Caterpillar Inc. (CAT) reported third quarter earnings of 64 cents per share, well above the Zacks Consensus Estimate of 7 cents per share. The company’s better-than-expected performance was primarily driven by higher price realization, lower SG&A and R&D costs, and inventory decrement benefits. However, on a year-over-year basis the company’s EPS declined 54.0%. Revenue in the quarter was down 43.8% to $7.3 billion from $13.0 billion posted last year. The sales decline in the quarter constituted lower machinery sales volume (-$4.2 billion), lower Engines sales volume (-$1.5 billion), negative impact of foreign currency translation (-$138 million), lower financial products revenue (-$118 million), partially offset by higher price realization (+$227 million). The company witnessed revenue weakness across its end markets. The Machinery Group revenue was down 52%, while the Engines segment and Financial Products segment have reported revenue declines of 35% and 14% respectively. This was due ...

 In a recent regulatory filing, Caterpillar Inc. (CAT)  announced its plans to increase prices by up to 2% worldwide on most of its  machinery effective January 2010. The company attributed this price increase to current industry factors and current and expected general  economic conditions.    This indicates the company’s optimism about demand improvement next year.  Caterpillar had earlier indicated that there was already an improvement in  industrial production growth and increase in commercial and residential  building sales in China. The company stated that the country’s economic  growth has rebounded in the second quarter. Caterpillar believes that the government stimulus package, along with the reduced interest rates, will drive the Chinese economic growth.    Apart from China, Caterpillar sees demand potential for its products in  other developing as well as developed countries. Given the need for basic  infrastructure globally, Caterpillar is confident of capitalizing on the economic recovery. Being ...

In our history, the American nation committed obvious sins against select groups of people, and we’ve paid bitterly for some of that. But now it’s our sins against the land itself that threaten to sink the USA as a viable enterprise.

It’s odd, that in his otherwise excellent blow-by-blow account (”Eight Days,” in the Sept 21 New Yorker Magazine) of the September 2008 Wall Street meltdown that left Lehman dead, and AIG croaking in a ditch, and the banking system in general functionally crippled, reporter James B. Stewart never got around to really describing the cause of it all — namely, the on-the-ground material catastrophe of American suburbia.

It was the worthlessness of the tradable securitized debt associated with all those overpriced (and overvalued) chipboard and vinyl houses, smeared recklessly over the American landscape, that started all the trouble in the first place. And it is our inability to come to

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U.S. stocks fell on Monday as a resurgent U.S. dollar took a toll on commodity prices and investors paused to gauge if the outlook for corporate profits justified the market’s recent run to 11-month highs.

Caterpillar Inc , down 2.5 percent, was among the top drags after the maker of bulldozers, excavators and other products said worldwide August sales of machinery to dealerships fell.

Crude oil futures shed 3.5 percent to $69.48 a barrel and spot gold prices dropped below $1,000 an ounce. The S&P materials <.GSPM> index fell nearly 2 percent.

Shares of Exxon Mobil Corp declined 1 percent to $69.26, while gold miner Newmont Mining Corp shed 3.1 percent to $43.55.

The Dow Jones industrial average <.DJI> lost 55.85 points, or 0.57 percent, to 9,764.35. The Standard & Poor’s 500 Index <.SPX> declined 6.64 points, or 0.62 percent, to 1,061.66. The Nasdaq Composite Index <.IXIC> dipped 6.77 points, or 0.32 percent, to 2,126.09.

The Nasdaq’s losses were curbed

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The VDMA Group (an industrial association in Europe, representing small/medium sized companies in the engineering industry) said last week that German machinery producers do not expect an increase in output in 2010. The group said that more than two-thirds of producers in Germany are complaining about lack of orders. The VDMA group forecasts a 20% year-over-year drop in machinery and factory equipment output for 2009 due to weak orders. For 2010, the group forecasts similar production levels as 2009. According to the recent data released by the group, machinery and equipment orders for the month of July fell 43% compared to last year. Domestic demand was down 41%, while international orders declined 44% for the month. The industry’s production capacity stood at just 69% in July. However, Germany, the world’s largest exporter, is witnessing improved order levels from developing economies, particularly China. According to VDMA, China ...

The governor of Connecticut has offered $100 million worth of incentives to jet engine manufacturer Pratt & Whitney, a United Technologies Corporation (UTX) company, to prevent the possible loss of 1,000 jobs. The five-year plan includes lifting a cap on tax credits for the parent company, providing training assistance and establishing a job retention tax credit. It also includes investments in machinery and equipment and the building of an Engineering Center for Excellence for engineers at Pratt & Whitney and other aerospace companies. The state has joined hands with the International Association of Machinists, which represents 3,700 workers and has been negotiating with Pratt & Whitney for weeks in an attempt to retain existing jobs. The Machinists offered $63 million in annual cost reduction, including reduced overtime, to help save jobs. Pratt & Whitney has been affected by the steep decline in the commercial airline ...

Much pomp and circumstance was certainly made in relation to the fact that Japan actually grew in the second quarter at a full annualized 3.7 percent in the second quarter of 2009. Yet, the underlying numbers to suggest a recovery are still sorely missing. Deflation now seem to have taken hold, unemployment is rising fast and although the recent manufacturing PMI provided us with an upbeat signal, the underlying trend still is still that of a very tepid recover, if at all, or just a plain slump.

(quote Bloomberg)

Japanese businesses cut spending for a ninth quarter as the global recession squeezed profits, underscoring the challenge for the incoming government to sustain a recovery from the country’s worst postwar slump. Capital spending excluding software fell 22.2 percent in the three months ended June 30 from a year earlier, after dropping a record 25.4

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The Federal Trade Commission (FTC) recently granted antitrust clearance to Arch Coal (ACI) for its pending acquisition of Rio Tinto’s (RTP) Jacobs Ranch mine in the Powder River Basin of Wyoming. Arch expects to close the deal within six weeks.

Earlier in March, Arch announced its intention to buy the mine for $761 million. It will gain control of almost 381 million tons of high-grade, low-cost coal reserves adjacent to its Black Thunder mine. The company will also receive a high-speed rail load-out, an overland conveyor, a near-pit crushing system and an expansive fleet of highly efficient mining machinery. All these will provide Arch with several operating synergies that will create substantial value for it shareholders going forward.

Although the company’s sales and profits tumbled during the first half of the year, we remain optimistic about its long-term potential. Arch continues with its efforts to bring down

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John Fernald and Kyle Matoba of the San Francisco Fed have just released a utilization adjusted total factor productivity series. The importance of this development is clearly laid out by the authors:

This Economic Letter looks at potential output from the perspective of growth accounting, which assesses some of the key supply-side factors determining sustainable, noninflationary potential output. Perhaps most importantly, we find that the underlying pace of efficiency improvements -- "technological progress," broadly construed—has remained strong during the recession. This strength offers a reason for cautious optimism about potential output and the long-term health of the American economy. More immediately, stronger potential relative to the same observed output implies substantial slack in the economy.

Essentially, the authors have accounted for the fact that the utilization rate of the factors of production change over the business cycle. Succintly put:

Firms, for example, may hesitate to fire skilled workers they will need once the economy

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 Goldman Sachs Would Have Collapsed If Not For Henry Paulson.

The Dow slipped a bit yesterday – only 39 points. Everyone is watching. They want to see how far this rally carries on. Many think it is more than a bear market bounce; they think it is for real.

The prevailing opinion is that quick action by the feds avoided a more serious meltdown. Ben Bernanke says he was working to prevent a “second great depression.”

And now that the crisis is past, the economy is slowly climbing out of its hole. The second quarter showed GDP falling at 1% per year in the US… rather than the 6.4% rate recorded earlier in the year. Housing sales have perked up. Oil is trading above $71 – a sign of renewed economic activity. And gold seems to be getting ready for another assault on the $1,000 mark – a sign of growing inflation pressures.

At

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