2015 results for CAPEX on the S&Ps from probably the best equity index analyst on the planet.
$SPX capital expenditures declined 2.8% in 2015, but ex-energy’s 26.7% decline the rest of the index is up 8.2% for the year
— Howard Silverblatt (@hsilverb) March 17, 2016
4 comments:
Be careful not to become complacent though. If you look at the upturn in Auto manufacturing, it has sort of become emblematic of the post 2008 rising from ashes recovery. But it is about to take a beating as the large sales years now have leases expiring, so the car companies are going to be trying to dump higher and higher number of used cars while still maintaining record sales volumes and keeping prices from falling. Impossible. We already know, given the unsustainable rise in credit use that drove the auto recovery, rates are low and terms have been extended to full vehicle life expectancy to get current margins and sales volumes with gps tracking devices enabling the longshot NINJA loans that have become commonplace. So it is going to end in tears for a few years. Germans are playing financial games by pretending they are selling vehicles at full price to show profits now, to only disappoint later with write downs in values later at their financial arms, with taxpayers/ecb likely on the hook. We can see the US companies back to their old tricks of dumping sedans at a loss to meet pollution standards, then cutting quality of sedans to be even less competitive to paper over their addiction to pickups and Stationwagons/Crossovers. Meanwhile GM is levering up their bailout money chasing rainbows hoping to beat apple/google/tesla/germany to self driving electric roadway infrastructure but can't deliver a profitable sedan to market now. Companies like GE that bought 10s of billion of oil service and oil tool companies when oil was 100+ a bbl with borrowed money, now those acquisitions are worth a fraction of what they paid, but not a peep from the accountants...yet on all that "goodwill". Knock on effects to the downturn have yet to spread and infect other industries. The unprecedented number of "unicorns" created in the last few years also smells suspicious as their value appears to have been inflated to dump on markets more than even usual, but with markets correcting, the charade is up and San Fran will be feeling it for the first time in years. Whenever we get Democrat/Tech execs writing things like this in the papers: “The wealthy working people have earned their right to live in the city,” he wrote in an open letter, adding: “I shouldn’t have to see the pain, struggle and despair of homeless people to and from my way to work every day.“ You know the credit boom/equity cycle is getting long in the tooth.
Good action in aircraft Ryan... guy from JetBlue said the other day that the US could actually support another major carrier right now... and the light trucks will probably go down with the oil.... but passenger cars should improve...
US govt spending over $4T annually it will go somewhere... just not as much to the oil monopoly rentier interests for now...
Post a Comment