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For Caterpillar, This Is What The "Second Great Depression" Looks Like
According to the latest CAT retail sales data, Caterpillar has now reported an unprecedented 29 months of declining global retail sales, with the month of April seeing a 16% Y/Y collapse in China (after a 25% plunge in 2014 and a 20% plunge the year before), while Latin America just suffered an epic 44% Y/Y crash, the biggest going back to 2009, after a 28% drop the year before.
Or as far as the industrial and heavy equipment bellwether is concerned, the emerging markets (or BRICS) are in an unprecedented economic collapse.
To put Caterpillar's ongoing second great depression in context, during the Great Financial Crisis, CAT suffered "only" 19 months of consecutive retail sales declines. As of April 2015, this number is now 29, and there is no hope in sight of seeing an annual rebounce any time soon.
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Stock up on this news. Who needs sales when you can buy back your own shares?
We've got shovels, where are the ready jobs?
Start by digging some mass graves, I'm sure they'll come in useful sometime in the future.
Bullish. The Fed will start buying heavy machinery to move all of that newly printed cash around.
Forget all that, when does the FOMC pregame show start?
Tick Tock till bankocalypse & market fallout 2.015....
Caterpillar’s excuse: China has stopped buying our equipment because of Edward Snowden’s disclosures. ;-)
Looney
Why not? Everyone knows NSA hacked Cat equipment so big bro knows where all the precious metals are being unearthed and who is mining them.
When there is insurection, .gov will start these machines and mow down entire cities, cheaper than using military ordinance.
A cat is like Apple, as long as there is battery juice they can start it up and use it remotely :)
Take moar meds..
That first one is deeper, the second one is wider. I'm just so confused....
shut up and take your pill
I am usually game to jump on the big bro bandwagon but I think you need to erase irobot from your DVR.
Not just China, but most of the world isn't buying heavy equipment. Cat build's great shit but if you can't sell it, your screwed....
Caterpillar still makes the best military bulldozers out there. Israel still has a lot of Palestinian homes to destroy and plow under to make room for the new settlements. Bullish for Cat! Some hasbara boy on the net said that because the Israelis give the Palestinians five minutes notice to get out, this proves they are true humanitarians.
Last I checked the benevolent first world nations don't even bother notifying the nations they are bombing that they are going to do it. So yeah, in the context that we get away with bombing people indiscriminately without any warning, when a country, any country, actually takes the time to notify the residents that they are going to be bombed shortly is exceptionally humantiarian.
But then again, Israel is always an exception to everything.
I moved to China before Snowden did his thing, and I noticed a glaring lack of CAT machines. Komatsu is first, and the Korean companies are right behind. Maybe CAT is too expensive.
I keep saying build taller dams!
But nooooo..
Haven't you heard? We're green now. So back to nature. You know, like most of the third world....
The First World is a complete artifice based on cheap energy and cheap money.
Both of which are getting rarer and more expensive.
Back to nature for us all.....sooner than anyone wants or expects.
The Theory of Carrying Capacity
https://en.wikipedia.org/wiki/Carrying_capacity
but obama stood next to the CEO and said the 2009 Stimulus would solve all this.....
You ever see "Last Supper?" They make handy disposal tools in more ways than one.
#SayWHACK
Hey, Caterpillar is cocooning.
It will re-emerge as a pure fashion brand with a pure-play retail strategy to take the world of fashion over with their ugly steel toed boots.
One of the the biggest stores on Bangalore's toniest shopping streets (and I mean prices matching 5th avenue in terms of RE), one of the biggest stores is CAT selling boots and shit.
Re-branding for the digital age.
;-)
Not so long ago...
https://aadivaahan.wordpress.com/2012/11/18/ps-2-cognitive-dissonance-an...
Sounds like there is an untapped market for luxury backhoes, they would be a more intimidating ride for the power players than a chauffeured Bentley.
Plenty of local supply of back hoes for local pols 813 ;-)
I've got it!!!
Solar panels.
Do I win something?
sounds like your comment may be leaning a little rayciss...be careful
I think they need to expand into train derailment repair equipment..seems to be a big new market in this area
heard a rumor that derailing devices
were being stolen out of rail yards...
hell , any kid with a cutting torch and welder
could fabricate one up in a couple hours...
ban shop classes....
Spokesman One, "Due to increased efficiencies we are hitting all time highs in productivity which, when combined with new synergies, is giving us access to previously untapped spaces of win-win derrrrrr *head explodes*!"
Spokesman Two, "So yeah, we're doing stock buybacks and selling clothing."
Spokesman one scenario is funny....that talk...aaaargh...
It's entirely possible or even likely that they will emerge as a Chinese company.
a solid "buy"!
No shit. Fuck sales.
Buybacks baby!
Time for the unions to DEMAND 50% pay raises and multimillion dollar retirement pensions to begin after 20 years of clocking in and out. Send that production line to China...
What makes you think Chinese can't start their own heavy equipment companies?
last time i was in China, guides stopped in an industrial area
to pick up a bag of fruit ,so they said...
we walked thru a fully equipped machine shop
stone cold , no one working...
nice tools , none Amerikan made..
DutchBoy2015, What makes you think that you know what I am thinking? (You are wrong, by the way...)
It simply not the unions who fill some of the worker postions at Cat who have gotten those pay raises, it is the mgmt.. A couple years ago one of the unions agreed to no pay increases at for there not to be any pay increases for the next 6 yrs..
The mgmt of Cat has been given those lavish pay increases while the real value of the company declined.
What a shit show!
As I see things, CAT has two issues.
1. The world has over capacity of equipment manufacturers.
2. CAT is American and our government and military has ruined our name and reputation, something not easily or quickly repaired, if possible.
CAT makes a dominant machine. 2x useful life. Very little downtime.
There's the problem, they need to consult with GM on shoddy craftsmanship and planned obsolescence.
mounting protectionism on the part of the obama admin tends to result in lower int'l sales.
why do you think he reversed course and is pushing hard for free trade? the thing is falling apart and he needs revenue.
When you tell people "you didn't build that", people will give up and actually stop building things. Why bother when regulatory barriers and taxes take all the fun and profit out of something?
So will the TPP solve CAT's problems?
And "rebate technology".
The new EPA regs on diesels have cut the longevity and uptime percentages drastically while increasing fuel burn... I'd buy Japanese or Korean heavy equipment first...
Yes, Loss of intrinsic value, strong dollar and competition.
CAT's issue is that politicians think they can fix the business cycle boom and bust.........for our own good of course!
when we venture into nirp, the shares will continue higher
Print me some prosperity. I want moar.
The first Caterpillar Generator I installed in the 90's said, "Made in the USA".
A few years later they said, "Made In Mexico, Assembled in USA".
One I installed two years ago said" Fabricated in China, Assembled in Mexico and Inspected in the USA"...I just replaced that one.
It's all gone to shit.
With that said, my only advise is to invest in "content" because the only good product, now a days, is an intagible one.
If the U.S. unions only demanded more HUGE pay increases production would come flodding back to the motherland.
NOT...
Unions cannot be blamed for Cat's decline. Cat has long been a very tough cookie for the unions and has gone years without a contract in some cases. For plants in the US Cat has built in nonunion areas and has mixed employees (nonunion) in other plants.
What has happened to Cat is that they started living on their reputation while moving to the too common US corp attitude of finding the least expensive way or place to build (or source components) and little by little decreasing quality.
A couple years ago when the decline in profits had already started Cat negotiated some union contracts that gave no increase in current pay and froze future pay for 6 years. At the same time Cat increased the CEO's pay by 35% and made major increases to his retirement package.
It has been awhile so check my numbers.
Cat's issue are about their management and the competitiors quality and reliability having increased. For larger stuff many now prefer Komatsu and in general Kubota's managment has been execellent in making a place for themselves in all levels of the market. (Talking construction, not sure about Cat's mining equipment.)
I know that class envy is a totally cool thing to stir up but the CEO's pay has little to do with the cost of production relative to total pay.
Yes, pay and benefits of the average worker are normally the major cost driving factor. Sadly, in a global economy, wages across the world will roughly equalize. That means lower pay in the U.S. and higher pay in third world countries.
Actually what is totally cool, it seems, on ZH is to stir up class hatred - against the worker. It's just seems to always be them who is blamed.
What has driven the decline of Cat relative to it's competition has been the actions of Cat's management. The company began cutting back on the level of quality that made Cat's ultra reliable years ago. This gave the competition a foothold, then to Cat's surprise the competition actually used the foothold as a resource to begin bulding higher grade machines. (Instead of cutting more corners.)
While Cat's market has declined the management's pay and benefits have been greatly increased. I suspect the pay increases are due to mgmt's expertise at keeping the stock price high while letting the company decline. A too common mgmt style/reward today.
Just ask Boeing.
Yep. They are now threatening to move production overseas. They moved some to South Carolina (the NRLB tried, illegally, to stop it).
old cats never die
they just end up in the bone yard
bumper sticker on the D8
the world is my litter box..
I noticed the new subdivisions being dropped in by Pulte throughout my area all use Kubota equipment.
"I noticed the new subdivisions being dropped in by Pulte throughout my area all use Kubota equipment."
I was just going to say, how much of this decline is due to competition? Whenever I pass by a construction site, I see a lot of different kinds of equipment, some Caterpillar, some Kubota, some Hitachi, sometimes I'll see Komatsu or Volvo on one of the big machines. Caterpillar may have been very dominant at one time, but as of now I'm thinking the competition is giving them a serious run for their money.
http://www.thonline.com/news/national_world/article_7eff2044-fa32-11e4-a...
Wal-Mart's stock drops after profit, sales miss expectationshttp://www.marketwatch.com/story/wal-marts-stock-drops-after-profit-sale...
Muss be kontagious
Kubota makes toy sized excavation equipment.
No respectable dirt contractor is going to purchase/rent a 8 ton mini (Kubota's largest hydraulic excavator) to excavate basements and lay utilities.
Cat, Deere, Komatsu, Case, Link Belt, Kobelco, Volvo, Samsung, Daewoo rule heavy equipment and the foreign manufacturers are selling similar equipment cheaper than Cat.
Who cares about sales- just double the share buyback program. Stock should do fine.
and then, when the corporation fails.....the US Gov can swoop in, print moar and "rescue them from themselves" and the socialist takeover is complete!
..tried that, didn't work- still no pulse..
-time to merge with Tonka.
Earnings are a different story. Still well above 2007 levels and way above late 90's earnings.
2015 1st Quarter $1.81 Full Year 2014 $5.88 Full Year 2013 $5.75 Full Year 2012 $8.48 Full Year 2011 $7.40 Full Year 2010 $4.15 Full Year 2009 $1.43 Full Year 2008 $5.66 Full Year 2007 $5.37 Full Year 2006 $5.17 Full Year 2005 $4.04 Full Year 2004 $2.88 Full Year 2003 $1.56 Full Year 2002 $1.15 Full Year 2001 $1.16 Full Year 2000 $1.51 Full Year 1999 $1.32 Full Year 1998 $2.06 Full Year 1997 $2.19 Full Year 1996 $1.75The CatFinancial Group, had moneys flowing in thru the QE clusterfucks. Now their equipment is helping Richie Brother's Auction House increase their Share Price. Commodities such as Lumber and Mining need to increase to increase their sales thus real profits.
Will it ever end.
Boom times return with the beginning of WWIII.
Here's a brief list ofthe change in total shares by year for the DOW 30. The best buybacks are yet to come. 2015 and 2016 are forecasts from Valueline.
2010 -0.96%
2011 -2.88%
2012 -1.43%
2013 -1.22%
2014 -2.47%
2015 -1.69%
2016 -3.27%
Good stuff. Green Arrow.
Conventional retards, the strength of an economy is decided by strength in McDonalds, Monsanto, Twitter, Facebook, Marijuana outlets etc. etc. Grow up, for a change!
Stocks are a leading indicator. The biggest bullshit metric ever.
Check the polls.
- Collective says we are winning, join the borg
Lloyd Blankfein: Winning
Jamie Dimon: Winning
Michael L. Corbat: Winning
John Stumpf: Winning
Brian Moynihan: Winning
James Gorman: Winning
Richard Fairbank: Winning
Janet Yellen: Winning
Mark Carney: Winning
Mario Draghi: Winning
Jens Weidmann: Winning
Christian Noyer: Winning
Klaas Knot: Winning
Luc Coene: Winning
Stuart Gulliver: Winning
Ross McEwan: Winning
John McFarlane: Winning
David Hodgkinson: Winning
They'll just do some stock buybacks and they'll be fine. CAT is fine!
CAT needs to switch to making overpriced, but sexy looking, electric cars...and maybe even it's own space program...
This is a total catastrophe - it's sheer bedlam.
GET YOUR MOUNTAIN HOUSE AND GOLD COINS TOGETHER AND GET IN THE FUCKING BUNKER...NOW!!!
If I had a garden, and guns, and you needed food, your Gold coins would be worthless.
If I had antibiotics, toilet paper and tampons, your wife would give me all the food I want and a hummer for a gold coin.
Here is a link you will like 4thStool, espn.com
I guess the rechargable green models ain't workin out.
Lift a scoop, dump in the chute, back to the recharging station for a 2 hour break, lift a scoop, dump in the chute, back to the recharging station for a 2 hour break, lift a scoop, dump in the chute, receive Greenpeace Medal, back to the recharging station for coffee and danish..
The solution would be just to outlaw old construction equipment and ban the sales of it. It doesn't meet the new EPA regulations anyways. Cash for Clunkers was a great idea and as a Mitt Romney and Jeb Bush style of severe conservative I was a big fan of that program. Don't worry folks, the Federal Government, the Federal Reserve, and above all, President Obama have our backs on this. We just need more laws and more stimulus.
break every window in sight and we'll be looking at a gosh durned economic BOOM!
do it now, save the FED the trouble - they're tired and we should be thankful and give them a rest.
Breaking windows won't do it. We need to burn entire cities to the ground. That's what the economists say, anyway.
gotta have that space to purge. a work in process, apparently.
@roddy6667
The folks in Baltimore have already started, other cities are falling behind.
How many bulldozers and backhoe's does the world need? I think we know now.
Innivation time. Develop grave digging machines & sell them to the govt agency that purchased all those bullets.
that would be a fun machine to design
for some futuristic mad max type movie
would be cruel, frightening imagery ...
on the other hand
might be a real life horror reality , soon...
Hire Caterpillar to build equipment to dig holes at automobile manufacturing plants, have D12's push new cars into the holes and cover them with dirt. Brand new backhoes, loaders, etc to bury brand new cars fresh out the factory door.
Do that all day long, declare an automobile shortage, raise the prices of new cars by triple, it'll add to the GDP by ten times.
Build a brand new Caterpillar factory next to the Boeing 747 plant in Everett, Washington and bulldoze new 747s into a newly dug hole for new 747s.
Plenty of jobs and work right there.
You aren't forward thinking enough. Don't forget to account for holes for the Cat's themselves, 'cos Big Daddy want's to see some exponential growth there too!
And that is indeed where Cat's strategic advantage lays for the coming decade: other US manufacturers need to buy Cat's to dig their holes (to drop their unwanted inventory into), but Cat's can DIG THEIR OWN HOLES!!!
It's freaking brilliant. (Oh, and don't forget to blame UNIONS, which suck, but are nothing more than a tiny cog in the machine - but, yeah, if only it weren't for THEM!!!)
Creating a billion dollar global company to sell heavy equipment round the world and make a profit is soooo old school. You have enough money from the fed to arbitrage your own stocks for years without making a profit. Get with the new game guys..... duh
ceo bonus time
Caterpillar thinks its the only one that can build heavy equipment? LOL
CAT stock = doing gangbusters.
SPY down .010 % this morning. It begins! Lol.
Keep shorting; or muttering darkly.
One of the great things about USA sanctions on russia. Chinese companies building heavy equipment now. And they CAN build very high quality stuff.
They sell the cheap crap to American Walmarts where people gladly by crap just for the sake of buying.
REmember Japan in the 50's? I remember how everyone laughed at them with their cheap crap.
Now look.
Bullshit
Nothing but crap coming from China including tractors. If anything, try the Indian hardware. Mahindra is pretty decent. Rumor has it that the Chinese keep the best quality equipment for their own operations and everything sold into Europe or North America is 2nd grade.
Horseshit Europeans won't put up with crap .
Chinese products are horrible. I would really be surprized if their military hardware runs for more than a week before breaking down.
One of the great things about USA sanctions on russia. Chinese companies building heavy equipment now. And they CAN build very high quality stuff.
They sell the cheap crap to American Walmarts where people gladly by crap just for the sake of buying.
REmember Japan in the 50's? I remember how everyone laughed at them with their cheap crap.
Now look.
One of the great things about USA sanctions on russia. Chinese companies building heavy equipment now. And they CAN build very high quality stuff.
They sell the cheap crap to American Walmarts where people gladly by crap just for the sake of buying.
REmember Japan in the 50's? I remember how everyone laughed at them with their cheap crap.
Now look.
Volvo is setting up shop in NC. But only spending 500 million for a "new facility". Nobody drives Volvos in America anymore BUT Volvo is now owned by Geely.
Once Geely is producing and selling in America, the game changes tremendously for GM, Ford and Chrysler.
CAT has been losing ground to their Chinese built competition especially in the Chinese mining space. That and fewer replacements in North and South America due to mothballed operations. The oil and gas industry is also spending way less on equipment since last year and going forward.
No upside for CAT other than stock buybacks. Maybe they can merge with BABA.
What a shitty economy they have created for all of us. Heil Mao!
Hurry, more stock buy-backs.
SOME FOLKS HAVE BEEN CATA-PILLERED
CATA-pilloried
Thanks to global QE,it's become cheaper to hire 100 debt slaves at $1 a day to dig holes,than lease a backhoe for $500 a day to dig holes
"While MCD, WMT, and CAT having ongoing problems with revenues, and labor participation has collapsed, and entitlements are at all time highs, I'm still seeing overall strength in the economy."
my economy will certainly strengthen as soon as that first disability check hits my bank account.
Chronic malaise, porn addiction, or back pain?
yep
It's funny that I see their logo.
Their product is sound.
But no one is building in a collapsing culture.
Why build if your intention is to destroy.
Above ground anyway.
Business is booming on underground construction.
To bad CAT get in on some of that action.
Black stuff so go back to sleep sheep.
I remember the day pretty well.
CAT inked some China deal and the senior management were all preening about and taking a tour of "their" new China facilities.
To this day the thing most remembered was the almost childlike lost look in those managers eyes.
They could have been in a New Orleans whore house or the Hermitage.
They did not know it, but they were looking into the Abyss.
What they did not know was the Chinese considered that deal a technology transfer to reverse engineer CATs entire product line.
Go to any site in China and Africa. You will see Xugong, Liugong, Xiagong, Lingong, whatever.
See any CAT?
Nope.
China thanks you.
Good point and to the Topic.
- Can we Truly say we have the Best Federal Government & Smartest Corporate Leadership/Governance? I don't think so
- Maybe we were dumbed down by Success, by Design, or by Federal Government Capture by nefarious Interest Groups???
@%*&@#$@&
I was going to post that this very brief article could easily be expand and even linked to other Economic phenomena to make the case for a Second Depression.
- 'EARLY WARNING': 32 STATES FACE FISCAL CRISIS...
- Fights Break Out Over $30 Hot Dog Price at Stand Near Ground Zero...
- NYC Thug Tells Whites: Bow Down to Blacks, You're All Gonna Die...
- Woman Arrested in Kidnap Attempt of Toddler in Central Park...
- HSBC to charge for holding deposits...
- Debt Burden will Sap Domestic Consumption
- Loss of Wealth will Sap Home Sales
- Loss of 30 Million Bread & Butter Jobs Overseas will Drop Economic Velocity
Federal Debt Held by Foreign & International Investors as Percent of Gross Domestic Product, 2014:Q4: 34.75940 Percent of GDP, HBFIGDQ188S,
http://research.stlouisfed.org/fred2/series/HBFIGDQ188S
Current Account Balance: Total Trade of Goods for the United States©, 2013: -703,911,000,000 US Dollars,
Sum Over Component Sub-periods (2013 was last data),
http://research.stlouisfed.org/fred2/series/BPBLTD01USA637S
- Credit Bubble Territory is obvious in 2003 at 50%.
Bank Private Credit to GDP for United States
2011: 55.47615 Percent (Data spans from 1961 to 2011)
http://research.stlouisfed.org/fred2/series/DDDI01USA156NWDB
https://research.stlouisfed.org/fred2/series/MZMV
https://research.stlouisfed.org/fred2/series/M2V
https://research.stlouisfed.org/fred2/series/M1V
https://research.stlouisfed.org/fred2/series/MULT
SO All the GDP numbers are BULLSHIT! Just like i thought,
Wait till John Deere and CaseIH numbers come to light....Farm Sector's assholes are puckering.....Cat is big into Big Tractors and Combines.....I doubt that clusterfuck is included anywhere in these numbers.
I've had a sixth sense about bad things happening in my lifetime.....and a high percentage of them involved a calamity in the cards.....the past three months, I've got an eerie feeling...something is about to blow...have no idea what, where, or what....but I've got some bad vibes going on here.
have a sister who works for cat (white-collar worker) and they got H U G E bonus money for xmas (made me sick to hear about it. Shut up bitch!)
and she thinks things are so great
hmmm
i haven't talked to her since xmas so i am not sure what is going on there now.
"Great Recovery". That's funny. Where have I heard that before? :-)
I have owned hundreds of peices of CAT equipment. CAT used to make the best bulldozers and motorgraders. Today, many other companies make products that are just as good as CAT, if not better. CAT is not what it used to be and I think that with the decline in worldwide economic activity, this company will end up losing a ton of money. I have several friends that own a lot of CAT stock. I tried to tell them the last few years to be carefeul, but they wouldnt listen (they were loading up at around $100 per share). These guys are so fucked now!
China was going to save them.
The ReadyReserve and FEMA will be big customers one day soon.
"Bids Being Accepted: Carrion, disposal and sanitation, depression excavator and filler."
Liberty is a demand. Tyranny is submission.