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?