Guess the Company

"We continue to see remarkable growth outside of the United States with particular strength in key industries like mining, oil and gas, electric power and marine engines."

"The company's non-U.S. outlook was upbeat, but its view on the domestic economy was anything but. This year, machinery and engines sales outside North America are expected to be up 25% from 2006, or about $4.6 billion. At the same time, XXX is expecting a $2.5 billion, or 12%, decline in North America.

"Many U.S. industries important to our sales are in recession," Cat said. "Through the first nine months of this year, housing starts were down 26%, and we expect housing starts for the full year 2007 to be 1.4 million. Nonmetals mining and quarrying is down 18%; coal mining, 4%; nonresidential construction contracting, more than 2%; and freight movements, 2%. We expect further deterioration in most of these industries in the fourth quarter."

"The weak economy will encourage the [Federal Reserve] to reduce interest rates further," it said. "Our outlook reflects U.S. housing, nonresidential contracting and quarrying declining further. For the major U.S. machinery end markets, only coal mining shows a reasonable possibility of improvement from 2007."

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Answer: This pretty much describes most US multinationals. Folks, the 'experts' still don't get how intertwined housing is within the fabric of the economy - I still hear the song and dance about "it's only 5% of GDP". But when construction jobs are lost, when mortgage jobs are lost, those are all families - all families who eat, get their hair cut, get their nails done, get "service ABCD" done - and we are now transforming to a service economy. The majority of our economy is based on circulating dollars amongst ourselves - yes we still have imports but its among a smaller % of companies. So when people pull back on services due to job losses and feeling 'poorer' due to their houses, that affects a lot more than 5% of our economy.

Anyhow the answer is Caterpillar (CAT) - and it doesn't bode well for our economy. I don't listen to these faulty government reports - listen to what the companies are saying. Listen especially to what the trucking (and other transport) companies are saying - they see slowdowns first and all through this rally off the Fed cut, the transports have not confirmed the move up.

I guess this type of data bodes well for the investor class (to some degree). But for the bread and butter 'working class' in this country, things are looking more dire by the week. I can only imagine these results a decade ago when international sales made up a lot less of multinationals sales. Where would we be? Where would the stock market be? Now the chicken and egg question is, how much of international growth is (still) based off US consumption versus their own middle class/internal growth. Certainly much more is based off the latter vs a decade ago or even 5 years ago. But can the world growth continue unabated with prospects for a recession in USA? And for how long?

By the way per RealMoney.com Tony Crescenzi, the futures market was pricing in a 38% chance of a cut in interests rate this Halloween, on Tuesday. 2 days later (yesterday) it was up to 70%. Where have you guys been? I really think these guys who trade are sometimes so insulated in their high net worth world they don't see what is going on in the real world. 2 Americas right Mr. Edwards? I said 100% chance of cut and the drumbeat for cuts would be pounding in the minutes after the last 50 basis point cut, and I stick by it.