How did CAT succeed in boosting EPS even as its top line was flat at best, and when in reality this is likely just a deferred revenue timing gimmick considering global retail sales in Q1 have crashed compared to a year ago?The answer, which we will merely show without explaining as we have covered this topic time and time and time again, is shown in the chart below (hint: CapEx -50% offset by Buybacks rising by #DIV/0!).
This 42 year economist from French academe has written a hot new book which, as one review puts it, "exposed capitalism’s fatal flaw." One can see why the White House likes Piketty. He supports their narrative that government is the cure for inequality when in reality government has been the principal cause of growing inequality. The White House and IMF also love Piketty’s proposal, not only for high income taxes, but also for substantial wealth taxes. The IMF in particular has been beating a drum for wealth taxes as a way to restore government finances around the world and also reduce economic inequality. Expect to hear more and more about wealth taxes. Expect to hear that they will be a “one time” event that won’t be repeated, but that will actually help economic growth by reducing economic inequality. If the Obama White House, the IMF, and people like Piketty would just let the economy alone, it could recover. As it is, they keep inventing new ways to destroy it.
Forget bank-runs, the water run has begun in China. Residents of the western city of Lanzhou rushed to buy mineral water earlier this month after local tap water was found to contain excessive levels of the toxic chemical benzene. But that is the tip of what is a massive problem facing the Chinese people. Not only do they suffer choking smog day after day, but, as The Business Times reports, sixty per cent of underground water in China which is officially monitored is too polluted to drink directly, state media have reported, underlining the country's grave environmental problems.
This is how empires collapse: one complicit participant at a time.
New Home Sales collapsed 14.5% month-over-month to its lowest since July 2013. A mere 384k versus 450k expectations is the biggest miss since July. So much for the Spring buying season... This is a 7 standard deviation miss against the smart economists' estimates! Whocouldanode that when the free-money sponsored fast money leaves the game that real people with real debt and real wages are simply priced out of buying a new home? Supply of unsold new homes jumps to 6 months, its highest since Oct 2011 (as once again the visible hand's interference has produced yet another mal-investment boom as the 'if we build it, they will come' builders face an ugly reality).
That February spike that was the catalyst for oh so much aggressive JPY selling and US equity buying and "see, we told you so, here comes the post-weather pent-up-demand exuberance" has been crushed by the sad and painful truth of reality. For the 2nd month in a row, Markit's US PMI dropped and missed expectations... despite weather being a thing of the past. Sadly the story gets worse, as Markit notes "on the inflation front, manufacturers experienced a further solid increase in average cost burdens in April," adding that pricing pressures, "will feed fears that the recovery remains on a weak foundation of intense price competition." Need moar snow...
“Flash Boys” is a book written for Hollywood instead of the history books or policy makers. Stay tuned for the movie.
"We were wearing life jackets. We had time... If people had jumped into the water... they could have been rescued. But we were told not to go out." An entire ship full of passengers dutifully followed the instructions set forth by the crew. The "experts" told them what to do...."We're putting on our life vests. They're telling us to wait and stay put, so we're waiting..." Yet as it turned out, the ferry quickly became submerged. And following orders cost many their lives. 302 are either dead or missing. Just like Sewol, many countries in the West are sinking, and it’s up to you whether you sink with them or jump ship while there’s still time.
For seven years through 2012, the number of Californians aged 50 to 64 who live in their parents' homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development. Many more young adults live with their parents than those in their 50s and early 60s live with theirs. Among 18- to 29-year-olds, 1.6 million Californians have taken up residence in their childhood bedrooms, according to the data. Though that's a 33% jump from 2006, the pace is half that of the 50 to 64 age group.
Existing Home Sales Drop To Lowest Since July 2012; All-Cash Buyers, Investors Are 50% Of March TransactionsSubmitted by Tyler Durden on 04/22/2014 10:31 -0400
Another month, another drop in existing home sales, which in March declined once again from 4.60MM units to 4.59MM. While the good news was that this number did beat the consensus estimate of 4.56MM (based on a a range of 4.50MM to 4.85MM from 75 economist surveyed), the bad news was that once again, a near majority of the upside was once again due to investors and other all-cash buyers, who accounted for 50% of all sales. That and that like last time, of course, this was the worst existing home sales number since July 2012.
Too much testosterone in the room? Heard that all before. It’s the adolescent-like traders that were battling with levels of testosterone and cortisol, pounding on their chests like Tarzan swinging through the trees in the jungle of the financial markets that brought the world down too.
"Janet, we have a problem," is the resoundingly loud message from the latest Gallup poll of Americans preference (and relative enjoyment) of "saving" vs. "spending". It seems, despite all the hoop-la and exuberance about an 'economic recovery' that is pent-up due to weather but about to break out to escape velocity, the majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans' preferences in 2001. How long before a discussion of negative rates re-appears as the rich and powerful Oz-ians contemplate the latest effort to 'change' people's mass psychology...
As we warned numerous times in the last few days since the "de-escalation deal" was reached over Ukraine (sparking an instantaneous risk-on short-squeeze in stocks), the de-escalation has not happened. It seems even John Kerry has faced up to that reality now:
- *KERRY SAYS GENEVA ACCORD ONLY 'PIECE OF PAPER' WITHOUT ACTION
So now what? More red-lines? More sanctions? Just don't tell the headline-buying algos... Of course, he blames the Russians for the worthlessness of the deal.
I find it supremely ironic that ‘We the People’ have become modern day North American Indians and are taking fiat beads in exchange for our valuable land and labor.
Keep interest rates at zero, whilst printing trillions of dollars, pounds and yen out of thin air, and you can make investors do some pretty extraordinary things. "Central bankers control the price of money and therefore indirectly influence every market in the world. Given this immense power, the ideal central banker would be humble, cautious and deferential to market signals. Instead, modern central bankers are both bold and arrogant in their efforts to bend markets to their will. Top-down central planning, dictating resource allocation and industrial output based on supposedly superior knowledge of needs and wants, is an impulse that has infected political players throughout history." The result was always a conspicuous and dismal failure. Today’s central planners, especially the Federal Reserve, will encounter the same failure in time. The open issues are, when and at what cost to society?