"New Worries About Credit Drive Down Stock Markets" by MICHAEL M. GRYNBAUM
Where will it end?
Stock markets plummeted yesterday on a fresh round of questions about Citigroup and the financial sector. The Dow Jones industrial average fell more than 200 points, to reach its lowest close since the depths of this summer’s subprime woes.
Traders are beginning to wonder just how long the sell-off will last."
That's all right! Corporations are doing just fine:
"Campbell Says Higher Costs Hurt Earnings" by REUTERS
The Campbell Soup Company posted a 7 percent decline in first-quarter profit yesterday, hurt by higher costs and lower soup sales in the United States, but stood by its full-year earnings forecast.
Weakness in the soup business was mitigated by strength in the Pepperidge Farm cookie and cracker business and V8 juice line.
“The soup business was weak, and you don’t like to see it, but it was offset by some great performance elsewhere,” said Matt Arnold, an analyst at Edward Jones. “V8 continues to do very well; Pepperidge Farm continues to do very well.”
Soup sales were held down by an exceptionally warm autumn, but Campbell said it expected the business to “deliver better performance” as the fiscal year progresses.
The first quarter is typically when retailers begin stocking up soup for the cooler fall and winter months.
Campbell said net earnings were $270 million, or 70 cents a share, in the fiscal first quarter that ended Oct. 28, down from $291 million, or 72 cents a share, a year earlier.
Analysts on average were expecting 71 cents a share, according to Reuters Estimates.
The company said gross margins were hurt, as it spent more on advertising and marketing, and its price increases were not enough to offset higher costs for ingredients, especially wheat, which is used in the baking business and in making some soups.
Net sales rose 7 percent, to $2.30 billion, aided by greater sales volume, a higher proportion of sales of more expensive products, and the weak dollar, which raised the value of overseas sales.
The company has been increasing sales with newer products like lower-sodium soup, while also expanding its soup business into China and Russia.
People starving here, but the profits are coming from overseas!
It said in August that it was exploring options for its Godiva Chocolatier business, which could lead to a sale of the upscale brand."
These guys made big bucks. Selling what, I don't know:
"Nordstrom’s Profit Increases 22%"
SEATTLE, Nov. 19 (AP) — The luxury retailer Nordstrom said on Monday that third-quarter earnings rose 22 percent, helped by an extra week of sales the company counted in the quarter compared with a year ago.
Nordstrom said its profit rose to $165.7 million, or 68 cents a share, compared with $135.7 million, or 52 cents a share, last year.
Results included a gain of 9 cents a share related to the sale of Nordstrom’s Façonnable business, which closed in the quarter.
Excluding that and other one-time items, quarterly earnings totaled 59 cents a share.
On that basis, results topped Wall Street’s expectations. Analysts polled by Thomson Financial had forecast a profit of 52 cents a share."
Yeah, it's all good for the companies:
"Companies Bolster Sales Abroad to Offset Weakness at Home" by PETER S. GOODMAN
So, FUCK YOU, American citizen!
SALISBURY, N.C., Nov. 16 — If the fortunes of the Power Curbers company were tied solely to business in the United States, these would be grim days at its factory on the fringes of this Piedmont town. The small, family-owned company makes machines that turn concrete into curbs, and with the American construction industry in distress, domestic sales are expected to drop at least 10 percent this year.
But fortunately for Power Curbers, and indeed for the national economy, the company has transcended geography. Aided by the falling dollar, which makes American goods cheaper on world markets, Power Curbers, like thousands of other companies in the United States, is tapping rapid growth abroad to compensate for sluggish sales at home.
“It just overlapped as if you’d scripted it,” said the company’s president and chief executive officer, Dyke Messinger, the third generation to head the company begun by his grandfather in 1953. “Without that foreign business, these would be some tough days. We’d have had some layoffs for sure.”
As the United States heads into what many economists predict will be a substantial economic slowdown, the success of American firms in building sales abroad may cushion the blow. It could help prevent the economy from slipping into a recession.
In the first half of the year, profits earned at home by American companies grew not at all compared with a year earlier, according to an analysis by Moody’s Economy.com. But profits abroad soared by 22 percent.
Caterpillar, the maker of construction machines and engines, said its North American sales fell by 11 percent during the summer, according to its most recent earnings report, as the housing and construction slowdown in the United States cooled demand. But during those same months, Caterpillar’s sales surged by roughly a third in Africa, Asia, Europe and the Middle East and by 20 percent in Latin America. Overall, the company’s sales grew 9 percent.
McDonald’s, a symbol of globalization, said its sales in Africa, Asia, Europe and the Middle East grew at 2 ½ times the pace of sales at home.
“Look at the top 30 economies in the world: Every one is in expansion except for two — Denmark and Japan,” said David Huether, chief economist at the National Association of Manufacturers. “For the next year or so, the global economy is strong.”
But whether strong business abroad can in the longer term offset weakness at home is far from certain. Though the global economy has been growing at more than twice the pace of the United States economy — propelled by the breakneck development of China, Russia and India — some economists see signs of slackening.
The International Monetary Fund recently predicted a slight easing in global growth next year while warning that the downturn in mortgage markets could spawn wider troubles. If institutions in Europe follow Wall Street banks in logging huge losses on their mortgage-related holdings, that could crimp new investment and slow the economy.
European exporters are already struggling with the effects of a soaring euro, which makes their products more expensive. Factories across Asia, Latin America and Europe are bracing for the consequences of tighter American spending, which could curb demand for Guatemalan-made clothing, Chinese-built computers and German-produced cars.
Recently, economists have been debating whether it is possible for the global economy to continue expanding even if fortunes dim in the United States. Some argue that the needs of rapidly developing societies are so vast that they can compensate for slack growth in the industrial countries.
“Think of 400 million people in China going from the 6th century to the 21st century over the last 15 years,” said Robert Barbera, chief economist at ITG, a brokerage and advisory firm. “The same thing is going on in India as well. That’s still the big driver for growth. It could self-destruct for any number of reasons, but that underlying story is decades away from being over.”
But if that is the future, some economists assert that the present remains shaped primarily by conditions in the United States — by far the world’s largest economy. If declining house prices cause Americans to spend less, that would most likely diminish demand for, say, DVD players made in factories in southern China. And that could in turn limit demand for the American-made chips at the heart of DVD players and the American-made machines used to build them.
More broadly, if China’s exports slow as a result of diminished spending in the United States, that could cool the exuberant wave of real estate development remaking China’s cities. And that might limit demand for Caterpillar’s earth-moving machines, for computer software developed in Silicon Valley to manage such projects and for American architectural services.
“The United States is the ultimate engine of growth in the world, still,” said Kenneth S. Rogoff, former chief economist at the International Monetary Fund and a fellow at the Brookings Institution.
For now, though, and much to the relief of corporate America, the cycle is working in reverse: Healthier overseas markets are propping up American balance sheets.
Even though the thing is gonna shit here and wreck the whole damn thing.
But not yet, so it's O.K.?
The United States has been rocked by the housing downturn, but the rest of the world has, at least for now, mostly skated clear. High energy prices have exacted a toll on Americans, because oil is priced in American dollars. Countries with other currencies — in particular those in Europe — are enjoying a built-in hedge against more expensive oil as their money climbs against the dollar. And countries that export oil and other natural resources are raking in profits, sending them shopping for American wares and expertise.
In Columbus, Neb., the Behlen Manufacturing Company said sales of its cattle-handling equipment dipped in the United States. But the falling dollar has contributed to orders from Ukraine and Hungary for grain storage silos, partially offsetting Behlen’s losses. “We compete against the Europeans for these contracts,” said the company’s chairman, Tony Raimondo.
Through the end of September, American exports reached $1.2 trillion, a jump of nearly 12 percent compared with the same period in 2006. Even more important to the profitability of American companies are their overseas sales of goods and services that they produce abroad.
As capital flowed from American shores in recent decades, it was mostly used to set up factories that could make goods cheaply for consumers in the United States and other wealthy countries. But increasingly, American multinationals with factories and offices overseas are keen to sell their goods and services to the people living those countries.
Six years ago, large American companies that disclosed their foreign sales sold about a third of their products abroad, according to an analysis by Howard Silverblatt, senior index analyst at Standard & Poor’s. Last year, the foreign take climbed to 44 percent. Next year, foreign sales are forecast to surpass those at home.
Cisco Systems, the big maker of telecommunications gear, said its orders in the United States grew by 13 percent in its most recent quarter, while those in Europe expanded at a 20 percent clip, and those in Eastern Europe, Latin America and Turkey grew by about a third.
The Carnival Corporation, the cruise line operator, has been concentrating new investments in Europe, where people generally have more vacation days and the economy has been expanding. Of the 21 ships being built for Carnival’s various brands, 12 are destined for Europe.
“There’s real global growth in our business, and the exchange rate has dramatically accelerated that,” said Carnival’s chief executive, Micky Arison.
Here in Salisbury, about 45 miles north of Charlotte, the increasingly global aspirations of Power Curbers demonstrate how even small, family-owned enterprises have gone global.
When Mr. Messinger took over the company from his father in 1981, Power Curbers had only one employee overseas. Today it has three, all working in sales and marketing, and a network of more than 50 foreign distributors.
Foreign sales are on track to more than double, compared with last year, and should make up about a third of total sales, Mr. Messinger said.
One morning last week, the whiteboard that tracks construction in the factory showed four domestic orders, plus two machines in the making for Angola, one for Belgium and one for India. A finished machine awaited shipment to Egypt.
In September, as American sales diminished, Mr. Messinger fretted that he would have to cut his work force. But as foreign orders poured in, he hired four people instead, bringing the ranks of the Salisbury factory to 86.
“Everything seems fine and steady,” said Tray Hawkins, donning white coveralls as he applied paint to parts. A veteran of the Iraq war, Mr. Hawkins returned home more than a year ago and struggled to find decent-paying work, he said. In March, he began at Power Curbers, earning what he called a good salary and benefits. Among the machines he has helped build, more than 10 are bound for Iraq, where a road-building effort is under way.
What about our roads here, for crying out loud?
What ever happened to working for America?
Mr. Messinger says he is confident the foreign boom can continue. This year he has greeted customers from Algeria, China, India, Ireland and Mexico.
“I don’t see it ending,” Mr. Messinger said. “If the world’s population is growing, you’ve got to put them somewhere.”
Of course, the globalists don't intend to let the population keep growing.
They are planning on an 80% reduction!
