Tangerine

By Lloyd Graff

I am writing this blog from home on Tuesday. My brain surgery to remove a benign tumor on my pituitary gland, which had grown from the size of a pea to that of a tangerine, was successful. The threat of blindness from its encroachment on my optic nerve has been removed. I am enormously grateful to the neurosurgery team at the University of Chicago, especially Dr. Issam Awad, who removed the ominous growth by channeling through my nose to get to the extremely enlarged gland.

It seems incredible to me that brain surgery to remove a “tangerine sized” tumor can be done without cracking the skull open, but creative surgeons and product manufacturers have made amazing innovations in recent years. It is quite possible that this pituitary tumor would have blinded me had it occurred a few years ago. Today it is correctable by minimally invasive surgery. They used belly fat to patch the holes. I knew my extra fat would be good for something.

Thanks to all who wrote such caring comments. It really made me feel that this column connects with its readers. I am truly grateful for your feedback.

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The Doosan saga seems to get messier by the day.

Doosan Infracore’s rush rush deal to sell the Doosan machine tool brand to Standard Chartered Bank fell apart at the end of January. The company is hemorrhaging cash from its other businesses, especially construction equipment (Bobcat, etc.). Its only viable asset it can convert to cash quickly is the successful machine tools division.

Standard Chartered Bank had offered $1.08 billion, subject to due diligence. Evidently after thinking about the deal it opted out. The next bidder was MBK Partners, an Asian buyout firm that just did a big deal with Tesco, the British grocery chain for its Asian assets. MBK Partners is a big player but does not seem to do much in the machinery area. Its offer is $850 million, so it is obvious that Doosan Infracore is playing a weak hand now. It is pushing for a March closing because the company is seemingly desperate for cash to keep the ship afloat.

The Doosan story is a little sad. Doosan Infracore built a wonderful machine tool company since taking over Daewoo. Perhaps it got a little heavy in oil and gas, but basically the machine tool division is solid. The company made a colossal blunder in buying Bobcat at the absolute worst time, paying for it with borrowed money. Last year Doosan Infracore laid off 1500 people and lost a fortune in the last quarter. It looks like somebody is going to get a “steal” on the machine tools business now.  IF THEY KNOW HOW TO RUN IT.

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Brian Beaulieu, my favorite forecaster of business for the machining crowd, recently did a webinar for the Precision Machined Parts Association. His outlook remains positive despite the commodities crash and the stock market’s recent haircut.

Beaulieu says that the oil, mining and agriculture downdrafts will make 2016 basically a flat year versus 2015, but not a bad one. Consumers are buying stuff with their extra gasoline money. Cars and light trucks are hot. Utility costs are lower with a mild winter. Employment is rising, banks are lending, retail sales are solid, deficit spending continues, and both residential and non-residential construction are improving.

Beaulieu sees a strong job market with 20% more demand for skilled labor than supply. Wages will go up almost 4% this year in our manufacturing world. This does not include increased costs from ObamaCare. He sees wage expenses going up 4% per year for the next four years, so the number of employees will be a critical judgment to keep in mind for all owners.

He sees the dollar weakening vis-à-vis the euro. This may have started already. He is positive about the next three years with military spending up in 2017 and 2018. He has consistently predicted a recession in 2019, and he still stands solidly on that view.

He seems unruffled by the vagaries of politics. I think the Obama experience of the last seven years justifies his view that a President does not really affect the economy that much.

Clinton, Trump, Sanders, Kasich—none of them will move the needle that much on the economy according to Brian Beaulieu. And he usually has been right for the past 15 years.

Question: Does the President affect the economy?

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18 thoughts on “Tangerine

  1. John

    Lloyd,

    I am glad your surgery went well.

    Regarding a President affecting the economy, I think one of the greatest powers the office has is platform to lead. With the inertia our government has, especially the unelected portion, the power to inspire and lead is perhaps the Presidents greatest asset. If a leader can inspire the many disparate factions to follow his/her vision, much can be accomplished.

     
  2. David

    Welcome back, Lloyd. Glad all went well and that you are back on the stump with your always interesting blog.
    The president and his policies can certainly impact the economic mood amongst the decision makers out there who really make things happen……..business owners and consumers.

     
    +1
  3. Steven Aguirre

    Hello Lloyd,
    Very happy to know that your surgery was a success. I’m always very busy and don’t really have much time to read through many emails unless it’s directly business related. However busy, I seem to make the time to read your blogs as they are very interesting and enlightening, Your style of writing is similar to a magazine is used to read… Invention & Technology.
    Have a great day!

     
    +1
  4. Charles D. Schultz

    Glad to hear your medical crisis has been dealt with so effectively.
    The Economy is far too complex to be greatly influenced by a single political leader. It can be moved by a concerted effort by ignorant fools who back discredited theories like “trickle down” over an actual study of the conditions present. The Gulf wars provided much more stimulus than the bail out packages ever did and if the US ever balances a budget the entire house of cards may come crashing down. We got close to balance once and it scared the economists and central banks to not have that borrower of last resort. We haven’t had a “free market” since the US started giving away land to settlers and railroads in the 1860s.
    It is hilarious to hear the talking heads declare that the “market moved” because somebody somewhere predicted a gold crash, a watermelon shortage, or a butterfly drop off. Where politics does influence the market is the Export/Import Bank and control over trading with certain countries.

     
    +1
  5. Dallas

    Welcome back Lloyd. I’m thankful the surgery was successful. Your blog is the only one that has continued to catch my attention.
    A short answer to your ‘president’ question is this president seems to have affected my economy in that our medical insurance costs increased substantially more under the “ACA” than previously.

     
    +5
  6. Jeff Poole

    Glad all went well with the surgery.
    An interesting parrallel came to mind between the surgery and machining. They obviously didn’t remove that large a tumor in one piece. That would have been quite a nostril stretch! So they removed it a bit at a time, likely by suction after cutting it into tiny pieces via an catheterized cutter of some sort. I can’t see them making THAT many trips back and forth to cut off ant retrieve little bites of the tumor. Hence my educated guess as to how they remove something like that. Much like machine work. We very seldom remove ALL the swarf in one chunk. Generally it’s by little bits at a time. Weird to think of it that way, but it is what it is.
    Again, good to see that all went well, your vision is saved, and life goes on.

     
    +1
  7. Mindy Mikami

    Lloyd,

    So glad your surgery was a success. I must say that I am amazed at how quickly you have recovered from such a serious surgery.

    Keep sharing your stories… they always make us think.

    Mindy Mikami

     
    +1
  8. Erik

    Congratulations on the successful surgery!

    Well, Presidents have swayed economies in the past, so I suppose it’s possible. But this crowd? I don’t see the dynamism required to inspire change, or the intellect for that matter. So here’s my Hope- Sanders and Trump are the Nominees, which spurs Bloomberg into an Independent run. Anyone with half a brain will be able to pick the qualified guy.

    Put a man in charge who understands the economy, and can work across the aisle. That’s a recipe to maybe move the needle. Maybe.

    A guy can dream.

     
  9. Big Al

    Sine(gerund)/cos(gerine)=tan(gerine)

    Sorry. I’m an engineer with a weird sense of humor

    Glad you are back well.

     
    +2
  10. Donnie

    The most important thing is that your procedure went well ! To me brain surgery is still scary stuff. The presidential thing has almost become of no importance. After watching Obama blunder along for 7 years, I have come to the conclusion that anyone could read a prepared speech from the Democratic or Republican party. I have noticed that I am now paying for health care insurance for someone that has no desire to work, thanks to Obama care.

     
    +6
  11. Jack

    Does the President affect the economy? They can.

    Our current President sure affected my company, and not for the better.
    And if they unleash the EPA on us, that will hurt business.
    Hurt enough businesses, will be a drag on the economy.

     
    +2

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