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Will Corporate Spending Float The Economy in 2014?

Tyler Durden's picture





 

Submitted by Lance Roberts of STA Wealth Management,

 

 


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Tue, 01/07/2014 - 17:38 | Link to Comment RKDS
RKDS's picture

No, corporations will just cry for more certainty as can only be delivered by purchase mandates from mommy government.

Tue, 01/07/2014 - 17:47 | Link to Comment Rainman
Rainman's picture

Noted. Cut .gov deficit spending 50% and these dudes go down fast.

Tue, 01/07/2014 - 17:57 | Link to Comment LawsofPhysics
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correct, aside from potentially some small family farms, the earth is now dependent on government largesse.  Humanity has experienced the rise of small realitively isolated fascist states before (i.e. Germany or the former Soviet Union).  One has to wonder what the outcome of "one world" fascism will be...

Tue, 01/07/2014 - 18:04 | Link to Comment shepherd
shepherd's picture

German/italian fascism was a REACTION to (soviet) communism. I wonder why so many americans like to lump it all together.

Tue, 01/07/2014 - 18:08 | Link to Comment Ham-bone
Ham-bone's picture

American's are lumpy people...it makes sense.

Tue, 01/07/2014 - 19:09 | Link to Comment Colonel Klink
Colonel Klink's picture

Uh that's lumpen!

Tue, 01/07/2014 - 18:19 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Eventually they all were fascists, I simply picked the endpoint at which things finally broke (no more social fabric etc.).  It's irrelevant really as the outcome will be the same regardless.

Tue, 01/07/2014 - 18:27 | Link to Comment shepherd
shepherd's picture

Maybe someone should have told them.

Tue, 01/07/2014 - 18:56 | Link to Comment logicalman
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When government is the problem, there's only one solution.

Tue, 01/07/2014 - 19:41 | Link to Comment Musashi Miyamoto
Tue, 01/07/2014 - 19:47 | Link to Comment lakecity55
lakecity55's picture

Forward, Soviet

(Or whatever)

Tue, 01/07/2014 - 17:54 | Link to Comment negative rates
negative rates's picture

Mommy hasn't seen a corporation in years, or money for that matter.

Wed, 01/08/2014 - 04:30 | Link to Comment doctor10
doctor10's picture

Suspect Dave is in over his pay grade if he still thinks its worth investing capital  in the USA.

 

Tue, 01/07/2014 - 17:44 | Link to Comment darteaus
darteaus's picture

NO!  There's not enough money anywhere to keep QE going; that's why the Fed has to print it.

Tue, 01/07/2014 - 17:53 | Link to Comment LawsofPhysics
LawsofPhysics's picture

damn straight, especially when one considers current margins and real input costs for a company that actually manufactures something real.

Tue, 01/07/2014 - 17:55 | Link to Comment falak pema
falak pema's picture

there is a lot of capital investment required in first world infrastructure. But the corporates are so locked into the slave labour meme it will be very difficult to justify that except for certain industrial niches.

And we truly have to solve the financial conundrum one way or the other. Europe will probably opt for painful bail ins and that will cause social and political mayhem. But there is no way to avoid that as the Oligarchs will never relinquish their ill gotten without a fight. Its debt jubilee or its huge deflation; one or the other. 

The Internet economy will just zoom n boom; thats the key to the future; especially if you include decentralised techniques for localised production via 3D type printers and integrated engineering solutions of eco systems.

Move into renewables, local agribusiness and local intergated engineering for infrastructure renewal. Plus the global net. Keeping in mind the ongoing conventional economy boom in DCs which will have to be reengineered to not copy cat the past Western paradigm. Now that is a huge challenge.

For that to occur it will require the political oligarchy empire to change focus; the true frontier where the wars will rage.

Tue, 01/07/2014 - 17:56 | Link to Comment LawsofPhysics
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So, in the absence of a massive decrease in the human population (that would free up all kinds of capital and resources), go long sharecropping, physical assets/commodities of real value, and a dependable tribe...

Tue, 01/07/2014 - 18:08 | Link to Comment falak pema
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your tribe concept is beyond my grasp. But nation states and oligarchs will rule for sure. The local will mesh into the global in Davos and other world forums.

The blue print is already there. The welfare state looks like its over for fifty years. We are deep into neofeudal counter reform. 

If by tribe you mean networked power clques; yes. WS is a typical construct of that. 

Tue, 01/07/2014 - 18:18 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Some things never change, I think you "get it". 

blueprints are great, but calories will still be required in order to actually do anything.  I don't share your optimism in TPTB actually delivering on anything, regardless of where they hold their meetings.

Tue, 01/07/2014 - 18:00 | Link to Comment Bennie Noakes
Bennie Noakes's picture

Whatever floats your boat ...

My boat is the good ship Lollipop.

Tue, 01/07/2014 - 18:12 | Link to Comment AccreditedEYE
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People need to stop pretending that the market still speaks freely. Data is managed, like prices are managed, like expectations are managed. Don't think this market has a chance of expressing itself freely... that's probably the biggest lesson of the last 5 years. Until something breaks, there's no reason to think otherwise. (In a nutshell, you will be gutted if you short on this kind of information. Stay to the sidelines or buy crap but don't let them make you another victim)

Tue, 01/07/2014 - 19:23 | Link to Comment Soul Glow
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The people managing the system can't keep all the balls in the air forever.  One of them, bond market, FX, or stocks, has to fail at one point.

Tue, 01/07/2014 - 18:20 | Link to Comment Rising Sun
Rising Sun's picture

moar debt ceiling, moar print

 

waiting for the announcement when the US goobermint starts buying GM's stuffed channel inventory, Walmart's bloated LCD TV inventory and Apple's iphone/ipad inventory to keep these markets humming

Tue, 01/07/2014 - 18:24 | Link to Comment luna_man
luna_man's picture

 

 

"Will corporate spending float the economy 2014?"...Is this an trick question?

 

Corporations are hoping they can just stay in business thru 2014!!

 

CRIMINALS, don't look for me to help!!

Tue, 01/07/2014 - 20:08 | Link to Comment thomasincincy
thomasincincy's picture

Just wait till they let you buy alcohol on EBT!

I'm getting me some of that dom perignon! and stocking up on bourbon. Yes! lol...

sin tax

Tue, 01/07/2014 - 19:43 | Link to Comment lakecity55
lakecity55's picture

"Thank you for welcoming me for my State of the Union address. By this time next year, I hope the need for all corporations will have vanished except for the ones I pick for their importance to our nation.

Our New Fascist Soviet model will be the envy of the world! There will be no need for cash, EBT cards will supplant cash and bank accounts, which the government will be needing, along with 401Ks and other private investments."

"Almost all Americans will work for USG INC. Our Chamber of Fascist Corporations will guide our Economic Policy. Evryone will benefit, eventually."

Tue, 01/07/2014 - 18:58 | Link to Comment ejmoosa
ejmoosa's picture

Corporate profit growth is already at a 4 year low.  Do you really think they are going to drive it lower with capital spending.

Never worked that way at the organizations where I was employed.

 

They spent more during upswings and cut during downswings....

Tue, 01/07/2014 - 19:00 | Link to Comment TrustWho
TrustWho's picture

That group of 6 charts speaks volumes. 1975 - 85 period is the peak (USA Peak oil 1972 -75) and the economic drivers turn over. When one considers the downturn occurs in the best bond market ever with exponential credit expansion, what drives future growth? With World peak oil, 2006 - 10, likely in the rear-view mirror, cost of production, cost of distribution and R&D cost are all rising; therefore human wages will likely fall. Less disposable money and higher product costs leads to falling demand.

Nominal Equity and Asset prices will rise with freshly printed money. 

Fuch Bernanke!!!!!

Tue, 01/07/2014 - 19:14 | Link to Comment ebworthen
ebworthen's picture

Corporations investing in America and its workers?

That was back in 1958 - not a snowball's chance in hell they will do that in 2014.

I wish economists would get out of their time machines and intellectual bubbles and see things for how goddamned awful they really are.

Tue, 01/07/2014 - 19:32 | Link to Comment starman
starman's picture

Corporate what? Who you fukkin kidding 2014 will be one the greatest jobless economies! Sears , Kmart , JC P , Abercrombie,HP ,, GM , Ford , boing will be closing stores every other day and laying off hundreds of thousands! Just saying!

Tue, 01/07/2014 - 20:25 | Link to Comment Binko
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Retail is dying except for Walmart, Cell Phone Outlets, Nail and Hair Salons and Dollar Stores.

Tue, 01/07/2014 - 20:02 | Link to Comment itstippy
itstippy's picture

"A resurgence of capital investment would certainly help stabilize the economy and potentially lift it to a level that would stimulate stronger employment and consumer demand."

No.  This is not 1958.  An increase in U.S. capital investment no longer means Carter Carburater will build a huge addition on their St Louis plant and hire 8,000 more production workers.

Welcome to today's environment.  Over 90% of capital investment by U.S. corporations is now aimed at reducing labor costs either by lowering headcount at home (robotics purchased from Germany or Japan) or by moving the entire facility to Asia.

The old Keynesian models NO LONGER WORK in a global economy. 

Tue, 01/07/2014 - 20:22 | Link to Comment Binko
Binko's picture

Outside of the tech and financial Industries corporate managers no longer have any training or background in growing the business through investment or expansion. For a good decade the endlessly repeated mantra has been "cost cutting". Managers who acheived "cost cutting", usually through the easiest way possible which is labor reduction, got the promotions and the bonuses.

Once cost cutting ceases to bring returns they will just turn their attention towards lobbying for government favors and various forms of financial manipulation. Hiring more people to create more production has been taboo for so long that it won't even be on the table.

Tue, 01/07/2014 - 20:24 | Link to Comment SAT 800
SAT 800's picture

NO; it won't. that was an awfully easy question. what's the next one?

Tue, 01/07/2014 - 20:26 | Link to Comment MFLTucson
MFLTucson's picture

No but, corporate bonuses may for those few criminals that benifit!

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