Sign "O" the Times

(Chart courtesy ZeroHedge)

(Chart courtesy ZeroHedge)

I’m not worried so much about yesterday’s stock market slide (prices fluctuate, as has been famously noted) as I am about the apparent reason:

Wall Street stock prices fell on Wednesday, dragged down by economic reports portraying U.S. factories growth as tepid and China in its worst manufacturing contraction since the global financial crisis.

The data aggravated investor anxieties that global economic growth might be sputtering, sapped a rally in European equities and gave Asian stock markets their worst day in months. Prices of U.S. Treasuries and other safe-haven government debt eased.

The reports, showing U.S. manufacturing growth stayed at a two-year low in September and Chinese factory activity shrinking to a 6-1/2 year low, spurred a selloff in U.S material and industrial stocks.

And today’s news isn’t looking so hot either.

Now about that chart above. Caterpillar’s fortunes have long been seen as a leading economic indicator, but to see just how leading, let’s go to ZeroHedge:

We have been covering the ongoing collapse in global manufacturing as tracked by Caterpillar retail sales for so long that there is nothing much to add.

Below we show the latest monthly data from CAT which is once again in negative territory across the board, but more importantly, the global headline retail drop (down another 11% in August) has been contracting for 33 consecutive months! This is not a recession; in fact the nearly 3 year constant contraction – the longest negative stretch in company history – is beyond what most economists would deem a depression.

Hang on tight, kids.