First One In 16 Years, Man!

Author:
Bess Levin
Updated:
Jan 14, 2019
Original:
Apr 21, 2009

Highlighting the depth of the pain, Caterpillar set an unpleasant record today.

Caterpillar Inc., the world's largest maker of bulldozers and excavators, posted its first quarterly net loss in 16 years and said full-year profit and sales will trail its previous forecast amid a global recession.
The first-quarter net loss of $112 million, or 19 cents a share, compares with net income of $922 million, or $1.45, a year earlier, the Peoria, Illinois-based company said in a statement today. Revenue fell 22 percent to $9.23 billion.

This is worrisome. Caterpillar is in some sense a bellwether firm with very long cycles. Any extended weakness here is suggestive, at least to the extent anything is anymore, of longer-term headaches. Caterpillar benefited disproportionately from the cheap global credit that financed many global Caterpillar customers into shiny new development programs and Caterpillar gear. Now that the party is over it may be a long wait before things return to "agri-normal."
Caterpillar Has First Loss in 16 Years, Cuts Forecast [Bloomberg]

Bonus expectations got ya down? Thinking about robbing a bank? You might want to reconsider. Not because it could be dangerous or you might go to jail or your disguise sucks but because, statistically speaking, it's not really worth your time. In terms of work put in you'd be much better off giving out hand jobs in the alley between 200 West and Shake Shack. In what’s billed as the first cost-benefit analysis of such crimes, three economists note that Britain saw 106 attempted or successful robberies of 10,500 branch banks in 2007. The average haul was $31,600, including the one-third of attempts that came up empty. The average “successful” heist landed about $46,600 — but about 20% of those successes were later tarnished, to say the least, when the raiders were arrested. Each incident involved an average of 1.6 people, resulting in a per-person take of $19,750: a mere half-years’ worth of wages for the average Britisher. (In the U.S., the authors say, the average total bank-robbery take, per incident, is even smaller, just over $4,000.) Think a half-year’s salary isn’t bad for one day’s work, plus a little planning? A “career” bank robber would more likely than not be arrested after only four attempts...“The return on an average bank robbery is, frankly, rubbish,” they write. Bank Robbery Doesn't Pay (Much) [Ideas Market/WSJ]

Pop-quiz: you're a first year analyst at Goldman Sachs, with a little more than twelve months left until your two year commitment is over and you are free to take a job elsewhere. Do you A) take part in private equity and hedge fund recruiting now, and, if someone was particularly impressed with your junior mistmaking skills, accept an offer for a gig beginning in June 2013 or B) tell the buyside you are sorry but are prohibited from engaging in such activities at this time, as they would pose a conflict of interest for Goldman Sachs? At this time, GS JM's believe the correct answer is A, while higher-ups, who believe there is a firm policy in place that says no analyst shall take part in recruiting until six months from the time they've finished the two year program, are going with B. So now this is happening: Goldman has been firing IBD first year analysts with buyside offers. Senior people are calling up funds to ask if any analysts have received offers from them. A bunch have been cut so far. A bunch, we're told, is in the ballpark of four, which seems like enough to put the fear of god into people.

If you're over the age of 30...get ready to pack up your belongings.

But not at themselves for apparently not knowing what the job of first year analyst entails.

The cuts may start this week.

CLOSE

CLOSE

CLOSE

CLOSE