• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

About That CapEx Spending Renaissance...

Tyler Durden's picture


For all the talk that imminent, inevitable, "any second now" CapEx spending renaissance is getting, we can only assume we are looking at a wrong chart of the change in quarterly fixed income spending that plugs straight into the US GDP calculation. There is no other possible explanation.

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Wed, 04/30/2014 - 09:31 | 4711614 ArkansasAngie
ArkansasAngie's picture

You mean buying back your own stock isn't CapEx? /sarc


Wed, 04/30/2014 - 09:37 | 4711635 Pool Shark
Pool Shark's picture



Too late for Twitter to buy back their own stock.

It's doing an 'Angry Bird' impression; crashing down and killing all the pigs who bought the IPO @ $45.00 last November:



Wed, 04/30/2014 - 09:47 | 4711686 fx
fx's picture

capex will be up HUUGE and off the charts for the coming two quarters. Assuming of course, that weather is never too  hot or too cold for any given second and that Obama keeps stroking his di** at optimum speed all day and night while desperately trying to fu*k Putin's ass.

Wed, 04/30/2014 - 09:33 | 4711623 TheFreeLance
TheFreeLance's picture


Wed, 04/30/2014 - 09:33 | 4711625 NoDebt
NoDebt's picture

Help!  I've overdosing on chart porn this morning!  God, I can't get enough of this stuff!

The worse it is, the better I feel.  Of course, when the revisions hit next month and we find all these numbers were nowhere near as bad as we thought, I'll have to put a bullet in my head.

Wed, 04/30/2014 - 09:35 | 4711636 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

ND, I know you like chart porn, but like the real stuff it is touched up and plastic.

Wed, 04/30/2014 - 09:48 | 4711706 NoDebt
NoDebt's picture

I'm cool with that.  If it's done in a high quality, aesthetically pleasing way I can still pretend it's all real.  I have that level of mental control over myself.

Wed, 04/30/2014 - 09:34 | 4711628 101 years and c...
101 years and counting's picture

coincides with the end of 50% bonus depreciation.  whowouldathunkit?

Wed, 04/30/2014 - 09:40 | 4711643 Dr. Engali
Dr. Engali's picture

CapEx is another victim of the fed's insane policies. Financial engineering and rewarding shareholders has taken precedence over investing for the future. Add to the fact that Zirp continues to punish savers and they refuse to spend. If there is no demand in the economy then there is no need for capital expenditure.

Wed, 04/30/2014 - 10:00 | 4711778 Flakmeister
Flakmeister's picture

True to point...

But name one sector of the economy where excess capacity does not exist...

BTW, I never knew that the FED was responsible for tax policy that encouraged financial engineering....

Wed, 04/30/2014 - 10:29 | 4711892 Dr. Engali
Dr. Engali's picture

The fed isn't responsible for tax policy, however zirp encourages the use of cheap money in order to reward shareholders over reinvestment. 

Wed, 04/30/2014 - 10:48 | 4711973 Flakmeister
Flakmeister's picture

My point is that there is nothing worth investing in, so, of course, that results in playing financial games by those that are capable...

In fact, if it were not for the free money driving the action in shale plays, things would be even worse as far as CAPEX goes...

The game is winding down, and bitching about how it is playing out is pointless. Even if the Fed were to vanish,  the economy would not return to historic growth rates and capacity utilization...

And again, Tax policy is at the root of the financialization of the economy. The fact that it takes 20-30 years to realize the full extent of its impact is only now becoming obvious...

People forget that the FED was in existence during the so-called Golden Age of the American middle class...

Wed, 04/30/2014 - 11:02 | 4712067 Dr. Engali
Dr. Engali's picture

Agreed on all points. You won't find any argument from me.

Here is an interesting tidbit:


Oil firms seen cutting exploration spending




Oil over $100 a barrel kills the economy, yet oil under $100 a barrel makes it to expensive to take out of the ground.

Wed, 04/30/2014 - 09:39 | 4711645 Sudden Debt
Sudden Debt's picture

As Zuckenberg would say: It's complicated

Wed, 04/30/2014 - 09:41 | 4711661 Leveraged Algorithm
Leveraged Algorithm's picture

It is all bullish...what does it matter.....

Wed, 04/30/2014 - 09:58 | 4711767 Flakmeister
Flakmeister's picture


Wed, 04/30/2014 - 10:06 | 4711807 SillyWabbits
SillyWabbits's picture

If you don’t invest in growth – you don’t get growth.  If you don’t have growth you get bought out by people who need growth by acquisition.   The growth takes place in stock values and the acquisition is plundered for stock growth.  The company shrinks but stock values grow as do the incomes of the acquiring and acquired growth averse management teams. 

A capital investment for organic growth detracts from shareholder wealth.  A worthless piece of paper bought and sold at the exact right time – now that’s real money made the old fashion way.

Wed, 04/30/2014 - 10:49 | 4711981 Flakmeister
Flakmeister's picture

And if you can't grow the worlds oil supply, you don't get any real economic growth....

Wed, 04/30/2014 - 11:57 | 4712349 Seer
Seer's picture

These flat-earth idiots are going to lash out at all us round-earthers, blame us when they eventually run out of [the ability to extract] oil/energy.  The concept of "finite planet" will still be totally lost on them...

Wed, 04/30/2014 - 19:55 | 4714251 o2sd
o2sd's picture

If the world's car fleet got an average of 100mpg (not too difficult), the world's oil supply would grow by 12%. Of course, then population growth would resume, negating any gains.


Wed, 04/30/2014 - 11:29 | 4712203 Seer
Seer's picture

And if you fail to realize the point at which no growth is possible and you've blown your wad for growth, then what?

Why can't people see the obvious signs?  I'd stated it some time back that CAPEX was going to be shit because there's no more growth possible.  Contrary to popular belief it's not the result of some conspiracy or even Obamacare.  Face the music...

Wed, 04/30/2014 - 10:13 | 4711830 AlamoJack
AlamoJack's picture

One tiny miniscule dot of CAPEX will be in the LPG holding and exporting buildup.  Get your MLP's NOW.

Wed, 04/30/2014 - 12:06 | 4711985 Flakmeister
Flakmeister's picture

That is so 2012.....

The smart money has been in on the ride, ready to pass the pig off to the johnny-come-lately suckers...

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