By all accounts I have heard IMTS was a major success for the exhibitors. I am always skeptical about supposed pre-registration numbers at shows, but this year it appears that IMTS actually exceeded the 87,000 number that was floated before the show started. The 100,000 mark was probably reached. If you can generalize, buyers were even more schizophrenic than usual. With excellent cash flows the last couple of years, manufacturing migrating back to North America from China, and with favorable depreciation rules for the moment, this should have been a selling free-for-all. But I gather many buyers were drooling yet reluctant to place orders. The excuses were the usual suspects – the election, the “fiscal cliff,” European woes, and the possibility of war with Iran. What it boiled down to was a lack of visibility about cash flows for the next couple of years. Because companies these days are projecting two year paybacks or less on new purchases, this lack of visibility is a killer.
I think this is a good time to buy, but with a caveat. No matter what the outcome of the American election, a question mark will be eliminated in November. The “fiscal cliff” will be addressed one way or another. The likely outcome is “kicking the can down the road” again, but even if the cuts and tax increases take place it takes some uncertainty out. “Obamacare” is unlikely to be overturned, but in a Romney administration it would be changed and delayed. This will probably occur in an Obama administration if the Republicans hold the House.
For me, Iran is “the big one” that cannot be forecasted with any certainty. This is how I see it at the moment.
Israel’s Bibi Netanyahu is ready to hit Iran’s nuclear bomb program hard – now, but he wants Barack Obama’s help and blessing. Obama thinks he has Mitt Romney on the run and does not want to jeopardize his re-election with a Mideast war and the resulting pop in oil prices – and an Iranian counterstrike against the U.S. He is trying to restrain Israel, at least until the November election is over. The unknown variable is whether Iran will risk an attack to continue to pursue its nuclear strategy, or make a last minute deal and proclaim victory, causing oil prices drop to $60 per barrel because of shale gas and reduction of perceived political risk.
Can the world live with a nuclear-armed Iran? The best minds in Israel, and hopefully at the CIA have been trying to handicap this for years. And even if the calculation I have read from Israel is true, that there is a 20 percent chance of an Iran first strike, that is an unacceptable risk for many Israelis to live under.
For me, nuclear weapons in the hands of the current Iranian leadership is a gut issue that keeps me up at night. On one level it stifles the economy and deters the guy who wants to buy a new machining center. But the bigger picture is that Tehran’s overreaching for a return to Persian greatness threatens my people – Israel and America – and it really does scare me.
Question: Should Israel attack Iran? Should the U.S. attack Iran?
I THINK WE SHOULD ATTACK IRAN ANYWAY REGUARDLESS IF THEY GO AGANIST ISRAEL WIPE THE SMART ASS SMILE OFF THEIR MIDGET LEADERS FACE!!.
IMTS attendence seems to be 53,586. This number does not include students, exhibitors, or media. Definately still a good show.
As far as the cliff- look out below-
Fiscal cliffhanger
Will the U.S. go over the “fiscal cliff”? Don’t expect an answer before the election.
By now, you’ve likely heard a fair amount about the “fiscal cliff,” an unprecedented pileup of spending cuts and tax hikes that will take effect in 2013—unless Congress takes action. Among its building blocks: the expiration of the 2001 and 2003 tax cuts (often referred to as the Bush-era tax cuts) which include lower tax rates on income, capital gains, dividends, and estates; the end of certain fiscal stimulus programs; a new Medicare tax on investment income for higher earners; and the implementation of the budget sequester (i.e., automatic spending cuts), agreed to as a result of the debt-ceiling debate last year.
The stakes are high. Go over the fiscal cliff, and a recession is likely that could hammer corporate profits. Defer action too much for too long, and deficits could balloon further, undermining investor confidence in the United States. And if interest rates rise as a result, deficit reduction could become even more daunting.
So what’s ahead? No one knows for sure. But at this point, a few things seem relatively clear:
• The debate over extending or modifying looming tax hikes and spending cuts is not likely to be resolved before the election. Instead, the issues are likely be debated after the election in a “lame duck” session of Congress.
• It’s possible that Congress gridlocks in the lame duck and cannot reach agreement on how to address the fiscal cliff until early next year. But some agreement could be reached in November or December—even if only a temporary fix that would push the need for resolution into next year.
• Ultimately, since the elections are unlikely to produce a decisive majority for either party in Congress, some level of compromise will be necessary to avoid the full brunt of the fiscal cliff.
• In the meantime, investors should brace for some market volatility.
How high is the cliff?
The nonpartisan Congressional Budget Office (CBO) estimates that falling off the fiscal cliff would reduce the federal budget deficit by $606 billion, or 4% of gross domestic product (GDP) in 2013 alone. That may be good for reducing deficits and debt. However, economists, and the CBO generally agree that allowing the full fiscal cliff to hit at one time could have a substantially negative impact on the economy and “would lead to what will probably be deemed a recession.”1 Indeed, Dirk Hofschire, Fidelity senior vice president of asset allocation research, has estimated the full impact could cut corporate profits by 20–30% next year.
Of course, these estimates assume that we go over the full fiscal cliff and Congress does not act to reduce the impact for all of 2013. What is currently less clear is the impact to the economy and markets if those spending cuts and tax hikes were to take effect for just a few days or weeks. Regardless of the extent of the impact, the resulting uncertainty could cause market volatility.
It is also important to recognize that certain components of the fiscal cliff may have a bigger economic impact than others. The chart above, based on the CBO’s data, stacks the components of the fiscal cliff from smallest to largest. As you can see, the expiring Bush-era tax cuts are by far the biggest component, totaling $221 billion. By comparison, the sequester would save $65 billion.
And don’t underestimate the impact this would have on taxpayers of all income levels. “Approximately-two thirds of the cost of extending the 2001 and 2003 tax cuts is attributable to those in the bottom four tax brackets,” says Shahira Knight, vice president, Fidelity government relations. “Therefore, the fiscal cliff would have significant implications for people across the income spectrum.”
Is another debt-ceiling crisis ahead?
In addition to addressing the fiscal cliff, Congress and the president must also deal with the debt ceiling. U.S. Treasury Secretary Timothy Geithner has publicly stated that we are likely to run up against the debt ceiling toward the end of this year, but there are enough “extraordinary measures” that the Treasury can take to create room under the debt limit until early next year. The debate over the fiscal cliff and the debt limit are likely to be intertwined.
What’s likely from Congress?
Broadly speaking, Fidelity’s government relations and public policy team sees three potential scenarios:
A grand deal is reached. There are some within Congress who view the fiscal cliff as a unique opportunity to do something big by comprehensively addressing tax reform and the long-term deficit situation. A bipartisan group of lawmakers is working to put together a broad package and build support for it. However, a grand deal is likely too ambitious to get done with so little time left in 2012. Instead, the lame duck Congress may just set the parameters for a 2013 debate on long-term budget and tax reform.
Congress does not pass legislation before year-end. The potential of “falling off the cliff” temporarily is possible if Congress and the administration gridlock. However, if that were to occur, we would expect the situation to be short-lived. The team would anticipate that the new Congress would work to address the situation in the first quarter of 2013.
Some compromise is reached during the lame duck. This may be a deal to push the deadline out a few months, or an agreement on several, but not all, the components of the fiscal cliff. It could also include an agreement to increase the debt ceiling or outline an expedited process for longer-term tax reform. What any compromise could look like depends on post-election dynamics and the state of the economy at the end of the year.
While the elections will impact the shape of any deal reached, the majorities in both the House and Senate are likely to be very slim. Therefore, regardless of the outcome of the elections, some bipartisan compromise will be necessary to forestall hitting the fiscal cliff.
Current proposals highlight key philosophical differences between parties. A Republican proposal would extend Bush-era tax cuts through 2013 and enact a process for considering tax reform on an expedited basis before the end of next year. The Democrats’ proposal would maintain the Bush-era tax cuts only for income of less than $200,000 for individuals and less than $250,000 for married couples.
Is a long-term solution possible?
Looking past the fiscal cliff, we believe there is potential for longer-term tax and budget reform. Determining what an eventual reform proposal would look like is difficult. With respect to deficit reduction, budget savings have been identified in previous bipartisan deficit reduction efforts, such as the Biden debt-limit negotiations, the Super Committee negotiations, and the Gang of Six proposals. These budget savings might form the basis of a deficit-reduction package. However, addressing the long-term budget situation will require more significant budget savings. Past efforts have been unsuccessful due to disagreements between Republicans and Democrats about the extent to which tax increases and entitlement reforms should be included. While both sides have shown some willingness to compromise, they have disagreed about the relative mix of budgetary savings from revenue and spending.
Similarly, Republicans and Democrats have both signaled interest in comprehensive tax reform. However, significant disagreements remain. For example, most Republicans believe tax reform should not increase the deficit while most Democrats have said tax reform should raise revenue to help reduce the deficit. Another disagreement involves the scope of tax reform. Republicans generally want to reform both the individual and corporate tax codes, while the president has indicated support for reforming business, not individual, taxes.
Getting to a long-term solution won’t be easy. Much will depend on the outcome of the elections, as well as the state of the economy and the markets. Until agreement is reached, however, it would be prudent to brace for some market volatility.
The views and opinions expressed herein do not necessarily represent the views of Fidelity Investments. Any such views are subject to change at any time based on market or other conditions. Fidelity Investments disclaims any liability for any direct or incidental loss incurred by applying any of the information in this article. As with all your investments through Fidelity, you must make your own determination as to whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing these investments by making this article available to its customers. Consult your tax or financial adviser for information concerning your specific situation.
The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Fidelity does not assume any obligation to inform you of any subsequent changes in the tax law or other factors that could affect the information contained herein. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Investing involves risk, including risk of loss.
1. An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022, The Congressional Budget Office (CBO), August 2012.
Portfolio Review is an educational tool, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.
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Wow, blatant racism. Very mature. You do know there are very many people in Iran who think like us. They were in the streets protesting years ago. Do you agree with everything the leadership in your country does? Judging by your tone I doubt you’re an Obama supporter. Yet you’re ready to wipe a country off the earth because you don’t like their leader? You are truly a shining example of maturity and rational thought.
I don’t think Israel can successfully attack Iran and it’s nuclear sites without the direct asisstance from the U.S.. Who will be the next President of Iran ? The current one will be out next year. Does the U.S. and Israel have enough intelegence info to evaluate Iran’s nuclear status ?
To clarify, my comment was directed toward Henry.
I think USA must atteck Iran
Obama should go visit Iran. Then Isreal and the USA should demolish their nuclear aspirations, and simultaneously do a “whoops” and get rid of both of these Tangos.
The World will then be a better place, and both of these muslims can delight in their virgin jihad reward.
Very tough for Israel to attack Iran without violating some ones else airspace or causing another problem. They can’t fly there direct without crossing someone border unless they go around using the Mediterranean Sea. They would mean refueling (with someones help) plus the element of surprise would be lost. I’m sure the would prefer for the U.S. to take on the task.
A strange question, I believe. Whether Isreal attacks Iran or not, should not be a decision even considered by anyone in the US. That should be a decision left to them and them alone. We can never hope to really hope to know the amount of stress and pressure the Israeli people are under on a day to day basis. (The same way we would never know what pressure the British were under durring the Battle of Britian). With that said, if Mr Netanyahu and the Israeli leadership decide to attack, our government should be willing to support that move. I don’t really believe the Israelis need our help with boots on the ground, (they seem more than capable of handling most problems in the area) but we need to throw our political support behind them. I really don’t think our present administration has the stones for that though. They seem more worried about wrangling an election than saving countless lives. I am afraid they would just through the Israelis under the bus if it would cost them votes.
An interesting stastic I saw just yesterday. From 2001 t0 2008 total US casualties in Afganistan were 630 (this is while we were getting daily body counts by our media). The count from 2009 to present is at 1495 with no daily counts. This is a good reason in my eyes why this problem in Iran needs to be taken seriously by serious people, at present we don’t have that.
http://icasualties.org/oef/
Macho bluster aside, attacking Iran will only embed our country into another morass like Iraq and Afghanistan, kill and maim our young people and cost us countless billions for years. Remember “shock and awe?” Eleven years later, we’re still figuring out the exit strategy. Lucky for us, we have a President who believes in diplomacy and crippling sanctions..
Considering that America is the only country EVER to use an atomic weapon on another country, and that some radical right wingers would bomb first and then ask questions, thank god we don’t have a trigger happy guy running things. The MIDDLE EAST have been fighting their religious wars for how many thousands of years by now? It’s about time Israel starts thinking about the rest of the world instead of just themselves. If they invade Iran, do you really think the Middle East will remain calm? Do we really want Israel to start World War III?
It’s time to get the hell out of the Middle East and let those folks work it out between themselves. If the people that love Israel who are living in America think America should fight their war, think again. Then move there so you can defend your beloved country.
Whatever happens over there, in the end, they’ll still be fighting each other over religion just like always.
Pakistan has nuclear bombs. So does N Korea, not exactly shining examples of enlightened and rationally thinking nations. To me, they are just as much threats to world peace as Iran would be if they had nuclear capabilities. Also, who are we to decide who can and cannot have nuclear weapons? Well, I guess that question isn’t as important as the real issue which is that we are by far the world’s greatest military power and we’ll decide what to do when push comes to shove and there is nothing that any nation can or will do about it. At least effectively. Oh sure, they may put up a fight, but Israel and the U.S. together would crush Iran before they had a chance to blink. I have to say simply that I do not know what we should do which is mirrored by many Israelis as well as the powers that be in Obama’s administration. Iran is very much like Germany before World War II in its Machiavellian protestations and declarations that they do not pose a threat while veiling their true interests which is domination, at least in their own geograhical region. They are not to be trusted but is it worth a war much greater than anything we have seen since probably the Korean War? No where near as protracted but the implications of devastation are staggering.
NO WAY should we attack Iran for Isreal. Why do we always listen to them. Lets get the hell out of the middle east and worry about our own problems back home. Look how much those wars have already cost us. I would love to get more work out of it but not enough to go to war over it. I belive an attack would threaten and harm more of our troops in the area. Leave them alone unless they start it first.
Lloyd – - – lack of equipment purchases is not about Iran or uncertainty about tomorrow. It is CERTAINTY. It’s the certainty that medicare, medicaid, social security, the postal service, Amtrak etc. are bankrupt or soon to be. It’s the certainty that Democratic leaning communities on both coast are declaring bankruptcy due to pie in the sky pensions and governmental unions. It’s the certainty that our Federal Reserve is purchasing our own government bonds . . is that not like loaning myself money (with no collateral). It’s the certainty of higher taxes due to redistribution to the undeserving and unmotivated. It’s the cerainty that Obamacare will be a bigger train wreck then all social programs combined. It’s the empowerment this president has handed to the people who have historically hated Americans. It’s the certainty of fewer freedoms, because this government “knows bests” It’s the certainty that the only way unemployment will drop, is if this administration continues to move more people to the disability roles. It’s the certainty that the Federal Reserve has robbing the retirement earnings of the elderly by driving down rates to prop up the faltering big banks. When true inflation is higher than the current home loan interest rates, (Houston, we have a problem). What is the profit margin if a bank pays the government zero percent and loans the funds at eighteen percent to a college student with a credit card. What if every citizen, oops, American, oops, person occuping space inside the US borders could get some of that action.
LLOYD, IT’S THE CERTAINTY!
It is very disturbing to me to read today’s Graff’s editorial, as well as some of the following comments from other readers. I can’t believe that we are talking about going to war in the economic situation we are in (in the US and elsewhere …in Europe). Also, are we forgetting that Israel, is in that area for the last 64 years since its creation and is unable to secure peace with its neighbors despite all the foreign help and the wars we had and still going on in that area of the world. And now, we want to go, possible to a nuclear war (remember Israel has the bomb too — everybody knows that)? What is going on here? So far, I believe the diplomacy is keeping Iran’s leadeship under pressure, maybe until the next election (there) or even beyond. Why do want to change that?
Back to the IMTS, machine tools and similar equipment can and are used in a peaceful world. There are plenty of needs in the manufacturing for that industry to continue to flurish. In fact the best market is a global market. As a futurist from MIT goes on saying in a one of his talk that “in tomorrow’s world, the needs of the market will abolish war, since it is against the interest of the market to bomb the customers.”
“Should Israel attack Iran” “Should the US attack Iran” Mr. Graff need I remind you that German Jew’s back in the early 1930′s thought Hitler was a joke, passing fancy or fad and would wear out his welcome with the majority of the German people. How many times do lunatics have to first tell everyone what they are going to do and have everyone do the ole shoulder shrug and “there is no way that could happen” and watch in horror as it DOES HAPPEN?
I assure you and every other naive American Jew that if these Islamic fundamentalist fanatic lunatics get a nuclear weapon and a dependable delivery system they will use it the second it is operational WITHOUT warning!
What is happening now in the middle east is what those lunatics who control Iran, and now thanks to Obama most of the other Arab countries, were raised believing, studying and WANTING in their quest for martyrdom and the end times their idiot religion teaches.
Knowing these truths what would you do? Wait for the mushroom clouds or save your country and stop another holocaust? I’d say that’s a pretty easy decision for a sane, rational man or nation to make instead of giving fanatics more time to obliterate you.
Also, Europe is accelerating into a financial disaster that of which hasn’t been seen since before WW2 via their asinine Social Welfare States they have allowed to grow beyond their abilities to fund and pay for.
Our Genius President is actually accelerating America towards this same “Euro-Comma” idiocy and if he is re-elected America will be a much larger version of Greece, Spain, Portugal and France combined and that’s why people are afraid to go out on a limb and borrow money for new equipment because some of us realize what is going on and what will happen as the consequences of liberal social/welfare nonsense and the incremental creep of the progressive/Socialist agenda/doctrine!
War is a last choice. Have we done enough to support this decision? I think we have to stand up and support our allies, I think we must be strong in our relationships to let the world know how we stand. It is because of politics that Obama isn’t doing his job with the USA’s support with Israel. He is sending Hillory to visit Israel because he is too busy campaigning? I am glad he is not my friend when a friend is needed! At a time when priorities and honor matter, he looks to his own agenda, not our country’s. This is a very bad in my own mind. Why shouldn’t the country’s business come first for our president?
Seems to be a terrible leadership move in my estimation.
60% of the Isreali people do not want ot attack Iran. BiBi will only attack if we agree to back him up. I don’t trust the intelligience of either the U S or Isreal. Why should we put our soldiers lives at risk when 50% of the Isreal men, the Ultra Orthodox Jews, refuse to server their own country. Attack Iran if you want, but don’t call us later.
Apparently most folks opinion on this matter is determined by wether or not they listen to hate radio and the Fox propaganda channel. Those who want to bomb Iran probably also will vote for the con man who hides the money he made shipping American jobs overseas in the Cayman Islands. We used to hang traiters like that before propaganda TV took over.