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It's Official: For Caterpillar, The "Great Recovery" Is Now Worse Than The "Great Recession"
In October 2008, the month after Lehman failed and the Great Recession started, industrial bellwether Caterpillar underwent a series of 19 consecutive, record, declines in Global dealer retail sales declines, finally emerging from its unprecedented funk in May of 2010, just in time to celebrate the start of financial and economic Greece's collapse which ended with a sovereign default. Well, as of July 2014, that record is no longer valid, because starting with a -1% drop in Global retail sales in December 2012, CAT has now posted a new record of 20 consecutive global delaer retail sales declines, after a -9% Y/Y print for the month of July.
In other words, for Caterpillar, the Great Recovery is now worse than the Great Recession.
Of course, in a world in which fundamentals no longer matter, the stock price of CAT is just shy of its all time high.
Why? Because instead of investing in growing its business, R&D or its future, the company has redirected the bulk of its cash flow to do precisely what we said companies would do under ZIRP until such time as the Fed's despotic stranglehold on all assets finally ends: buying back its all stock with a relentless fervor, in fact, the higher the stock rises, the more CAT buys back.
Needless to say, all of this is assured a very happy ending.
Source: Retail Statistics
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Great news! This should be good for another 30 points higher on the S&P.
Thank God for buy backs or the economy would really suck
But forward guidance should be great now that St. Louis needs to be buried along with Detroit and Chicago now.
Does this mean the earths surface is getting a break?
i just have one question. How long have the Najarians been trying to GIVE AWAY their fucking book?????????
I've heard that the plural of anecdote is not data. But now with CAT, LOW, TGT, HTZ, etc providing lower guidance are we starting to see a trend?
They are shrinking but still holding on with the free money injections. It is clear that the shit hasn't yet hit the fan. A day will come when the free money injections just won't be enough anymore. When it does, oh boy!
To make themselves useful, they should take some of that machinery to Ferguson and demolish every cop building in a 100 mile radius!
I was gonna say Cat should come out with an MRAP or something.
pods
That's the spirit!
Yep, missed an opportunity there on the MRAP. Still time to get some bulldozers across to Israel, they look like they will probably be in the market for a few more. Still time for their clothing range to sponsor the Ferguson protest/riot/insurrection/race war/nazi-o-rama too.
Not really. Just build a low budget MRAP for communities. I am sure people can and would pool their resources to protect themselves against being Ferguson'd.
If you find yourself in a hole, best stop digging.
Except, that might be a foreign concept to a company like Caterpillar.
obviously, holes are the answer
very. deep. holes.
Deep holes would be a great answer for DC but instead all there is in that town is ASSholes
I think I saw a Sasquatch last night when I was eating a Slim Jim.
If CAT is having issues so could CMI aka Cummins. There stock have been going down since the 2nd quarter results. And remember the stock got up this much because they where buying it back.
Truth is stranger than fiction.
You said it!
He was always Mr Positive on CNBC.....they are a bellwether.....
Summer Recovery, Version 6 bitchez!
I am tempted to update my current estimation of USA gdp from negative 4% to negative 8%
Everything I have predicted is turning out correct.
It's not even a prediction. Just normal systemic analysis.
I only fear that my next prediction that we'll see assassinations of executives if QE continues will turn out to become reality
Why Fear that ??
I'd prefer that those guys just surrender like Lehman and Bear Stearns guys did, rather then bullets going through heads.
More civilized.
Okay, I agree with that. unfortunately, you are asking these people to essentially indict themselves.
"Free John Corzine"...
oh wait, nevermind.
precisely
Emk1,
Hertz coughed up the truth yesterday. I might just buy the stock because they were honest. Rather than spinning false hope expectations.
There are two kinds of corporations:
Those which are allowed to lie on their statements and those which do not have that clearance.
White House has the right to sign off on faulty statements of major corporations and they do it all the time.
Hertz may not be on that list, actually I think it's not on that lists. So, they can't risk going to jail.
Beat me to it. Would be nice to see these guys experience some real consequences for all their bad behavior for a change.
EKM - Yes. The second part of the W shaped depression. Q4 2008 was -8 plunge. After all the bailouts and money printing, it headed east and domestically drove up commodity prices. The bifucation, dumbell shape of the economy is the result.
"I am tempted to update my current estimation of USA gdp from negative 4% to negative 8%"
What does Winston Smith predict?
An American, not US subject.
Some day low, manipulated interest rates will return to normal.
That is going to be a day to remember!
Visit Craigslist or second hand stores and their loaded with almost new stuff that 20 somethings can get for free or little money. Why buy new?
The Baby-boomers are starting to empy their McMansions and down-sizing.
Grand pianos,etc for free. Just haul it out.
Same going on with construction equipment. Way too much for the building during the boomer spend till you drop years.
Perhaps its that the Gaza is flat now so no more dozers needed. But just wait till the bastards get their start on Syria and then Iran. Long CAT
Its all the 'shovel ready' jobs...how can a D9 compete with a 1000 guys with a shovel?
They could create another 20000 jobs by giving them spoons instead of shovels.
But what D9s are great for - CRUSHING THE CORPSES OF LYIN' POS POLITICIANS
EDIT - ....... and bury the mess afterward....
Plus, you dont need a whole fleet of portashitters for one driver...in fact if its a rental, the driver can do what he pleases in this regard..
moral of the story, you dont invest in capex(the future) when the future is a nasty depression. instead you use company funds to buy back stock so your options and stock holdings can be sold at massively higher prices than otherwise. CAT will file BR within 3 years because of this disgusting fraud they've committed.
Why do you insist on destroying the perfect false reality that our banksters have so assiduously created in the land of the free?
Staples to Shut 140 Stores This Year as Sales Decline - Businessweek
And Office Depot/ Office Max will close 400 stores. Green shoots!
....and the cash so saved can be directed toward stock buy backs....
Wait til Obamacare fully kicks in after the election. Then the shit will hit the fan. These times will be considered the "good old days".
Funny I said the exact same thing yesterday...
"Because instead of investing in growing its business, R&D or its future, the company has redirected the bulk of its cash flow to do precisely what we said companies would do under ZIRP until such time as the Fed's despotic stranglehold on all assets finally ends: buying back its all stock with a relentless fervor..."
Aye, parasitic economy; stock buybacks, pink slips, no investment in employees or training, sucking the company dry. Shades of International Harvester.
CAT will likely be the next GM bailout candidate when the current bubble pops.
If you have CAT bonds sell them before you get pennies on the dollar.
Nothing wrong here. I eat my seed corn all the time.
It tastes great, and it's less filling too
ok--so mathematically, what happens when CAT or IBM get down to a few million shares--are these last to exit stuck with an underperforming company which then basically becomes a private but listed compamny?
this is all so wierd.
Bailout or Bomb to Renew Global Development Goals.
Catching corporate PR phrase.
Maybe they should take a page from 70's Chevrolet, and go with the Planned Obsolescence. I mean, make machines that crap out after 7 years, and sales will BOOM!
"make machines that crap out after 7 years"
You mean like the currently manufacured appliances?
Scrap material.
Regretfully, GM is still tinkering with the obsolescence plan. I don't see many people who will want to participate in a Cash for CAT Clunkers campaign. IMHO.
Better believe there will be much more bailouts coming for banks as well as they have many items off balance sheet, like the Federal Reserve. Off-shoring reserves to deplete the banks. All one huge book-cooking game that will eventually end.
When the music stops/markets rolls, pensions vaporize rapidly.
Will make South Chicago and Detroit look like a picnic.
Entitlement attitudes will run wild.
If what you suggest is true... "Entitlement attitudes will run wild."
...then so will lead.
God man, be a bit more optimistic.
GM should buy CAT have taxpayers bail it out. Fixed!
It can be General Mess squared. The mess of 2.
Consolidate the U.S. and China, fixed!
China allows 3 more banks including StanChart to import gold -sources
| Reuters
Bomb Russia and China back to the Stone Age first and orders will soon follow. Warz, BitChez!
Orders for what? sodium iodine?
Just don't hit the new Wal-Marts opening on mainland China, ok?
Continuing to refer to the economic disaster as the Great Recession diminishes the reality of living in this Second Depression and I am disgusted by its use in describing this calamity.
Why can't journalists do it justice and call it what it is?
Yellun you bitch; PRINT MOAR....to infinity and beyond. screw ny chicago and KULIFORNIA, LOST WAGES: EAT DUST.
Caterpillar and Wal-Mart moving to China soon?
Death by a thousand cuts.
I think I need to poop.
I hope you aren't suggesting there is a finite amount of bulldozers, backhoes, and hydraulic shovels needed worldwide? Heresy!
2010 to 2013 - China's insane real estate boom building ghost cities. Cat exports lots of construction equipment. That has now ended. Crash pending.
That's the problem in the malinvestment environment we are in. It could be Caterpillar, but we are not sure. It could be construction but we are not sure. It could be the economy overall, but we are not sure.
Everything is suspect. Everything will be suspect. Good numbers and bad.
The only thing we know with absolute certainty is that the Federal Reserve is responsible for the malinvestment we see today.
Maybe a great time to but a CAT $110 Put for Feb 2015. Right now they are $7.90.
when SHTF, many companies will be doing secondarys at lower share prices. Has to happen, b/c tha tis how the world seems to roll.
Just eyeballing the entire graph from 2008 to 2014, the area under the curve looks to be exactly zilch. That's zero growth in six years, a result which parallels the cost-weighted consumption of oil, the QE-normalized rise in asset prices, and the trend in real take-home wages. The non-manipulated (or, as the case may be, de-manipulated) numbers always tell the true story. The global economy is not growing at all and hasn't been for some time. The United States is a sick behemoth just lumbering along and waiting for something to trip it up.
YOU HAVE TO MAKE MONEY TO BUILD THINGS
TO BUY
Caterpillar
NO MONEY
GOING BACK TO THE
POOR MAN'S BACKHOE
The DUMB STICK ( shovel )
This is exactly what 52% of the electorate wanted in 2008 and 2012.
This is stupendous!
Comunity organizer helped
-the car industry
-the banks
-Fannie and Freddy
Community organizer will help Cat as well.
...as the snake eats its tail, the remainder of the snake gets fatter....so too for all those with stock options issued by companies spending all their cash on stock buybacks.
There is no reason for buybacks to diminish....the management has options, the directors have options, and the mutual funds wish to see quarterly gains. So, all those running the show benefit from stock buybacks....plus thanks to our Fed, these corporations can borrow the money at zirp.....while total earnings may be in the decline, the reported earnings PER SHARE appear to be rising....
Unfortunately this does not represent a perpetual motion machine, but the day of reckoning will be after the current management and its board have retired.