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If Caterpillar's Data Is Right, This Is A Global Industrial Depression
Most cats bounce at least once when they die, but not this one: after CAT posted its first annual drop in retail sales in December of 2012, it has failed to see a rise in retail sales even once.
In fact, since then Caterpillar has seen 34 consecutive months of declining global sales, and 11 consecutive months of double digit declines!
Why is this important? Because a month ago we asked: "What On Earth Is Going On With Caterpillar Sales?"
We have been covering the ongoing collapse in global manufacturing as tracked by Caterpillar retail sales for so long that there is nothing much to add.
Below we show the latest monthly data from CAT which is once again in negative territory across the board, but more importantly, the global headline retail drop (down another 11% in August) has been contracting for 33 consecutive months! This is not a recession; in fact the nearly 3 year constant contraction - the longest negative stretch in company history - is beyond what most economists would deem a depression.
We got the answer just three days later when the industrial bellwether confirmed the world is now in an industrial recession, when it not only slashed its earnings outlook, but announced it would fire a record 10,000.
Moments ago, CAT reported its latest monthly retail sales and they were even worse than last month: in the month of September there was not a single region that posted either a increase of an unchanged print. This was the first month in all of 2015 in which every region posted a drop.
Putting CAT's result in context, the Great Financial Crisis resulted in 19 consecutive months of sales declines. We are currently at 34 months and showing no signs of any pick up.
As such, based on CAT's ongoing shockingly bad retail sales we wonder if it is no longer merely a global recession: perhaps that time has come to call it what it really is - a global industrial (at first) depression, which has so far been hidden from plain view thanks to $13 trillion in central bank liquidity, whose marginal impact is evaporating by the day and a Chinese credit machine which recently hit a brick wall.
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I know a lot of people are big on paleo-X diets, but personally I think there is EVEN BETTER, namely targeting low sugars (ex: eating complex starches with fat).
The key thing is that sustained peak effort depends on sugar for both the mind and muscles, so there are significant advantages to finding food that gives you a dose of sugar slowly enough that it gets absorbed as glycogen in your muscle and liver, rather that coming in too quick and having to be turned into fat.
So my criticism of the paleo-X stuff is that it is more expensive than my solution, less adaptable: with or without meat, the key thing is to avoid the fast sugars (ex: juice, instant anything, baked potatoes, beer, etc.) but ALSO to load up on the slow sugars (ex: a good starch WITH FAT).
So I figure I do better carb loading eating rich lentil veggie curry with rice, than if I were eating lots of nuts, meat, fruit and whatever else paleo infers.
---
In any case though, anything that gets people away from fast sugars, processed foods, etc., is a step in the right direction!
Seriously, it's worse than you think.
Stop fucking pandering to your moron drinking partners. Reassuring lies are still fucking lies.
The only bright spot are the people who see there are no bright spots in the global economy.
Set all of the happy talk and the gloom and doom noise aside.
The global economy is structurally breaking down and the status quo are doing their best to retain it.However, no amount of Keynsian lipstick is going to fix this swine.
Only war, destruction and death of the elite class, and the death of billions of innocent people will fix this swine.
It took two world wars in the 20th century to finish the global economy and status quo from the 19th century. Why? Because the status quo will fight to your and their death to maintain their power and wealth. My country was destroyed by evil men and women, and their enemies. My grandmother was raped and murdered in 1945 by the invading Red Army. She did nothing to deserve that.
Only after everything is broken, and a billion or more are dead, will there be a bright spot.
It's called the fucking Sun.
A mite tropical between those ears?
An impending miracle?
Gun sales. Way up.
With compliments to your intelligence to see it, there are other intelligent people in the world.
Millions upon millions of them.
If they are intelligent enough to see it.
Isn't the bright spot what happens when the current situation becomes bad enough to trigger not just realization, but action?
I suspect you're missing nothing. It's worse than any of us think. The animals who destroyed the economy are desparately trying anything they can to maintain the status quo. The mainstream media is complicit. The elected leaders are clueless. The fabric that once held the nation together has eroded. The future doesn't exactly look all that bright. I worry about my kids.
You have to gp on the overall market size rather than CAT sales. It could be - I don't know - that CAT are losing penetration of a market that remains stable. After all the Chinese have presumably reverse engineered the technology in the factories that CAT built there.
The Chinese didn't have to reverse engineer CAT'S technology. CAT is in a joint venture with XCMG, Volvo owns 70% of SDLG, Luigong is in a joint venture with Cummins. A couple Chinese heavy equipment manufacturers have also purchased smaller western heavy equipment specialty supplies, such as in concrete pumping.
Reality is that most of the big Chinese heavy equipment supplies already have western content and expertise.
Thus it is with the world - a slow motion rendering of "Babylon Revisited". History does not repeat, but it rhymes with a VENGEANCE. F. Scott Fitzgerald on Financial and Moral Debt, when the money runs out and the debt is due (DO NOT CONFUSE THE TWO - Wealth does not equal DEBT):
http://www.telegraph.co.uk/culture/books/8289335/Babylon-Revisited-When-...
And in the early Thirties, as America sank into Depression, Fitzgerald found himself battling depression. His alcoholism was spiralling out of control, his stories were now abruptly out of key with the mood of the nation, and he found it increasingly difficult to earn enough to pay for Zelda’s medical care and their daughter’s education.
Written in December 1930, just eight months after Zelda’s breakdown, the elegiac “Babylon Revisited” is Fitzgerald’s exquisitely painful meditation on what he had wasted, his recognition that the cost of living it large is not just financial but emotional, psychological and spiritual – and that one can’t live in arrears forever.
That Christmas, Fitzgerald brought Scottie to visit her mother in a Swiss sanatorium, but Zelda’s erratic behaviour frightened the nine-year-old girl; Scott took his daughter skiing for the rest of her school holiday.
“Babylon Revisited”, written just as Fitzgerald faced the prospect that Zelda might be lost to him for good, and in fear for his ability to care for his daughter, is itself a kind of reckoning of the price one has to pay. Financial debts, paying the price for past extravagance, becomes a metaphor for moral debts, the loss of one’s sense of character or one’s personal credit with the world.
Yes. Debts form characters...how true. Ain't seen nothing yet when the Preys cannbalize in wastelands much to the glee of the Predators who do not even need to build pretenses (sophisticated traps).
What is happening to the big Japanese companies?
Is this just CAT losing market share? Is it just a 'dollar' problem?
Eventually our overvalued currency will leave us with no worldwide business except selling our awesomeness (financial paper).
Next the Global RESET commenses.
CAT is the star spangled example of what globalization does.
Sure you get a medium term return for sending US jobs overseas and close US factories.
But then all those production line managers that all the American MBA laughed at suddenly get access to better machines and material.
10 years of making every mistake in the book and Wham-O!
Now you have 20 lower cost substitutes for CAT across all segments.
Unless CAT comes up with Fusion Power or Asteroid Mining, they are doomed to go the way of other big names then sought their fortune in China.
Sure they will get clever with some John Deere sales agreement where you are not allowed to repair your own equipment.
That will work for 5 minutes.
RIP McDonald Douglas.
Bingo.
In 2009 I watched $150K Cat 503 C sell for $34Kat repo auction. They had no more than 500 hrs on them, a bank from Oklahoma rushed them to repo sale and a guy in Minnesota bought all 5 of them.
I suspect the purchase price was a bank stalking horse purchase, but now in I see that these deals are coming again!
Cat is a dying horse, they rode this out and now its time to fold their tent for good!
The global financial parasites are hoarding the capital, the reserves, and whatever "growth" they say we have for themselves, which is why the world is heading towards a depression. There's a shrinking amount of capital and credit for everyone else.
We really need a 3rd term of Obama in collusion conjunction with Paul Ryan, Mitch McConnell, the Chamber of Commerce, and the FED to flood the markets with trillions in new debt and flood the country with millions in uneducated socialist and Mooslim refugees to really finish the job.
Unpossible! Obama told me everything is awesome. This story is a lie.
nudged the laff meter...
CAT's ongoing shockingly bad retail sales
I see less and less CAT equipment at local mines and construction sites. But much more Swedish and Japanese. This trend is long standing.
I see CATs everywhere. Saw them in Japan parked right next to the Komatsus and Mitsubishis.
Practically the only equipment I see around here save for maybe Deere and JI Case. Some Volvo.
Hmmm. If CATs are being offered in repo sales so cheaply, maybe I should buy one.
Would come in real handy at rush hr btw/ Jones Bridge Rd and Cdear Lane w/ all that Navy traffic
getting off base. Takes 25 mins to go 2mi in my car. Bet it would take 2.5mins to get that far
in a big ass CAT.
It's time for "Cash for Clunkers (Caterpillars )." Just think of all the shovel read jobs we could have just by burying the clunkers. Heads up, California Steel is planning to layoff 200 shortly. They just opened a new pipeline making facility manufacturing up to 24 inch pipe.
Sorry, double post.
If they are holding on to any disruptive technology, now seems a good time to turn it loose.
Ya never know...
Q: how much of the reduced sales/revenues of CAT are due to loss of market and how much is due to lower global economic activity?
A: I don't know. Does anybody?
The answer lies in analysing sales by competitors.
CAT is dead at their current prices and as somebody said earlier "WAY TO DURABLE", with overproduction and Chinese products 40% cheaper their monopoly has eroded everywhere except the U.S and parts of Europe. Also the fact the Africans and in particular the Nigerians, having finally understood the concept of technology transfer, are in the process of building their own heavy plant industry. I know for a fact they are reverse engineering Daewoo, Hitachi, CAT and LuiGong machinary, and if left unmolested will thrive. CAT cannot compete to help develop and build the last two regions to industrialize. The MENA and Sub-Sahara Africa.
See my earlier post. The chinese don't need to reverse engineer anything. Most of the big manuafacturere are ALREADY in joint ventures with the Chinese.
Interestingly, you raise some additional points to ponder. I think to myself that all these big boys like CAT, etc. are simply too big. Let's face it, the reverse-engineering trend has basically run its course on industrial machinery. Many Asian countries now make their own equipment that's equally good. That doesn't make CAT or John Deere bad though. Rather, it makes them too big to survive in their current configuration.
The "infinite" rise in revenue is another fairy tale. Only the "financial engineers" (who have ruined the entire world) expect rising revenues for a lifetime. How is that really possible? It's a sham. A fraud.
I'm of the opinion that corporations (like municipalities) need the flexibility to shrink when necessary. In our current environment, however, the morons on Wall Street deem that a disaster and basically destroy a company that just wants to get back to a smaller structure.
Anyway, you make interesting points.
According to Mcdonalds, it's a fast food depression. Of course, that falls under mfg which is kinda related to industrial.
QUOTE: "Caterpillar has seen 34 consecutive months of declining global sales, and 11 consecutive months of double digit declines!" - End
President Obama talks Caterpillar in State of the Union addresshttp://www.cinewsnow.com/news/political/191121471.html (Feb. 2013) Now you know the problem; short the bug that turns into a moth. Nah; they will get a bailout; go long. Bad news is always the new "good news"; right?!
Who is John Galt?
just wait until cat's sales have not increased for 150+ months
Well of course I would be buying CAT and JOHN DEERE etc , if it represented the same value for money.
But it doesn't ; my two newest tractors are Korean with Chinese motors, and they are both rock solid , no fancy shit, and good steel.
And cheap.
At what point does the area under the curve from the current 34-month period equal or surpass the area under the curve
for the 19-month (2008-2009) edition?
In the old days, you could actually cut the curves out of the paper and weigh them for comparison.
CAT will continue on downhill until they realize that the entire corporation must file Chapter 11 bankruptcy. CAT is on a trend that is much worse than they let on in the news. Forecasting CAT's demise does not take much if one just looks at the trend of contraction. We are all now entering a financial black hole that this doomsday machine cannot escape. From this point on it's every man for himself IMHO.
Oberhelman should have known better, frankly.
Seems more like a dog than a cat.
It looks worse then a global depression. Check out USPS mail system; a first class small package now takes over 10 days to travel form Chicago, for example, to Dallas. 2-day Priority takes at least 4 days now for many places...and we are not even into the heat of the Christmas season yet!
The roads are pot-holed, the mail system is deteriorating and the nation is bankrupt yet Barry wants to shower money on tearrists in the ME?!
Has to be the worst POTUS in my lifetime by far, even worse then Bush which is saying alot. Congress has the lowest rating in history ... I can see why.
You don't need bulldozers when the largest part of GDP is Financials. Good news is bits and bytes are up.
Not to worry, CNBC is reporting right now that Las Vegas Sands (ticker symbol LVS) popped almost 4% today.
Yeah, and as far as "industries" go, I heard an ETF poobah call his occupation an "industry." If that's true, with the size of our derivatives markets, we're hands-down the world leader in "industry."
God bless America.
Silly of me to notice...should have sold my CAT stock long ago... any company who would cater a pillar at a social function deserves to go out of business...
Well, what are the ombined sales figures for all heavy equipment makers over the same time frame? Maybe time to panic, maybe not.
Otherwise known as: The New World Order.
I hardly ever see CAT equipment at construction sites. I do see plenty of Korean and Chinese equipment.
Something like deere?
https://www.google.com/search?q=john+deere+stock&ie=utf-8&oe=utf-8
96 @ 76
Here are some more signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
humor bitchezzz
why are the bearish ETFs being shutdown?
Probably because a good cat cost $100K and a Chinese copy cost $1.00
Lets face it, the US$$$ is dead. We cant even afford our own stuff anymore.
He's dead Jim
Pay attention. It has been the New Depression since the privately owned banks were bailed out.
Bow down to the Talmud or defy it.
Keep on keeping on, Yen Cross. God bless you and yours.
Looking at the graph...looks like a shallow global depression...when the central banks run out of pumping the economy...maybe a more dangerous depression will follow...
Thank G-d for stock buy backs!
Production of goods of value?
What production?
What goods?
What value?
We are so screwed.
:(((
-9 bs late for work
The planet is finite. At some point you have enough digging machines.
The World's Economies are for the most part, so debt-burdened and bloated, we're all going to have to wait for CHN and IND to pick up Global Demand...
ENTER Sardonic Scenario
...unless Team_USA and its 5-Eyes Vassals (GBR Commonwealth and Defense Treaty Base Hosting "Colonies") decide to start another (Quasi Proxy)Long_War; and set up the bombings of factories and Petrol/NatGas refineries owned by
New order for construction equipment, debt forgiveness/swaps(USTs/IMF-WorldBankNotes) peonage of wartorn nations (now owning all the Debt - which are tied to their future productions), Haliburton's services, increased Oil Px - and more importantly MOAR USA Bases (All your Base are belong to US) around the Globe.
No - I don't have access to some Chickenhawk Neocon, Libcon, Ziocon, MIC/Beltway Bandit/PuzzlePalace, or FEDRES_BANKER Plans; but I'm sure the aforementioned pleasure themselves daily at the thought of the Scenarios taking place.
I met a fracking crew whilst I was driving Alberta Hiway 21 today.
The world still turns.
Irrelevant data point. Triple seasonally adjusted data points are where its at!
On a serious note, how long can this go on before the markets succumb to these epic realities....i mean, whats 34 consecutive months of decline from the likes of caterpillar translate into in terms of illusion and money printing by tbe Fed - 1 trillion? 5 trillion?
These dumb Fed elitist zio-neo sociopaths are taking this into epic collapse territory...the type where gold cannot be bid and your next door neighbour has a meat cleaver trying to get to your stash of rice and beans.
No question about it. Industrial depression, collapse of CapEx and misguided austerity policies all over the world and resulting death of global demand and collapse of global trade due to one and only thing, oligarchs' sucking up the economic blood money from main street in a form of abhorrent inequality of incomes and promotion of fraud and crony rentier society.
More of on the people's economy in collapse I found at:
https://contrarianopinion.wordpress.com/economy-update/
Same dismal sales #s from the household brands in China. You need total global analysis embracing CAT and other top names (Japanese, etc). It will show how f*ed the real economies are. Emerging Markets growth with China as the Savior is a vaporising myth. Vulture meals are still cooking.
Down the side of my ZH page is an advertisement for a CAT excavator at 0% finance.
I reckon I will hang back a bit. It shouldn't be long until the offer is at negative interest rates.
That would have to be a good deal.