{"id":14583,"date":"2015-11-20T07:55:49","date_gmt":"2015-11-20T12:55:49","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14583"},"modified":"2015-11-20T07:55:49","modified_gmt":"2015-11-20T12:55:49","slug":"it-is-different-this-time-now-comes-the-global-capex-depression","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14583","title":{"rendered":"It Is Different This Time\u2014\u2014\u2013Now Comes The Global CapEx Depression"},"content":{"rendered":"

It Is Different This Time\u2014\u2014\u2013Now Comes The Global CapEx Depression<\/a><\/h3>\n

Caterpillar (CAT)\u00a0posted a disastrous\u00a016% decline in worldwide retail sales this morning,\u00a0meaning that its sales\u00a0have now fallen for 35\u00a0straight months. As\u00a0Zero Hedge<\/strong>\u00a0<\/em>noted, not only did US\u00a0retail sales finally rollover and drop by 8% compared to prior year, but the rest of the world was a veritable\u00a0bath of yellow blood:<\/p>\n

\u2026\u2026..\u00a0sales elsewhere around the globe were a complete debacle: Asia\/Pacific (mostly China) was down -28%, a dramatic drop from the -17% a month ago, EAME dropping -13%, and Latin America down -36%\u2026<\/strong><\/em><\/p><\/blockquote>\n

\"\"<\/a><\/p>\n

Needless to say, this is something new under the sun. CAT is the leading\u00a0heavy capital goods supplier to the global construction and mining industries\u00a0and has a long history of boom and bust.<\/p>\n

But CAT\u2019s past contains\u00a0nothing like what is conveyed in the graph below. The current 35 month plunge in its global sales is\u00a0now nearly twice as long<\/strong>\u00a0<\/em>as the downturn in sales during the Great Recession, which was itself a modern record.<\/p>\n

\"\"<\/strong><\/a><\/p>\n

Indeed, CAT\u2019s sales during the quarter ended in September had retraced all the way back to the September quarter of 2006. It is as if the massive tide of global capital spending that\u00a0CAT\u00a0has been riding\u00a0for well\u00a0more than a decade\u00a0is heading back out to sea.
\n\"CAT<\/a><\/p>\n

CAT Revenue (Quarterly)<\/a>\u00a0data by\u00a0YCharts<\/a><\/p>\n

In fact, it is. The flip-side of the massive commodities boom since\u00a0the turn of the century is CapEx.<\/p>\n

That is, the tremendous increase in demand for iron ore, copper, zinc, nickel, aluminum and hydrocarbons\u00a0was mainly driven by a massive one-time\u00a0build-out of industrial infrastructure for mining, manufacturing, transportation and distribution\u2014\u2013along with related\u00a0public\u00a0facilities such as\u00a0roads, bridges, ports,\u00a0rails and airports\u2014-\u00a0in China and the EM.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

It Is Different This Time\u2014\u2014\u2013Now Comes The Global CapEx Depression Caterpillar (CAT)\u00a0posted a disastrous\u00a016% decline in worldwide retail sales this morning,\u00a0meaning that its sales\u00a0have now fallen for 35\u00a0straight months. As\u00a0Zero Hedge\u00a0noted, not only did US\u00a0retail sales finally rollover and drop by 8% compared to prior year, but the rest of the world was a veritable\u00a0bath […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[89,2661,10673,5939,3598,2120,10675,10674],"class_list":["post-14583","post","type-post","status-publish","format-standard","hentry","category-economics","tag-boom-and-bust","tag-capex","tag-cat","tag-caterpillar","tag-contra-corner","tag-david-stockman","tag-global-construction","tag-heavy-capital-goods"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14583"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14583\/revisions"}],"predecessor-version":[{"id":14584,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14583\/revisions\/14584"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}