A bright spot, according to Alan Beaulieu (one-half of the Beaulieu Brothers) of ITR Economics, is encouraging numbers in mining equipment production domestically:
Source: ITR Economics
According to Beaulieu, although the US economy should see a downturn in 2014, “[The] increased willingness for businesses to invest in new equipment has trickled down to mining machinery new orders, which are 5.6% ahead of last year. Mining machinery inventories are currently up 9.6% from 2012, but the rate of change is slowing, which is a good sign for equipment production.”
The MEPS – GLOBAL STEEL PRICE is forecast to expand by approximately six percent over the next five months. The gains are likely to be uneven across the world. The most significant increases are likely to develop in the European Union, after a difficult period for the mills for much of 2013. Slow but steady price advances are predicted in the main steel producing nations in Asia. In North America, the upturn, which started in the second half of this year, is expected to extend into the early months of 2014.
The example of capitalism I was exposed to recently was from the book "Your Teacher Said What?" by Joe & Blake Kernen. Joe is on Squawk Box every week day morning on CNBC. In explaining capitalism to his daughter Blake, Joe used the example of the purchase of a fish tank net. Simply put, who is to tell the pet store owner how many he should stock or from what company? Who is doing the planning to get these items to the pet store? Who is deciding the production level for their manufacture? How are the resources being allocated to this mundane item? The fact is that if you took the 100 most intelligent people on the face of this earth and coupled them with the most powerful computer systems they could not do a better job than the capitalistic system. AND a real side benefit is achieved! The individual in the store making the purchase has a choice of what fish net they want. Even by color. This is called democracy. No matter how many people are populating Washington and such, they cannot do as good a job as the free enterprise system.
How can this example be so simple and to the point and yet so obscure to so many people.
Steel production appears to be declining slowly since summer. The decline is modest and is contrary to the strong market for other castings related to automotive production. The decline is in line with a slowing production for capital goods.
Steel production improved modestly last week but still appears to be stable or declining
Steel production remains at lower levels showing a slowing of production.
Stainless steel was up indicating ongoing demand.
Steel production was up slightly from last week but remains at the low end of the recent range of production. It is not clear if it is declining or stable moving ahead.
Steel production feel last week to the lower end of the range that has been characteristic of past 6 months. The year over year change is up sharply because last year was the low point of production. This slowdown in steel production is a troubling sign that may suggest a slowing market.