Global depression?

[Digga]

Whilst the UK economy gives the appearance of health right now, it's not hard to avoid the negative news; Euroland, China, Russia, even the USA is moribund at best, let alone other smaller economies like Australia (the next Greece?).

Just thinking about this again because of this piece:
http://www.zerohedge.com/news/2015-07-22/forget-re...

I do wonder whether there's going to have to be QE all round, or even some sort of debt jubilee.

[gofasterrosssco]

So CAT seems to think there's a global depression because people in certain parts of the world are buying less diggers? And buying patterns may have changed..

Seems a bit extreme.

[Bluebarge]

Fancy someone with a username like yours unearthing this nugget

Construction equipment orders (and lack of demand therefor) is usually a good indicator of trouble ahead, as are shipping rates. Don't know what shipping rates are currently doing but, with the exception of the US, which is doing "ok" it is hard to see where the global demand is going to come from, given China's troubles.

Problem is, QE has already been deployed, so hard to see what could be done to combat the next downturn. A debt jubilee might be the radical solution that would work. Schauble would love that.

[joscal]

I'm sure the Chinese manufacturer's like Sany, Liugong and the many many others are more to do with Cats decline. The Chinese are getting there quality wise and prices are seriously competitive.

A friend of mine has the Liugong agency for Australasia and he is doing rather well for himself to say the least!

Without trying to sound like a know it all I have another friend who is in the mining industry in both Australia and China and it has slowed down and prices are low but it couldn't go on forever.

I could of course be completely wrong! Certainly wouldn't be the first time.

Edited by joscal on Wednesday 22 July 15:38

[Digga]

None of the Chinese yet make the big mining kit, IMHO it is this which is hitting CAT hardest; significantly lower volumes on significantly large-budget items. Reading the article, it's more about how the buyback (lease) obligations are at odds with the share price, but it did bring me back to the theme of the OP that I've been pondering for a while.

The post is not so much about that article or CAT, as the reasons behind those stats.

[DJRC]

Digga, there is about as much chance of a global Depression in the next two yrs as there is of me losing two stone before Xmas.

[Pistom]

DJRC said:

Digga, there is about as much chance of a global Depression in the next two yrs as there is of me losing two stone before Xmas.

Bookmarked! And I don't mean the two stone before Christmas.

[Welshbeef]

There will always be cycles no way of stopping that - instead make sure you and your family are best placed to adapt and/or weather the storm with little if any impact to your lifestyle.

[davepoth]

It was a bubble, and a pretty classic one at that. Lots of small and naive investors borrowing money to invest in an already massively over-valued market was always going to be a recipe for disaster.

[Welshbeef]

davepoth said:

It was a bubble, and a pretty classic one at that. Lots of small and naive investors borrowing money to invest in an already massively over-valued market was always going to be a recipe for disaster.

Good god I thought margin calls were illegal - maybe only in Western stock exchanges.

[SPS]

gofasterrosssco said:

So CAT seems to think there's a global depression because people in certain parts of the world are buying less diggers? And buying patterns may have changed..

Seems a bit extreme.

Obviously buying from JCB instead

[Digga]

anonymous said:

[redacted]

^This, and the 'ghost cities' etc. etc.

anonymous said:

[redacted]

I'm afraid that's my concern too.

anonymous said:

[redacted]

JCB make nothing 'big' in terms of mining. Biggest excavator is 50 tonnes which, in UK bulk-earthmoving might be considered reasonably large, but in mining it's like a knife at a gunfight: https://www.youtube.com/watch?v=AMZeNUn_DEw

I think even the likes of Komatsu and Hitachi are seeing a slowdown.

I enjoy debate and discussion, but I'm not sure where DJRC gets his optimism; would genuinely like to know.

[Digga]

5ohmustang said:

Here in the U.S. the general attitude is that the hard times are over.


We are experiencing a false recovery, riding a wave of stimulus that has kept the global economy on life support.


Sooner or later the sheeple will wake up.

Global economic collapse is coming.

Good article on how the greenback is trading at 10yr highs: http://www.zerohedge.com/news/2015-07-22/peter-sch...

Tends to support what you're saying.

[Smollet]

One day the doom and gloom merchants here will get their wish. Talk a market down and it generally happens.

[The Don of Croy]

The CAT picture painted in the article is poor...looking at Sandvik (more hardcore mining?) they're flatlining (and not sounding too bullish about outlook either).

Anecdotally my colleagues in USA supplying the construction industry are busier than at any time since 2008/2009. But still some way off the peak.

[5ohmustang]

This sums it up.
http://youtu.be/Awv8dySZaHE

Edited by 5ohmustang on Thursday 23 July 12:54

[Digga]

anonymous said:

[redacted]

The Tescos of the plant hire industry. I have no evidence to back up my hunch, but (like Speedy plc recently) I would not be at all surprised if the real problems weren't cleverly buried in a Machiavellian web of rebates and discounts.

[JagLover]

In terms of the situation in China

http://www.telegraph.co.uk/finance/economics/11756...

[Digga]

JagLover said:

In terms of the situation in China

http://www.telegraph.co.uk/finance/economics/11756...

Globally, this is critical.

Not least in economic terms, but also politically; IMHO there is far more risk here than with Russia.

[fido]

I'm hoping they keep the bubble going for a few more days - having trouble getting my CFD account working! Wondering what's the best indirect trade to make - short oil or global equities.