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alstry (35.58)

Some Monkey Business....Is 20% the magic number?

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July 28, 2009 – Comments (7)

Company after company is reporting sales drops around 20% or more. 

Office Depot Inc. evenue fell 22 percent to $2.82 billion from $3.61 billion last year.

The company is closing about 9 percent of its North American stores and cutting 2,200 jobs.

http://finance.yahoo.com/news/Office-Depot-reports-apf-1050816571.html?x=0&.v=1

In some cases much more than 20%.

U.S. Steel Q2 net sales $2.13B vs $6.74B

Paccar Q2 revenue $1.85 bln vs $4.11 bln

If practically every company is reporting such massive revenue declines, and GDP contraction at only 7% and unemployment at only 9.5%, one would think we are not even close to the bottom yet.

Again, how can Economists forecast improvement when business after business, and those businesses that service business, are reporting such massive contraction in revenues?

Does anyone think there is some monkey business going on?

Textron said revenue fell 29% to $2.61 billion, due in part to a sharp decline in sales of Cessna business jets and industrial products.

Interpublic Group net off 71%, revenue down 20%

Rockwell Automation revenue slumped to $1 billion, down 31% from $1.48 billion.

And some people say the recession is over???  Are they bananas?

 

7 Comments – Post Your Own

#1) On July 28, 2009 at 9:08 AM, alstry (35.58) wrote:

Now its happening to ENTIRE economies......

July 28 (Bloomberg) -- Lithuania’s economy plunged a preliminary 22.4 percent in the second quarter, the worst recession since 1990 independence, as output crashed and retail sales slumped.

Zombulator running at full speed.

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#2) On July 28, 2009 at 10:59 AM, OneLegged (< 20) wrote:

I brought this idea up in a comment to one of your blogs weeks ago.

 

I simply cannot be the case that shipped-goods are down as much as they are and unemployment is as high as it is and the GDP is only down a few percent.  Companies certainly did not suddenly become so efficient that with tons of layoffs and fuloughs that they can still produce WELL over 90% of the same capacity.   Never mind being able to sell these goods to people who are out of work or have had their pay cut or are affraid of spending money  due to imminent loss of work at full price. Something definitely stinks with the GDP figures that are being waved about. 

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#3) On July 28, 2009 at 11:08 AM, debtRichQuick (< 20) wrote:

Do you have a way you are totalling corporate revenue? It seems like there are too many variables to be able to say if all corporate revenues decline 20% then GDP should decline by ~14%.

 

It is also hard to figure out the relativity in the whole thing. What part of their revenue is US based, what % of the decline is foreign demand. Are their there companies taking market share, etc. Too many things to look at it straight across. I do however understand your point. 

I'm not sure I understand your 9.09 prediction, but I have been around long enough to know, you like setting dates.  

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#4) On July 28, 2009 at 11:20 AM, alstry (35.58) wrote:

debt,

GDP calculations are as goofy as the calculate unemployment with birth/death adjustments.

 

If imports crash 35% and exports only crash 25%, it has a positive impact on GDP.

 

In our world, America is simply shutting down.  Sales are evapororting.  Profits are imploding.  Businesses shuttering.  Unemployment and wage cuts skyrocketing.  Government tax receipts contracting and cutting dramatically.

 

Yet Economists talk about Green Shoots?  What can make an entire discipline by so F*^king wrong about something so easy to see?

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#5) On July 28, 2009 at 11:27 AM, minduza (< 20) wrote:

cha cha, I'm lithuanian. It's bad here, our goverment did not devalue our currency, we couldn't print any money. If same thing was in US, Americas GDP would be down 15 - 20% too. We're losing jobs as crazy. Everything started from Lethmans collapse.

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#6) On July 28, 2009 at 11:29 AM, OneLegged (< 20) wrote:

All the "mainstream" news seems so surreal.  I have no explanation.

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#7) On July 28, 2009 at 11:33 AM, OneLegged (< 20) wrote:

Despite all the continuing news about "green shoots" and "...as the economy contiues to claw its way out of this recession"........

 

http://news.yahoo.com/s/ap/20090728/ap_on_re_us/us_economy 

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