Krugman said that business needs competence and stability, which is true enough but is as irrelevant to business' ulterior motives as Bartiromo's contention that business had abandoned the Republicans for what sounded like perpetuity. The fact is, and this is a point either Krugman or Bartiromo should have made, big business always tries to back the political winner. How shall we say this? They, uh, want to leave traces on those who will rise to power. It's an easy calculation in that regard, and not one that has much to do with political preference. All other things being equal, big business would go for the Republicans in the hope of lower corporate taxes and less regulation. But this time, they'll shovel money to Democrats. And if it seems Republicans will win big next time, then the money will go in the opposite direction. Now, as my knees creak and back bones crack, I'll rise. Coverage of Caterpillar and Deere ( DE), American heavy-equipment makers and exporters, have, as I've said before, inconsistently mentioned an essential factor to their success in recent years: their burgeoning international sales. Through good earnings report after good earnings report, the business media did not always mention the benefit that the weak dollar was bringing to the bottom line. The weak dollar made foreign buyers more apt to buy. Not mentioning it gave investors the wrong impression of how lasting the strength in international business might be, especially as -- certain as tomorrow's sunrise --
CEO genius was often given as a cause for the groovy earnings.
But when Cat lost its groove when reporting earnings late last week, the business media got worse -- if that's possible. Because this time there were not one but two issues with the currency for them to overlook. Let's look at one article, Business Week's "
Caterpillar Spooks the Street," which mentions neither of the currency issues. Then we'll look at The Wall Street Journal, which did God's work in mentioning both and right up top. Make sure anything you read on the heavy-equipment makers resembles the Journal on this. Wrote Business Week, telling only a part of the story to investors: "This global growth story has driven Caterpillar's stock despite the weakness at home. The stock is up 19% so far this year. High energy and commodity costs, along with the growth of emerging economies, have increased demand for Caterpillar's products." Now, the growth of emerging countries has contributed to these sales, but look at how not mentioning the dollar as a sizable component makes it appear like the strength can last at its current levels forever, as Business Week continues: "'Huge amounts of capital are put into new infrastructure around the world. That's a long-term trend that shows no signs of slowing,' says Russell Croft, portfolio manager of the Croft Value Fund (CLVFX), which owns Caterpillar shares. 'The global infrastructure build-out can be a very long cycle,' he says."
Wasn't the global growth story also driven by the weak dollar, making American products cheaper for foreign buyers? And wasn't there a second currency issue at play this quarter? There was, but you'd have to make the trip from Business Week to The Wall Street Journal to hear about it. In "
Caterpillar Pulls Economic Alarm," we only have to wait until the third sentence to hear about both currency issues: "And while the weak dollar is generally assumed to help big exporters such as Caterpillar, one surprise in the results was that currency fluctuations actually lowered its profit figure by $16 million." While we are giving props to the Journal, I also need to mention Dana Cimilluca calling Hershey ( HSY) out directly this weekend for its credit-crunch-made-us-pull-up-lame excuse. Banks passing that one off is one thing, but chocolate makers? The headline of Cimilluca's article, " Hershey's Excuse Leaves Sour Taste," gave The Business Press Maven goose bumps. But a lot of the business media, true to form, reported the excuse as uttered. Now I'm going to sit back down. And wait for those emails to pour in on the Apple predictions.