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kscarbel2

"BMT Investors" Bulletin Board

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A massive loss of face.....heads are going to roll.

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“We still have very sluggish wage growth despite the fact that for a number of months, we have had an unemployment rate below 4%. Ordinarily, we would have wage and salary income growth well above 5%, 6%. Instead, according to U.S. government numbers, it’s only at 3.5%.”

“Why are we not getting a livelier pace of wage and salary income growth, livelier growth for the average hourly wages as well as consumer spending? What’s going to happen when the unemployment rate inevitably rises? A very low unemployment rate raises the risk of a higher unemployment rate 12 months from now… So that tells me that investors have to cast a wary eye on any forecast of continued growth for the U.S. economy.”

“You’re definitely going to see the market tank in the event you don’t get a rate cut at the end of July without any strong reason to rule against a rate cut. Keep an eye on what’s going on with business sales — what they sell to consumers, capital goods and exports. If that doesn’t improve significantly fairly soon, we not only get a rate cut in July but we also get one at the September 18th meeting of the FOMC.”

Moody's Capital Markets Chief Economist John Lonski

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Stocks are hitting record highs.

Layoffs and unemployment are at 50-year lows.

And yet, the Federal Reserve is prepared to cut interest rates soon because it’s worried about the economy.

Just seven months ago,remember, the Fed was predicting it would raise rates several times this year. Now the question is just how many times it will cut rates. And whether it will do any good at all.

It’s a mad, mad, mad, mad world.

https://www.marketwatch.com/story/an-economy-gone-mad-the-fed-is-going-to-cut-interest-rates-despite-record-stock-prices-low-unemployment-2019-07-11?mod=mw_theo_homepage

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Meritor’s Net Income Up 34.4% in 3Q

Transport Topics  /  July 31, 2019

Meritor Inc. reported net income rose 34.4% to $86 million, or $1 per diluted share, for its third quarter ended June 30.

That compares with $64 million, or 71 cents per diluted share, the Troy, Mich.-based supplier reported July 31.

Revenue was $1.17 billion, up $37 million, or about 3%, from the same period last year, when revenue stood at $1.13 billion.

Meritor officials said the increase in sales was driven by higher truck production, primarily in North America, partially offset by the strengthening of the U.S. dollar against most currencies.

Meritor is a global supplier of drivetrain, mobility, braking and aftermarket solutions for commercial vehicle and industrial markets. Meritor has approximately 9,300 employees in 19 countries.

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Dana Reports 2Q Net Loss of $68 Million

Transport Topics  /  July 31, 2019

Dana Inc., a major supplier of drivetrain, sealing and thermal-management technologies, reported a net loss of $68 million for the second quarter ended June 30.

The Maumee, Ohio-based company, which had posted a profit of $124 million in the same period in 2018, said earnings per share the past quarter were affected by a one-time, $258 million charge for the transfer of a terminated pension plan.

Earnings per share were minus 47 cents, compared with 85 cents in 2018’s second quarter.

Revenue was up 12.3%, to $2.31 billion, from $2.1 billion in the same period in 2018.

“Due to stable end markets, our strong sales backlog and accretive acquisitions, we increased sales by 12% over last year and achieved improved margin performance,” CEO James Kamsickas said. “Our intense focus on customer satisfaction and cost discipline, combined with steady organic and inorganic growth, is positioning us to finish the year strong.”

Dana’s portfolio focuses on efficiency, performance and sustainability of light vehicles, commercial vehicles and off-highway equipment.

Founded in 1904, Dana has more than 36,000 employees in 33 countries. The company reported sales of $8.1 billion in 2018.

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Gary Cohn is even sharper than I originally thought. 

And Cohn is right......Trump’s so-called trade war actually provided the party with a face-saving excuse for addressing the country’s over-heated economy. Don’t think for a minute this was a coincidence.

https://www.bbc.com/news/business-49187126

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Setting new 52-week lows today:

Alcoa

American Axle

Briggs & Stratton

Tenneco

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Goldman Sachs sees no trade deal before 2020 election, now expects 3 rate cuts

Reuters / August 6, 2019

Goldman Sachs said it no longer expects the United States and China to agree on a deal to end their prolonged trade dispute before the November 2020 presidential election as policymakers from the world’s largest economies are “taking a harder line”. 

The bank now expects two back-to-back rate cuts from the U.S. Federal Reserve (Fed) “in light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit”.

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Reuters / August 6, 2019

WASHINGTON - White House trade adviser Peter Navarro on Monday called on the U.S. Federal Reserve to cut interest rates by another three-quarters of a point to full point by end of year to bring U.S. rates into line to with rates elsewhere. 

“The Federal Reserve before the end of the year has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in America in line with the rest of the world,” Navarro says. “We have just too big a spread between our rates and that costs us jobs.”

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On 5/3/2019 at 8:23 AM, kscarbel2 said:

A mild recession in 3rd qtr 2019

A more significant recession by 2023.

With both the US and UK yield curves inverting, important global economy Germany entering recession and serious global trade issues at hand, it appears we are about to enter a global recession.

Just a heads up FYI. Some might want to make some defensive decisions to protect their investments, business and/or other.

It could get extremely ugly.

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Bloomberg  /  August 15, 2019

Japan surpassed China in June as the top holder of U.S. Treasuries as the trade war between the world’s two largest economies intensified.

Japan increased its holdings of U.S. bonds, bills and notes by $21.9 billion to $1.12 trillion, the highest level in more than 2 1/2 years, according to data released by the Treasury Department on Thursday. Meanwhile, China’s ownership rose for the first time in four months to $1.11 trillion, up by $2.3 billion.

The last time Japan held the position as America’s largest foreign creditor was May 2017.

Japan has added more than $100 billion worth of Treasuries at a fairly steady pace since October 2018.

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