This Simply Does Not Compute: If Caterpillar Data Is Right, The Industrial Depression Has Never Been Worse

Tyler Durden's picture

It has been over half a year since we first downgraded the industrial recession to an all-out global depression by using Caterpillar retail sales data, which have been so counterintuitive to what the company's earnings have been reporting that last September we had to ask "What On Earth Is Going On With Caterpillar Sales?."

Today, we must admit that something simply does not compute.

On one hand, CAT stock has soared by over 30% from its 2016 lows....

... despite warning just yesterday that the pain will continue after the company guided even lower to already depressed expectations.

But what makes no sense at all is that according to the just released CAT retail sales data, the industrial recession since downgraded to a depression, just fell out of the bottom, when the heavy industrial equipment company reported that February world sales crashed by 21%, after falling "only" 15% in January, led by double digit drops in every single market:

  • US down 11% after sliding 7% in January
  • China and Asia/PAC down 26% after being down 22%
  • EAME down 23% after sliding 14% the month before
  • Latin Marica imploding by 45% after a 36% drop one month ago, and one of the worst monthly drops on record.

Visually, this is as follows:

And what is more confusing is that CAT has not only not had a positive monthly increase in retail sales in a record 39 months, or more than double the length of the Financial Crisis' 19 months and the longest in history, but the February drop was the biggest one month decline in 5 years!

Of course, on its face, this data would explain why over the past month first the BOJ, then the PBOC, then the ECB and finally the Fed all surprised with not only more dovishness but much more outright easing as central banks panic to halt what at least according to this one indicator confirms the global economy has not been worse in nearly half a decade.

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JRobby's picture

Because it hasn't

Lies becoming apparent

Ghost of PartysOver's picture

I would like to see sales of all heavy equipment manufactures before I buy into this argument.  I see a lot of Jap brands doing road work where I live.  So is it bad for all manufacturers or just Cat because of currency manipulation.  The Donald would like to know.

giovanni_f's picture

Irrelevant. Not the data the Fed is looking at.

tc06rtw's picture

   
 What nobody seems to realize is that since humanity has become  “modernized”,  what is true, what is real, what is good, are now completely marginalized…  As long as “the good times roll”,  EVERYTHING is awesome.

Shocker's picture

The economy is busted, no way around it.... Just look around

Layoff List: http://www.dailyjobcuts.com

-

Bad Attitude's picture

The MSM is all rah-rah-rah the economy is great, unemployment is the lowest its been in years, inflation is near zero, and oh-by-the-way gasoline is cheap - thank-you-team-Obama.

The lies about the economy are only apparent if people know the truth - if they know how to find truthful economic data. Most people have no idea what the Labor Force Participation rate is. Most people have no idea what U3 and U6 unemployment is. Most people have no idea about the basket of goods that make up the CPI. Most people have never even heard of the Baltic Dry Index.

People are experiencing personal financial pain (real food inflation, unemployment/under-employment), but they have no idea how common their experience is since the MSM says the economy is great. There are no bread lines to gauge poverty. EBT cards that look like regular debit cards have replaced Food Stamps so the fact that someone is living off government assistance is largely hidden.

Forward (over the cliff)!

Keyser's picture

Peddling fiction is the appropriate term... 

0b1knob's picture

(Yellen waves her hand) this is not the data you were looking for.

KesselRunin12Parsecs's picture

Who needs CATS when you can dig silver out of the ground for $5?

Chuck Walla's picture

"Yes we can!"

Yes We CON!

 

FORWARD SOVIET!

richinSpirit's picture

Maybe he's seen a bit of data on the "opt out" economy and is considering that?

BandGap's picture

Agreed.

Now couple that with the information they get from the idiot box and their brown clown leader. He's telling them they must be crazy if they think things aren't just super. You have a nice mix for soothing the average Joe's nerves. People will hold out all hope until they can't.

 

Gaius Frakkin' Baltar's picture

I believe his exact words were "peddling fiction"... which implies anyone who has it shitty is a liar.

This coming from the Nigger who spends $20k for a dress. It is African nation type lunacy. But what did everyone expect?

Winston Smith 2009's picture

"The lies about the economy are only apparent if people know the truth"

And, thanks to entirely superficial, unintentionally erroneous reporting based upon a totally misplaced trust in "experts" combined with intentionally erroneous reporting, even if a person attempts to learn "the truth" they won't find it unless they really, really DIG and become more of an expert on a topic than the VAST majority of their fellow citizens would ever be willing to become even if they were capable of it.

THAT is why we are in the situation we are in economically, militarily in multiple, bungling world efforts at regime change, why someone like Felonious isn't wearing an orange jumpsuit as of about a year ago but is, instead, running for president, why those responsible for the massive frauds that led to our last economic crash aren't in jail, and why the ones guiding us into the next crash are listened to.

The world is a very complex place and most people simply can't be properly informed in all of the topics needed to vote wisely. They need to trust in those they elect to do what is in the public's best interest, but that hasn't been the case for a very, very long time (see quotes below).

The public has a definite sense they are being screwed and the protest candidacies of Trump and Sanders are evidence of that. People want to throw a wrench into the corrupt political machine and, frankly, that's the only way to have any real influence via the political process - vote for the candidate your corrupt party machine DOESN'T want.

“Now [the United States is] just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over. … The incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody’s who’s already in Congress has a lot more to sell to an avid contributor than somebody who’s just a challenger." - — Jimmy Carter, former president, in *2015*

“Political parties exist to secure responsible government and to execute the will of the people. From these great tasks both of the old parties have turned aside. Instead of instruments to promote the general welfare, they have become the tools of corrupt interests which use them impartially to serve their selfish purposes. Behind the ostensible government sits enthroned an invisible government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day.”*1912* platform of the Progressive Party, founded by former president Theodore Roosevelt

hannah's picture

...people dont want to know the truth. try telling anyone the 'truth' and they will call you a hateful cellar dwelling troll........so let them all eat shite.

CheapBastard's picture

But The Messiah said "the economy is strong" in his state of the disunion address? And the recovery?...yes "robust!"

Dubaibanker's picture

It is not even 10am EST, and 2 companies in USA have gone bust and a third one doesn't have USD 15m, but no mention on ZH. But a similar company goes bankrupt in China with USD 10m debt payment and it makes global headlines. Talk about bias!

U.S. petroleum firm Venoco files for bankruptcy

 

BRIEF-Terra Energy says its lender Canadian Western Bank demands $15.9 mln payment by Mar. 28

 

BRIEF-Texcal Energy Llc files for chapter 11 bankruptcy protection - court filing
Oldwood's picture

US oil company failures have already been "priced in". That's yesterday's news.

Dubaibanker's picture

Hmm...and China's defaults or other defaults are not priced in?  (Shocked)

I love the way America still thinks that the axis of planet Earth revolves in NYC! (LOL).

Oldwood's picture

I don't think America THINKS anything uniformly. Most here understand that China, along with every other delusional country and economic entity represent a clear and present danger. And the primary agent of this delusionary theme are BANKERS, the ones seeking a cut of every transaction no matter how fraudulent and corrupt. Their belief that profiting form the ignorance of others is an entitlement as righteous as any government redistribution drives all of this. And it is their belief in their absolute necessity and importance to the survival of our economy further justifies this behavior. As we have seen in our recent history where bankers and other financial movers and shakers KNOWINGLY sold shit to the public and government entities with virtually NO prosecutions much less indictments. And this is true around the world...not just America. The biggest criminals in the world are running US banks as well as the primary controlling agents in Europe.

LawsofPhysics's picture

Correct!  In fact, in the current monetary system bankers and financiers are nothing but overcompensated middlemen stuck between the printer/computer (where "money" is created without real work, real risk or real collateral) and the producer/consumer in the real economy.

Again, this is moral hazard on a scale the planet has never seen before.

chunga's picture

That's right Oldwood. The economy is all Fraud. Everything is ALL fraud.

If you wanna see the grip the bankers have on everything...watch this video out today expertly done by ZH'er Titus.

The Veneer of Justice in a Kingdom of Crime

https://www.youtube.com/watch?v=eHgbRYgpGGs

He does such a good job on these Tyler ought to give him a contributor account.

new game's picture

just watched the first half, excellent, thanks. a total house cleaning, nothing short of revolution as these taitors have become the enemy within. sad situation requiring a confrontation that will become violent, as adams warned of, hence the second ammendment.

STP's picture

I watched the whole thing.  Excellent video, well done and very telling on where we are at...(and it ain't a good place either...)

DuneCreature's picture

Good stuff.

Time to stop soft peddling the fraud. It has spread like cancer and will kill the host if not stopped SOON.

~ DC

MadVladtheconquerer's picture

And if not in NYC, then Wash DC?  Otherwise, where?  Certainly not in Raghead Central!

Karlus's picture

Its pretty clear the Fed is buying everything (read crude) or thru banks to mask it.

 

ISEEIT's picture

No shit.

The data analysis is retarded.

tarsubil's picture

The closest peers Kubota, which was flat revenues for 2015, and Komatsu, which had declining revenues for 2015, as far as I can see, haven't made up at all for ~$7 billion (that's close to a quarter of all Kubota and Komatsu's combined revenue) in lost CAT revenue.

2015 for CAT was below the average revenue going back a long ways before 2008.

The giant debt turd re-inflated in the US along side the giant new debt turd in China is finally shitting itself out.

There is no way to look at this and think things are okay or not really bad.

Bob's picture

Yet it sounds like CAT is the fat ass of the group . . . the one the bear catches. 

JRobby's picture

Ghost, Things are busy near you. Anomaly.

The "Jap brands" are actually Korean

If you plan to get out and about the country to do your research, I suggest you let the ether wear off first and leave it home.

roddy6667's picture

Last year I took a 2000 mile road trip by car around northern China. I know what I saw. I have 15 years construction experience. Keep your third hand experiences to yourself.
BTW, Komatsu is Japanese.

roddy6667's picture

I live in China where Komatsu dominates, working 24/7 in the world's biggest infrastructure boom. Japanese and Korean and domestic Chinese companies are laughing at this article. Americans are so parochial. Because their country has been going through a construction meltdown for a few years now, the silly Yanks believe the whole world is doing the same.

ParkAveFlasher's picture

You might have infrastructure, but we have Oprahstructure.

Nameshavebeenchangedtoprotecttheinnocent's picture

Ghost of -

 

Other major brands such as John Deere and Hitachi have had significant sales declines as well over the past 2 years.

hound dog vigilante's picture

...and leases?

CAT's business revolves around equipment LEASES, not SALES.  New & extended lease data would tell the story moreso than equip. sales data.

 

However, if the global equipment lease data is included/captured in these numbers, then CAT (and the rest of us) are truly in big trouble...

 

 

Obadiah's picture

Time to invest in earth moving equipment yet?

.... waaaaaiiiit  for it!

MFL8240's picture

Peddling fiction again!  Obama understand the economy, after all in the ghettos of Chicago as an agitator he was schooled by some of the best, Ayers, Wright et al!

knukles's picture

So, OK .... Here's the set up.  Exports from all over to the US are collapsing.... no matter what the MSM says, it means that the problem is not the exporting countries, but importing countries lack of (falling) demand.  Like the US.. It's bonafide indica of slowing, big time.
The CB's appear out of not only ammo but credibility, we being in the Liquidity Trap caused by non-monetary factors. 
Non-monetary factors (a la taxes, regulation, etc.) ain't gonna change, so no, no relief there.  Pushing on the string will do naught.
Housing high end demand seems to be softening as evidenced by sales in NYC, etc.  (Vancouver, et al are refuge money ... fuggedaboudit)
Interest rates are at or near zero, meaning no interest income generated for spending.
As cash flows dwindle in corporate land, capital spending is slowing....  Like with CAT, here, and it's been ongoing no spending for quite a while.  After all, CAT is a canary in a coal mine to a good extent.
No positives.
Anywhere

The only "thing" needed is the fuse lit to set off the catastrophe.  A Lehman type event and as Emril would say "BAM!!"
This is NOT Good

 

Plus, remember.  We're in a Liquidity Trap.  A monetary condition caused by non-monetary factors.  Do you see fiscal policy, regulation, etc., changing for the better?  Me neither, meaning the CB's influences are close to naught.   With respect to the real economy. 

thecondor's picture

And I'm just waiting for it to happen with my popcorn. 

BetterOffDead's picture

Wasn't CAT one of the most shorted stocks?

Curiously, this article was accompanied by a "Is it new or is it John Deere used?" ad. They seem to have a few in inventory, so they aren't taking business.

BlindMonkey's picture

Meanwhile, Russia keeps stacking gold.

two hoots's picture

 

For your reading pleasure:

As U.S. Ports Go, So Goes the U.S. Economy  (Bloomberg) 

 

“Los Angeles and Long Beach, the continent's two biggest gateways, reported the best February traffic in their histories going back more than a century. Total imports to the U.S. last month increased 27.4 percent from 2015, the most since 2010. Everything from furniture and electronics to apparel and machinery unloaded and distributed via Los Angeles surged 46.6 percent in February, the largest increase since February 2002. Long Beach traffic was up 44.7 percent in the same period, its biggest monthly gain since 2013.”

 

Full Article:  (Bloomberg)  http://www.bloombergview.com/articles/2016-03-18/as-u-s-ports-go-so-goes-the-u-s-economy

 

And

 

IMF's Lagarde Says Negative Rates Have Helped Global Economy (Bloomberg)

 

“If we had not had those negative rates, we would be in a much worse place today, with inflation probably lower than where it is, with growth probably lower than where we have it,” Lagarde said. “It was a good thing to actually implement those negative rates under the current circumstances.  (My add:  So what do you do after that last desperate act Christine?)

http://www.bloomberg.com/news/articles/2016-03-18/imf-s-lagarde-says-neg...

HardlyZero's picture

Interesting.

But since the shipping (Baltic Dry) rates are so so low now maybe its just the next step based on FSA (free shit army) demand.

 

Really I believe we are witnessing the Crack-Up Boom when there is no faith in the currency and business models, and many retail are scrambling for their big "final buy" while credit is available.  It is like the China empty city syndrome with businesses just grabbing the last closeout production runs, before it hits the shitter.

RopeADope's picture

Are they comparing to the container traffic last year during the longshoreman strike?

HardlyZero's picture

Could be...so it is really a false yr-yr comparison?  Last year the ships were backed up, up and down the California coast, waiting for berth.

 

Deal reached in West Coast dockworkers dispute 

9:32 a.m. EST February 21, 2015

http://www.usatoday.com/story/news/2015/02/20/west-coast-ports-dispute-u...


RedDwarf's picture

I agree with everything except your stance on non-monetary factors.  There is going to be changes in taxes and regulations.  Once the economy is fubar enough, the political will to actually make changes there will finally appear.