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Caterpillar: Microcosm of the un-Recovery

As we await the president’s latest State of the Union Address, expect to hear him take credit for the momentum-gathering economic recovery. Then if you will take a look behind the Emerald Curtain to find the truth.

As we’ve gone over many times before, in simplest terms the Fed through its Quantitative Easing, (creating money out of thin air) purchases Bonds and Mortgage-Backed Securities to artificially suppress interest rates and boost asset prices. In other words, “All eyes on the stock market!”

Yesterday’s news regarding Caterpillar is a perfect example of how the establishment, aka: government officials in step with the corporate mainstream media spin and massage numbers to create their illusions.

After seeing the real numbers and knowing the facts, the soundbite-clip below will make you laugh and cry.

The headlines from CNBC were as follows:

Caterpillar posts stronger-than-expected fourth-quarter profit

Caterpillar posted a stronger-than-expected quarterly profit on Monday as the world’s largest mining and construction equipment company aggressively cut costs to offset continued sluggish sales of its earth-moving equipment.

The results sent the company’s shares up 6.1 percent to $91.40 in early electronic trading on the New York Stock Exchange.

The whole Recovery Story has been about stock prices and the so-called wealth effect.

But a deeper dig into the story reveals the real facts behind the earnings.

Caterpillar (CAT) Slashing Jobs, Closing Plants Across The World As Equipment Demands From Global Mining Industry Drops

Caterpillar Inc. (NYSE:CAT) has laid off about 13,000 employees, roughly 10 percent of its workforce, over the past year and expects to cut several hundred more U.S. jobs as it struggles with plunging heavy-equipment demand from the global mining industry.

The Peoria, Ill., company’s most recent layoff announcement is that its Pulaski, Va., coal hauler plant will close next year, with the loss of 240 jobs. And a mining equipment plant in Kilgore, Texas, is expected to lay off 100 workers in the coming months.

Among Caterpillar layoffs already completed are the dismissal of 115 workers in South Milwaukee, Wis.; 125 workers at the company’s Large Engine Center in Lafayette, Ind.; 800 jobs at a mining equipment plant in Decatur, Ill.; 280 positions from a recycled transmission plant in South Carolina; and 1,400 jobs at an excavator plant in Belgium. Other layoffs have occurred in Beckley, W.Va., Tazewell, Va., and Sudbury, Ontario.

Caterpillar reported third-quarter profits of $946 million, or $1.45 a share, down from $1.7 billion, or $2.54 a share, one year earlier. Overall, that represents a 44 percent decline in profit. Sales to Cat dealers dropped by nearly $1.5 billion, $3.5 billion lower than at the end of 2012.

Adding to the company’s woes, federal investigators are now probing a Cat subsidiary for allegedly throwing parts of its trains into the sea so it could claim damages from rail network owners.

• source: International Business Times

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Caterpillar Global Sales Down 12%, Crushes Recovery Hopes With Negative Sales Around The World

Among other things, the month of November was memorable because for the first time, Caterpillar – that bellwether of the old industrial economy – posted declining retail sales in every region around the globe. This was the first time of uniform declining retail sales since February 2010. To say that this data conflicts massively with all the rumors, fairytales and lies about a global recovery, is an understatement which is why it has not been mentioned anywhere, in hopes the subsequent month would demonstrate some improvement and perhaps an upward inflection point. That did not happen.

But at least the Fed is tapering because it is convinced the global economy is finally recovering…

• source: zerohedge.com

For The First Time In Four Years Caterpillar Posts Negative Retail Sales Across The Board

All “recovery watchers” are urged to look somewhere else than the just released monthly Caterpillar dealer retail sales. Because while in September there was some hope that North American industrial demand may finally be picking up when retail sales on the continent posted the first two month sequential increase since 2012 even as the rest of the world was stuck deep in negative territory.

Unfortunately while North American sales just rejected any glimmer of a localized recovery, the rest of the world just keeps getting worse and worse, with negative sales prints across the board for every region – the first time this has happened since February 2010.

• source: zerohedge.com

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One comment on “Caterpillar: Microcosm of the un-Recovery

  1. […] highlighted in an earlier post: Caterpillar: Microcosm of the un-Recovery Caterpillar can once again give a snapshot of the overall state of economic […]

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