What happens when trends are mutually reinforcing?
Three items this month all seemed to line up around the challenges and opportunity for industrial manufacturers.
First, (and quickly) from the finance world. John Mauldin recently featured Lacy Hunt in his Outside the Box article. (follow @JohnFMauldin) Industrial production has stalled and utilization is falling. That's aggravated by the fact that monetary policy has provided implicit insurance against risk in financial assets without corresponding insurance for investment in capital equipment and manufacturing. The misallocation of resources that's developed over the last several years likely can't be quickly or painlessly corrected - especially as the yield curve flattens and the dollar strengthens.