to make now, up from 28% who felt that way last year. Stocks were the No. 1 pick of just 20%, down from 29% a year ago. That's even though 52% of the general public thinks stocks will go up in the coming year, compared with just 33% who felt that way last year. Stock investors exhibit the same caution as the public at large. Only 28% say they'll invest more in stocks and mutual funds in the next half-year, down from 42% who said so in 2000. That's surprisingly cautious, considering that only 33% think stocks are overpriced, down from 51% who thought so in last year's poll. Stock investors have lowered their sights. Fully 54% expect to earn only single-digit returns from stocks in the long run, vs. just 31% who were so pessimistic as recently as 1997. Tech stocks look like a better bargain to some investors this year, with 21% calling them somewhat or very cheap, vs. only 7% who thought so last year. (To be sure, 46% still think they're overpriced.) International stocks are still a black box: Fully 47% venture no opinion on them at all. A WSJ/NBC Poll Karen Damato, WSJ 1-7 A WSJ/NBC poll surveying investors with at least $5,000 in the stock market or mutual funds found that more than half believe the risk of losing money in the stock market is higher than a year ago. Only 31% of the investors in the December poll said they rated the risk about the same as a year ago. Sixty-three percent of women said the market is more risky now compared with 44% of men, according to the poll. Still, almost half of those surveyed said they are just as confident about their ability to handle their investing activities as they were a year or two ago. Twenty percent said they were more confident of their investing acumen. Another Poll of 401(k) Holders Josh Friedman, LA Times 12-31 The November poll of 500 participants in 401(k) plans, to be released this week by No. 2 mutual fund provider Vanguard Group, found that respondents expect an average 7% annual return on stocks over the next year or two. It's the first time a national survey has found 401(k) investors expecting less than double-digit returns on their accounts, according to Vanguard. Nearly one-fourth of respondents expect stock prices to rise 30% to 100% a year over the next two decades - in line with the results of public-opinion surveys from the height of the late-1990s bull market. Only 15% of respondents reported making a 401(k) portfolio change in the last six months. Twenty-two percent said they intend to contribute a higher portion of pay in the next six months, compared with 12% who raised their savings rate in the previous six months. The hazards of owning company stock in a 401(k) account is poorly understood, according to Vanguard's analysis. Respondents rated company stock as less risky than stock mutual funds. Just the Facts Adjustable-rate mortgage funds There are 24 Adjustable-rate mortgage funds. They provide the benefit of a return that will adjust upward if short-term rates start to rise. While you could face small losses in net asset value if rates run up quickly, the value will catch up as the mortgages adjust upward. Asset Management Adjustable Rate Fund (ticker: ASARX) had a trailing 12-month yield of 5.42%. Goldman Sachs Adjustable Rate Government Insured Fund (ticker: GSARX) had a trailing 12-month yield of 5.68%. (Scott Burns, Dallas Morning News 1-13) Signs You Live in the 21st Century (1) You have - by force of habit - entered your ATM password on the microwave keyboard - instead of setting the correct time for nuking the meal. [I did that in the 80s.] (2) You have a list of 15 phone numbers to reach your family of three. [Nope, I stopped talking to my family - in the 80s.] (3) You chat several times a week with several strangers from California, but you haven't spoken with your next-door neighbor in the last two years. [Guilty.] (4) Leaving the house without your cell phone, which you didn't have the first 30 years of your life, is cause for panic - you feel you must return home and get it. [What are cell phones?] (5) Using real money instead of credit card would be a hassle because it would take planning. [Guilty.] (6) You hear most of your jokes via email instead of in person. [Nope, I hear most jokes in the chat rooms] (7) You have considered getting an extra phone line so you can get phone calls. [Nope, don't like talking to tele-marketers.] (8) You wake up at 4 a.m. to go to the bathroom and check your email on your way back to bed. [Nope, but have checked my stock portfolio.] (9) You start tilting your head sideways to smile - as in ':)' [There has been nothing to smile about since March of 2000]. (10) You're reading this. [Guilty.] (11) Even worse, you're going to forward it to someone else. [Nope, buy MAY post it on my web page.] (anonymous e-mail) More Pessimism A lot of investors, in fact, an alarming consensus of investors are pushing stocks higher based on what could be the best case scenario. So what happens when things don't go according to the master plan? I don't pretend to know what will happen with the economy or corporate profits for that matter, but I do know that the odds of the longest period of economic expansion since World War II being followed by the shortest recession is a bet that I would not want to make. This is especially true when the current economy has been flooded with automobiles, appliances and consumer electronics courtesy of "zero percent" and "don't pay until 2003" financing plans. Call me a pessimist, but I think I'll take the other side of the Wall Street consensus. (Terry Bedford, MSN Money 1-9) "Imputed income" "Imputed income" is the benefits in service (not cash) that we enjoy from our household capital. Household capital is the money we invest in houses, household goods, and cars. Since the "income" we receive is in services, not cash, it never appears on a form 1099 or W-2. Suppose your house is worth about $150,000 and you own it free and clear. Suppose it would rent for about $1,500 a month. Your imputed income is $1,500 a month - less the cost of taxes, insurance, and maintenance. That would make your imputed income $1,050 a month or $12,600 a year. To have $12,600 a year in tax-free income from quality municipal bonds you would need to invest $230,800. To have $12,600 in after-tax income from long-term Treasury obligations (assuming a 28% tax bracket) you would need to invest $305,000. These figures are based on recent Bloomberg yields of 5.3% for the 30-year Treasury and 5.46% for top quality 30-year municipal bonds. (Scott Burns, Dallas Morning News 1-8) Bond Update According to Mary Miller, assistant director of the fixed-income division at T. Rowe Price, the combination of the Fed's rate cuts and other factors resulted in the best returns in intermediate-term issues. By late in the year, she said, two- and five-year Treasuries had total returns of more than 7%, while longer and shorter issues were around 4%. Similarly, the combination of risk and reward in corporate bonds produced better returns for slightly lower-rated issues than for the very best. Miller's figures showed corporate bonds rated "Ba" returning 10.4%, those rated "A" returning 10.3% and those rated the higher "Aaa" returning 8.9%. But when risk seemed too great, investors fled. Bonds rated "B" returned only 3%, while those rated "Caa" were at minus 3.1%, by Miller's calculations. (Albert Crenshaw, Washington Post 1-6) A Short History Lesson From the early 1930s to the late 1950s, it was an ironclad rule that stocks had to pay dividends that were higher than Treasury-bond interest rates. If stocks did not, then they were surely overpriced. But in 1958, stock prices surged 43%, and suddenly bonds were yielding more than stocks. Time to dump your shares? That would not have been wise. Over the next 10 years, the S&P rose 159%. And since 1958, stock dividends have never exceeded bond rates. (James Glassman, Washington Post 1-6) Butter Trumps Guns Asked to name the top issues for the government to address, respondents to a Harris Poll put terrorism at the top of the list in October, at 43%. The economy was second, at 20%. But by mid-December, after the recession had been made official, the economy was No. 1, at 32%, with terrorism at 22%. (Richard Stevenson, NY Times 1-6) Two Fed Surveys Twenty of the 24 economists at banks that trade directly with the Fed predict the central bank will raise its target overnight rate [later this year] to prevent an economic recovery from fueling faster inflation, according to a Bloomberg survey. Increases would follow a quarter-percentage point cut to 1.5% forecast by 19 of those surveyed for the Fed's Jan. 30 meeting. (Bloomberg 1-4) According to the median estimate of 19 economists contacted for this article, the Fed will trim its funds rate by another quarter-percentage point, to 1.5%, by the end of June, before hiking it to 2.5% by yearend, as the economy starts to grow again. These monetary conditions could provide a window of opportunity for bonds to perform quite well during the year's first half, aided by low inflation; many see the consumer price index rising by less than 1.5% in 2002. The median estimate among the economists we consulted is for the 10-year Treasury's yield to fall to 4.80% at the end of June, before rebounding to 5.10% at the end of December 2002. At midweek in New York, the yield was 5.20%. (John Parry, Barrons 12-31) Long-term Investing Like religion, patriotism and other high-minded pursuits, the noble tradition of long-term investing can provide a refuge for weasels. Did I take a beating in some misbegotten stock or mutual fund? No need to face up to my mistake. I just classify it as a ``long-term investment,'' dump the evidence in a file drawer and put the whole matter out of my mind. Thus do many people who fancy themselves investors become collectors instead. In a sense, investing for the long term isn't an ideal at all. It's a practical antidote to the perils of its alternative, short-term trading. The trouble with true long-term investing, as with the great religions, is not that it has been tried and found wanting. The problem is that so few people have ever really tried it. (Chet Currier, Bloomberg 1-4-02) Rollover Law Changes The new laws allow for tax-free rollovers between more types of plans. For example, someone enrolled in a 403(b) plan at his current employer could roll that money into the 401(k) plan of a new employer. In the past, transfers from one type of tax-sheltered account to another were not allowed without paying taxes and penalties. (Charles A. Jaffe, Boston Globe 1-2) Simple Plan May Saves Lives The epilepsy drug Lamictal looks and sounds too much like the antifungal pill Lamisil. At least 22 times, pharmacies have confused the names and dispensed the wrong drug. Mix-ups with look-alike or sound-alike drug names are a major source of medication-caused injuries and deaths. Now the FDA is pushing some changes. Expect the labels of more than 30 medications soon to list their names in a mix of upper and lowercase and different-colored letters. The hope is that putting, for example, the ''-ictal'' part of Lamictal in red italics will get pharmacists' attention so they don't grab the wrong bottle. (Lauran Neergaard, AP via Boston Globe 1-2) The Nasdaq 4044 Hard-hit by the decline in equity prices and the dearth of IPOs, the Nasdaq Stock Market has lost 690 listed companies since the end of 2000, according to data from the Nasdaq Web site. As of mid-December, the Nasdaq reported having 4,044 stocks listed on its Nasdaq National Market and the Nasdaq SmallCap Market, putting it on track to finish the year with its leanest roster since 1983. Nasdaq's ranks have been dwindling since 1997. That's when the quotation system tightened its listing requirements to exclude any stock that trades below $1 for more than 30 days. (Peter Edmonston, WSJ 1-2) Metaphysical Question Whether the market really sees the future is a metaphysical question that can be debated but never answered. What we do know from history is that stock prices, collectively, have a very good track record of predicting economic recoveries. But a "very good" record doesn't mean the market is infallible. Just ask those investors who bought into last spring's brief rebound. The Nasdaq index soared 41% between April 4 and May 22, before beginning another extended decline. By definition, not everyone who takes risks can win, and sometimes they can lose, and lose a lot. But just as those who take no risks guarantee that they'll be protected from loss, they also ensure that they can't win big. (Tom Petruno, LA Times 12-30) Cracking Passwords Even computer passwords that are rigorously protected may be more vulnerable than their users suspect. This is because users often attach a personal or sentimental context to their passwords that can be uncovered by sophisticated password-cracking dictionary programs. A survey of 1,200 CentralNic employees showed that 50% used passwords with a family connection, while one-third used passwords based on celebrities, fictional characters, or sports teams. About 10% of respondents used self-laudatory, "fantasist" passwords. The most secure kinds of passwords include random or partly random series of numbers, symbols, and letters, but fewer than one-tenth of all users choose such sequences. Users may also be bewildered by numerous regulations, such as frequent password changes, so they use passwords that are easy to remember and often write them down for quick reference. Most people use the same passwords for multiple functions. (NY Times, 12-27) Quick Facts, Stats & Opinions Almost 50% of 150 executives surveyed by a unit of Robert Half International Inc. say workers are most productive on Tuesdays. (WSJ 1-15) About 57% of 629 white-collar workers surveyed by Steelcase Inc., say their companies expect increased productivity to make up for staff reductions. (WSJ 1-15) The gap in yields between two-year and 10-year Treasuries is shrinking as investors sell the shorter-dated notes and buy the longer ones. That difference will narrow to 1.48 percentage points by the end of the year, down from a nine-year high of 2.08 percentage points in December, according to median forecast of 40 economists in a Bloomberg News survey. The gap closed at 2.03 percentage points yesterday. The trades suggest investors expect the Fed will start raising rates this year in a bid to head off accelerating inflation as the economy rebounds. (Heather Bandur, Bloomberg 1-9) The average pencil has enough lead to draw a line 35 miles long. (Wacky Facts! 1-8) According to government figures, nearly 40% of all homes are debt free. The South, at 42.1%, has the highest amount of debt-free homeownership. The West has the lowest amount, 31%. (Scott Burns, Dallas Morning News 1-8) Severance for full-time workers at companies with 100 or more employees became less popular in the 1990s, with access dropping to 36% of workers in 1997 from 50% in 1988, 41% in 1991 and 42% in 1993. In 1999, 31% of those workers had access to severance pay, but for that year's data, the bureau included part-time workers, making past comparisons tricky. Severance is less likely as firms get smaller. Only 24% of workers at firms with 100 to 499 employees had severance. Meanwhile, 53% of workers at companies employing 2,500 or more had access to severance. (Carlos Tejada, WSJ 1-8) Only 16% of about 370 companies surveyed by Watson Wyatt Worldwide have recently laid off or plan to lay off workers with skills seen as essential to competitiveness. But 38% made or plan cuts among employees without those skills. (Carlos Tejada, WSJ 1-8) During the late-1990s boom, everyone was talking about how Wall Street and Main Street were converging. As we all bought more stocks, everything moved together. Now, with announcements every 10 minutes about higher stock prices and the latest corporate cutbacks, Main and Wall may be forking off in different directions. (Allan Sloan, Newsweek's Wall Street via Wash Post 1-8) In a random survey conducted for Vanguard, 1,500 mutual fund investors were given a test containing 20 basic mutual fund questions. They scored an average 37%. Only 21% of the investors knew that if your fund charges an expense ratio (management fee) of 1%, your returns are reduced by 1% each year you own your fund. Amazingly, 49% of investors did not know that investing in mutual funds does not guarantee a return. (Michelle Singletary, Washington Post 1-6) With the stock market in decline last year, financial services companies started fewer new mutual funds. As of Dec. 20, about 900 new funds had been filed with the SEC, compared with about 1,400 in all of 2000. Filings rose for value funds, which outperformed the market. There were at least 119 new value funds as of Dec. 20, compared with 97 for all of 2000. (NY Times 1-6) In a survey of 3,000 US companies, William Mercer reports that the average annual health care premium per employee charged by health care providers will increase to approximately $5,564 this year, up from $4,924 in 2001. (Boston Globe 1-4) S&P, which tracks 7,500 companies, said 1,326 dividend increases were announced in 2001, down 11% from 1,496 hikes in 2000 and the fewest since 1991. The number of dividend cuts announced came to 127, up 65% from 77 in 2000 and the greatest number since 1992. A total of 78 firms omitted their dividends entirely, up from 60 in 2000. In the S&P 500, stocks that pay dividends fell an average of 0.1% in 2001, while shares that don't pay dividends slumped 5.4%, on average. The average annualized dividend yield of S&P 500 stocks is about 1.36%. (LA Times 1-3) A record 307.4 billion shares changed hands on the New York Stock Exchange in 2001. That's well above last year's total volume of 262.5 billion, itself a record high at the time. Way back in 1991, when a different Bush was waging a different war and we stood at the eve of a different recession, total trading volume on the NYSE was a mere 45.3 billion shares. (Peter Edmonston, WSJ 1-2) Foreign equities, including stocks in emerging markets, were up 8.1% in dollar terms in Q4 2001. That was their first positive quarterly performance since a measly 0.43% gain in Q1 2000, according to the Morgan Stanley Capital International's All Country Index, excluding the United States. This index plunged 15.1% in Q3. It appears that many foreign investors behaved like Americans in believing that they must jump back into stocks right now - even if it turns out to be too early - to be assured of big gains. This is one reason that technology stocks did so well in the fourth quarter, analysts said. (Jonathan Fuerbringer, NY Times 1-1) In just 59 days, the little sheaves of European folding money and stacks of coins that may linger on your dresser top will be worthless as legal tender in stores. Commercial banks will continue to redeem francs, marks, liras, and other currencies for a time, and central banks for a very long period. A timetable for each country can be found at www.euro.ecb.int/en/section1/timetable.html. (David Warsh, Boston Globe 1-1) "It's pretty standard in the middle of a recession to get a pause, when it almost looks like you're getting a recovery but it's followed by another [downturn]," said Merrill Lynch senior economist Stan Shipley. "We think we're in the midst of that pause here." (Star Tribune 12-31) Unfortunately, recessions rarely end with a whimper. More likely, some over-reaction on the downside punctuates the end of the recession. Then, plunging interest rates unleash housing and consumer durables, while falling inflation bolsters the purchasing power of the 94% to 96% of workers who did not lose their jobs. (Donald Ratajczak, Atlanta Journal-Constitution 12-31) BusinessWeek's survey of 54 fearless stock market forecasters found that they are, on average, are looking for a 13% rise, to 11,090, for the Dow; a 15% increase, to 1292, for the S&P 500; and a 14.5% jump, to 2236, for the Nasdaq. (BusinessWeek 12-31) Even as companies have slashed plans for research and for new-product launches, their commitment to international expansion has risen since Sept. 11, according to a PricewaterhouseCoopers survey of 171 business executives at large U.S. multinationals. Of those surveyed in November, 27% planned some form of geographic expansion during the year ahead, up from 19% before the attacks. (Jon Hilsenrath, WSJ 12-31) While prices for many commodities have fallen in the U.S., they have dropped even more abroad, where many economies are more exposed to the manufacturing sector. The price of imported commodities fell 9% in the 12 months through November, while the price of products exported by the U.S. fell 3%. That means it is becoming even cheaper to source products from overseas. And a strong U.S. dollar accentuates that effect. (Jon Hilsenrath, WSJ 12-31) Not since 1970 has a strong recovery followed a brief recession. Since 1980, the nation's number of jobs rose just 3%, on average, in the two years after a recession. From the 1950's through the 70's, the average increase was 7%. (David Leonhardt, NT Times 12-30) "There will be huge U.S. budget deficits perhaps until 2005, maybe even beyond that. Unless the world economy is heading for a depression, the world deflation trend could turn sometime in 2002 or 2003, followed by substantially higher interest rates. Without question, sharply climbing interest rates will deliver the coup de grace to the stock market, sending it to new lows." (Charles Allmon, Growth Stock Outlook via Washington Post 12-30) Analysts at Goldman Sachs are concerned that even if unemployment stabilizes, it still will remain high enough to limit increases in household income in the coming months and restrain gains in consumer spending. (John Berry, Washington Post 12-29) "It is a fragmented economy, and we will have to get it [recovery] back a little at a time," said Michael Bazdarich, director of the forecasting center in the A. Gary Anderson Graduate School of Management, University of California at Riverside. (AJC 12-29) Stocks of unsold goods are being reduced in the last three months of this year at an annual rate of about $100 billion, the sharpest reduction in history, according to several analysts. If firms just stopped cutting inventories - without rebuilding them - it would add 4 percentage points to the growth rate, if that happened in a single quarter. Economists at Macroeconomic Advisers expect that to happen in the first three months of the new year. That's why their optimistic forecast calls for the economy to grow at a 1.7% annual rate in the first quarter. (John Berry, Washington Post 12-29) Quick Tips Visit the Gibson Research Corporation page to get all kinds of technical information. One big attraction at the site is the "Shields Up!" page - which allows you to see how secure you really are on the Internet. Go to the site and click on Shields Up!! Click Test My Shields! and wait for the results. Next, click Probe My Ports! and see how you do. (EMAZING.com 1-8) Google Catalog Search [Beta] offers catalogs from major retailers. Google has scanned in the catalogs and enabled them for text searching - though they warn that searching may not be perfect, given the technologies involved. (Scout Report 12-21) Home Page Previous Factoid Top Sites
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||