Dr Copper
Posted on 01/27/2015 7:35:52 AM PST by blam
Myles Udland
January 27, 2015
It is officially a horrible morning for the economy.
After the global manufacturing giant Caterpillar had poor fourth-quarter results and gave a gloomy outlook for 2015, economic data from the US has added to more bad news for the economy Tuesday morning.
Durable goods orders were a HUGE miss, declining 3.4% against expectations for a 0.3% increase.
Durable goods orders excluding defense and transportation orders, referred to as "core" capex, declined 0.6% in December.
Last month's numbers were also revised sharply lower, with November's orders revised down to -2.1% from a prior number of -0.7%.
Following these results, Dow futures were extending their losses, falling by as many as 300 points, while S&P 500 futures were down 27 points, and Nasdaq futures were down 66 points.
(snip)
(Excerpt) Read more at businessinsider.com ...
The US Economy Continues To Look Stronger And Stronger
The DJIA is down 334 as I post.
I bought a set of arrows and a bow from what I have saved on gasoline already this year.
Dr Copper
Caterpillar and other Dow companies are hit by the strong dollar and poor overseas sales. The relative strength of the US economy is itself causing some of their problems.
Given your "reasoning," the dow would never move, and we'd never have depressions or booms.
for later
Not to mention the humongous IBM layoffs and other employee reductions already announced to take effect almost immediately.
“A report in Forbes on Thursday said the company was preparing to cut its workforce by 26%, which would amount to the largest workforce reductions in IBM’s history and affect more than 100,000 employees.”
http://www.wsj.com/articles/ibm-dismisses-report-of-massive-layoffs-1422289059
Acceleration in the decline in copper is not good.
Negative interest rates on bank deposits isn’t good news either.
There's no sense trying to predict when the global mess will collapse under its own weight. The more finagling goes on, the worse that collapse is going to be.
The DOW is now down 387. At what point do they suspend trading? Gold and silver are trending upward.
“A report in Forbes on Thursday said the company was preparing to cut its workforce by 26%, which would amount to the largest workforce reductions in IBM’s history and affect more than 100,000 employees.”
Yes, but ironically this move will likely make IBM stock go up.
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The strong dollar makes outsourcing even more attractive.
But.....but.....the Era of Crisis is over. Bammy said so last week.
Even with the printing presses running at full speed, and very minimal interest rates on money put out at interest, the world is suffering from a spate of DEFLATION, too few dollars chasing too many goods and services, goods and services which are just piling up in inventory at businesses which must soon either discount heavily, or close their doors. Even if they do close their doors, and the inventory is sold at a vast discount, it remains unsold to the ultimate consumer because of not just stagnant demand, but no demand at all.
The velocity of transfers of money has fallen a good deal, the pie is SHRINKING.
Wait! It's only been a week or so since 0bama's propaganda bureau was crowing about lower unemployment and how the economy was growing! That can't be wrong, can it? /sarc
...services, goods and services which are just piling up in inventory at businesses which must soon either discount heavily, or close their doors. Even if they do close their doors, and the inventory is sold at a vast discount, it remains unsold to the ultimate consumer because of not just stagnant demand, but no demand at all.
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Agreed. And yet, how often is the positive economic report based on “climbing inventories”? That measures expectations and the negative report is always preceded by *unexpected*.
Nothing works. Nothing makes sense. Mandated taxes are reported as *growth in consumer spending*.
One quibble: how can one have an *inventory* of services? Services=time. Each service provider has so much time available vs.so many clients. The only way services can be *stockpiled* as *inventory* is when the number of clients declines versus the providers’ available time to deliver them. When that happens, fees must be cut. Therefore, an increased inventory of services equals less economic activity due to a declining market.
True. In fact that is probably one of the main reasons for the cutbacks.
But it certainly won't help the employment/unemployment ratio in the US, although not all of the layoffs are domestic.
Now extend the same thinking to cars, clothing, machine tools, presses, whatever you like.
And so a deflationary contraction begins. Dropping prices look good on the surface but if you build dirt moving equipment not so much.
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