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Cummins Going

Submitted by Tyler Durden on 07/10/2012 13:31 -0400

In yet another negative pre-announcement, following AMD, MAKO and AMAT (just to start, many more coming), Cummins (common bellwether among the talking-est heads) has just cut its revenue guidance dramatically. From expectations of a 10% jump in 2012 revenues, they have cut the full year to breakeven with 2011 now. S&P 500 futures dipped on this news and remain at the cliff's edge. CMI is down over 4% but thanks to a 25% boost in their dividend (makes perfect sense when cutting forecasts?) it's not more (yet - we expect more) - though this confirms some of the signals of increased leverage in credit land as cash piles get burned through just to support dividends or share prices.

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Tue, 07/10/2012 - 13:37 | 2602781 Conman

One day I will tell stories of the Bernanke Put to my great grand children. And they will not beleive me, calling me a old coot.

Tue, 07/10/2012 - 13:49 | 2602829 iDealMeat

ZH should zip up it's database and make it available for all of us to download and import on our own machines..

Research for our children.

Tue, 07/10/2012 - 20:37 | 2604192 PrintingPress

I'll compile and print up a book.

Tue, 07/10/2012 - 13:50 | 2602830 AcidRastaHead

As soon as you mention 'dollars' to them, they'd probably be confused.

Tue, 07/10/2012 - 13:54 | 2602846 FlyoverCountryS...

HOPEY-CHANGEY, SUCKAZ!!

How's all that Hope-N-Change bullschit working out for ya, now?

Tue, 07/10/2012 - 16:52 | 2603531 gina distrusts gov

"How's all that Hope-N-Change bullschit working out for ya, now?"

But But we did get change just because it was for the worse is not important the lying potus did not say the direction of the change he promised

Tue, 07/10/2012 - 13:55 | 2602850 drink or die

And then CPS (with a swat team) will show up and take them away.

Tue, 07/10/2012 - 14:04 | 2602872 The Big Ching-aso

Cummy would go bigtime green if they just announce a mega-fleet of D9's R headed 4 Detroit.

Tue, 07/10/2012 - 14:43 | 2603002 spine001

I hope that we all survive long enough to do that. Specially the educations sytem so that our great grandchildren can understand the sophisticated schemes these guys are using to screw people up.

People forget (not in ZH) that the economy is close to a zero sum game, so that when the financial sector went from 4% of GDP to 12%, the 8% came from somewhere, and surely not from the top 1%, making the impact of the wealth transfer even more pronounced.

Until next time,

Engineer

Tue, 07/10/2012 - 13:37 | 2602784 Cursive

How many months before they cut the dividend? I'll just say before year end.

Tue, 07/10/2012 - 13:38 | 2602789 zerozam

Not surprised - shipyard Nimbus in sweden defaulted a week ago.

Tue, 07/10/2012 - 13:39 | 2602791 zero19451945

We are in a dividend bubble. This is clearly the Fed's next bubble.

Tue, 07/10/2012 - 13:41 | 2602798 stormsailor

in this market, earnings mean nothing, betcha the /es closes green.

Tue, 07/10/2012 - 13:56 | 2602857 gjp

Yep, bouncing as we speak while they continue to sell gold. Because earnings mean nothing to equities, but everything to gold, of course.

Tue, 07/10/2012 - 13:48 | 2602824 sangell

Things must be going bad at GM too. Here is an auto ad put out by the Associated Press as a news story hyping Obama Motors and Ally banks new promotion.

http://www.sacbee.com/2012/07/10/4620773/chevy-offers-money-back-guarant...

Tue, 07/10/2012 - 13:55 | 2602849 i-dog

"The total U.S. auto market grew almost 15 percent from January through June."

It's heartening to see that the people are taking austerity seriously. We'll have this debt bubble licked in no time.....

Tue, 07/10/2012 - 14:27 | 2602938 diogeneslaertius

REALLY NICE GRAB/analysis

its a car commerical that looks like an article

in soviet america, car drvies you!

Tue, 07/10/2012 - 13:49 | 2602828 eclectic syncretist

Amazingly, there is still plenty of time to sell after this deluge of warnings that seem to be getting ignored so far. What can the Fed do? It can't lower interest rates any further. Quantitative easing has already been an abysmal failure, other than barely propping up the market, so another round would just emphasize their impotency even more. In any case it can't be done here at these market levels, for political reasons.

And the Fed will now have to issue much more credit than planned to the USgovernment. That has to be done first, before the banksters could get their throat saving cut.

Tue, 07/10/2012 - 15:03 | 2603054 spine001

What else can the FED do? They thought they could do a LOT more than what they've done. Especially B. Bernanke, but he didn't know the danger of feedback loop system in non-linear systems like the economy, see economists deal with this great complex unpredictable set of variables and create models to try to understand what is going on and give nobel prizes to each other. But the truth is that they don't know, nor have they ever been educated to understand or model the behaviour of a simple industrial plant with its miriads of looping control systems, sensors, feedback loops, etc. If they had they'd know the dangers of oscillatory behaviours.

But luckily for us, somebody at the FOMC, has recently discovered (something that is obvious to any control engineer) that when they keep on doing QEs, they are increasing the gain of the feedback loops, risking financial instability (oscillatory behavior). What we control engineers know very well is that if one of this oscillatory behaviors installs itself in the plant under control, we are screwed, we need to stop the plant or everything goes to hell. We install thousands of switches and stops to stop the processes at risk to prevent this situation, and despite this it is an everyday battle to keep everything under control.

But that can't be done in the real economy, once this oscillatory behaviors start taking control there is nothing you can do to stop them. They will overpower any intervention. Lets hope that this technocrat at the FOMC is heard and that his predictions overrule the political necessities of team Obama. If not more QE will be released and the danger of "resonance" will rise again. This forces are tremendously destructive and we are on the edge.

So, lets hope that B. Bernanke agrees with your assessment that there is not much else they can do, because you are indeed CORRECT. And that the FOMC doesn't subject the world to the most dangerous monetary experiment of all time.

Remember sovereigns in the past made pretty huge messes (Weinmar Republic, Argentina in the 1970s, etc.), and they were limited by the printing press, there is NO such limit nowadays).

Until next time,

Engineer

Tue, 07/10/2012 - 13:53 | 2602844 oklaboy