Atlas shrugged? Manufacturing seems worn out

Market Watch ^ | Aug 19, 2012 | Greg Robb

[KeyLargo]

Economic Preview

Aug. 19, 2012, 12:02 a.m. EDT

Atlas shrugged? Manufacturing seems worn out

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — There are signs that the manufacturing sector, which has led the economic recovery, is about to take a breather.

“It seems like the [factory] sector is stuck in neutral,” said Guy Berger, an economist at RBS in New York.

Several factors appear to be at work, economists said. Smurfit-Stone Container Corporation’s facility in Coshocton, Ohio.

Weakness in the global economy is cutting back exports. And factory owners are uncertain about how the outcome of the November election and what it means for taxes and government largesse.

“Japan is going nowhere, Europe is in recession, and we’ve got our own problems,” such as stalemate over tax policy and government spending, said Josh Shapiro, chief U.S. economist with MFR Inc.

Shapiro is concerned that there are no obvious heirs-apparent waiting in the wings to pick up the slack and propel the economy forward.

Housing seems to finally in recovery mode but it seems doubtful it can pick up the load.

Without an obvious source of strength, Shapiro sees a 50% chance of a recession in the next 12 months.

“I think things are more dangerous than a lot of other economists think,” Shapiro said.

Another economist forecasting a high probability of a recession in the next year is Chad Moutray, chief economist for the National Association of Manufacturers, the trade group for the factory sector.

[KeyLargo]

[ClearCase_guy]

the manufacturing sector, which has led the economic recovery

I guess I missed all that. I must have been busy watching "American Idol".

[bmwcyle]

It does not help that the money that is in economy is worthless. Oil and metals are the becoming the of value. The only way things continue is if money if worth an exchange for like value. The other side of the equal sign is headed for the value of constant zero.

[RayChuang88]

American businesses are NOT liking the direction that President Obama is taking the country, and that's why they are right now spending their time hoarding liquid assets out of fear of increased cost of taxation and regulation. If Romney is elected President, watch a GIGANTIC jump in economic activity as American companies are freed from many of the silly rules Obama instituted.

[unixfox]

And...it’s about to take a “breather”

I guess that would be because its been on a treadmill for so long.

[Minutemen]

Manufacturing? What manufacturing? ...in USA? Every thing is made in China now.

[yldstrk]

Frankly we have more than enough stuff. We have stuff coming out of our ears. What is there a shortage of? What needs to be manufactured? People are sick of the throw away society and are keeping their stuff.

Now, at one point, there was a shortage of tanks for storing oil.........

[MarkL]

Dear Mr President,

Please tell me more about the businesses the owners didn’t build, the greedy bankers, and the greedy doctors who would rather do surgical procedures that cure someone because it pays more.

Now tell me about Solyndra & the UAW bailout, MF Global and the DoJ decision not to seek prosecution, and the waivers granted to those thousand or so favorites of the regime that gets them out of Obamacare.

Oh, and let’s not forget fast & furious, the dead federal agents, and the pile of 300 or so dead innocent Mexican citizens your international weapons trafficking resulted in....

Mark

[tbw2]

There is also what I’d call the eBay economy. Why buy new when you can buy gently used or rescued never used from the back of a closet for a fraction of the price? Those who don’t have to buy do not, and those who need to buy something (tools, clothes, electronics) can get it cheaply from those who must sell things for money - and no manufacturing is involved.

[Lorianne]

I agree. There is market saturation and many people are taking stock of their lives and realizing they don’t need so much STUFF, or any more stuff. Look at how much STUFF people are selling on E-Bay, garage sales etc. People are divesting themselve of STUFF.

This has repercussions for the global economy, not just the USA.

There are plenty of new markets where people are just now getting on the STUFF bandwagon (China, India, Indonesia). If we were smart we would sell STUFF to them.

[Lorianne]

Exactly.
And the thrift stores are full to the brim with stuff and plenty of buyers.
Garage sales, ditto.

We probably have enough stuff to sell to each other for 15 years or more. Quality stuff too a lot of ... made before the cheap Chinese stuff saturated our markets.

I buy quality hand tools and garden tools that beat the hell out of the new stuff in the stores as far as quality.

[dynoman]

I took a train trip from Minot ND to Downingtown PA. The amount of obvious industrial decay and death was stunning, so many huge factories dying or dead, reminded me over and over of Atlas Shrugged.

[mo]

Things are upside down. The finance industry was created and exists to support real industries that provide jobs.

The finance industry has hijacked the country and the treasury because it got into things over its head it should never have given a passing glance.

Now they threaten that the country goes down if they go down to justify their perfidy? Who do they think they are? They are supposed to service our communities, not the other way around?!!!

[dynoman]

The train trip in post 12 was to buy a used car, not on eBay, on Craigslist.

I’ve never had a new car in my life and probably never will. This car doubled the life time total I’ve spent on cars - $14,500 for a 2006 Jaguar X-type with 18,410 miles.

[The Antiyuppie]

“There is market saturation and many people are taking stock of their lives and realizing they don’t need so much STUFF, or any more stuff. “

There are also demographic reasons for this. My FIL told me, “you spend have your life acquiring stuff, and then you spend the other half getting rid of it”.

[The Antiyuppie]

Another reason is that if you are going to be living in an apartment or have to move around a lot to get a job, you can’t have as much “stuff”.

No house = less stuff.

[jjotto]

There seems to be an unusual number of older car collectors liquidating their collections. Younger people just aren’t interested and the long-term market can go nowhere but down.

[moonshot925]

I work in in manufacturing here in Minot :)

Freezers, coolers and other refrigeration equipment.

[wally_bert]

I’ve kept an eye out for a later model AMC CJ (76 or up) and see a lot of them out there with price tags way above what they are really worth.

What ones I see priced normally are on the other side of the country and transporting it here isn’t affordable. With summer going away maybe the demand will drop off some esp for those that don’t have tops included.

As long as the body is decent and it is driveable, the rest can be dealt with.

I had a 77 once in HS and it was a great one despite it being an oil drinker later on and a couple of lifters chattering.

[wally_bert]

I’ve gotten better about checking Ebay and Amazon about buying used.