The document discusses business relationships and the use of technology. It talks about how business should focus on treating partners as equals rather than customers, and using technology like social media to strengthen relationships rather than isolate people. It suggests becoming an expert at connecting people using technology to both increase the number of connections and enhance their quality.

1. Success together
This past quarter we congratulated our partner Emerson
Group 125 years as one of America’s leading providers
of appliances. We wish longevity and prosperity to all of
MISA’s partners and affiliates and look forward to many
years of collaboration with them. These relationships we
have created and will continue to create form the base of
all our operations.
Business is not just about making a connection. It is
about treating everyone as an equal partner rather than
an inferior client or customer. We believe this to our
very core, because there are never just those who need
and those who give, but those who work.
Sadly such interactions are swiftly becoming a dying art,
a whisper of honor and proper conduct from a pre-
internet age, giving way to the cold, inhumane business
of today transacted with zeroes and ones rather than
humans and their operations.
But there is a third way, a way in which stodgy honor
and hip technology both lead to an efficient outcome.
Modern telecommunications are effective tools not when
they dissuade human interaction but when they increase
your circle of influence. Facebook was never meant to be
a means of destroying relationships but to strengthen
loose ties and to form new ones. YouTube was never
meant to isolate you from others but to find yourself by
connecting with like-minded people.
Business too does not have to be a rapport with a comp-
uter and its calculations. Become an expert connector
that uses technology correctly not only to increase the
quantity of connections you have but also to enhance the
quality of those relationships. A new era awaits when we
actually know how to use the marvelous technology we
ignorantly use today.
July–September Q2 2015Quarterly

2. -2.00
0.00
2.00
0.00
0.50
1.00
Jul-14 Oct-14 Jan-15 Apr-15
-0.50
0.00
0.50
-4.00
-2.00
0.00
2.00
4.00
6.00
Canada industrial production MoM
China industrial production MoM
Mexico industrial production MoM
Japan industrial production MoM Q2 ‘15|2
Inadvertent China
The past few quarters the US economy’s strong surface
has given way to soft bedding underneath, evidence of
what is deemed “soft growth.” Just like the US’s 2008
recession led the whole world to economic decline, stock
markets throughout the world plummeted this quarter
because of China’s economic woes. It seems we are two
birds of a feather despite our differences. Arguments
have been made that China’s deliberate devaluation of
the Yuan (CNY) and a geopolitical move to link our
divergent nations with economic ties have led to this
setback in what was expected to be a growth period for
the US.
Not that China has really been hit yet as the stock
markets are an indication of future events based on spe-
culation rather than the crisis itself as China continues
to sustain substantial growth. The frenzy has come about
from the overall trend of lessening growth as China’s
economy moves into a more mature landscape, that of a
second world country.
The US continues to see little to no growth in industrial
production having grown 2% year-over-year (YOY) while
Canada’s production has slowly decreased at 0.3% YOY
(World Bank). Japan saw a little more growth than the
US while Mexico’s industrial production has also stag-
nated. The US looks anxious to grow while the world is
still apprehensive.

3. 95.00
100.00
105.00
110.00
115.00
120.00
125.00
130.00
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
Canada CPI
Mexico CPI
Japan CPI
China CPI
NAFTA hikes
While there are many benefits to being close to the US
whether physically by proximity to its borders or econo-
mically as a member of the North American Free Trade
Agreement (NAFTA), in past quarters a strong USD has
bumped Canada’s and Mexico’s Consumer Price Index-
es (CPI) while Japan and China have seen unbelievably
stable prices in the marketplace.
Canada’s prices lifted 1.3% and Mexico’s 2.3% YOY.
On the other hand Asia operated on technically naught
with a 0.1% tick up for Japan and 0.4% deflation for
China (World Bank). What is most surprising is not that
the NAFTA nations are seeing inflation, but that they
are really seeing so little despite strong pressures in the
world market. In fact, China’s invulnerability in this
regard is suspect.
Q2 ‘15|3

4. 1.0
1.1
1.2
1.3
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
6.0
6.1
6.2
6.3
12
13
14
15
16
90
100
110
120
MXN
CAD
CNY
JPY
The implications of a strong USD are obvious with im-
ported goods to the US receiving significant dividends
and with costs for the summer round of tourism for the
American public proving to be more manageable than
anticipated.
Now that the summer is over there is some slippage in
the supervaluation of the USD as exchange currencies
have begun to top off at their saturated levels, cementing
the USD’s defense for the near future. Although some
may argue this is an unnatural imbalance, the US has
proven itself a warning sign for the world economy. So
while national markets continue to feel the effects of
crisis, hopefully the USD’s value is a sign that the world
economy will pull out of economic turmoil.
Cementing a strong US dollar
This quarter the United States Dollar (USD) has shown
incredible strength universally, causing every exchange
currency to plummet in value. The Canadian Dollar
(CAD) was displaced as the USD’s unofficial alternative,
decreasing 16% in value, exchanging to the USD $1.07–
$1.28 YOY. The Mexican Peso (MXN) similarly deflated
18% and the Japanese Yen (JPY) 17% YOY in exchange.
The only exception to this rule of mass inflation in com-
parison to the USD is the Chinese Yuan (CNY) which
has ignored the rising rates across the board both figur-
atively and literally as China has made it a political point
to stabilize its currency in spite of world market press-
ures. The CNY grew a balmy 0.14% YOY, clear evidence
of tampering on the national treasury level.
Q2 ‘15|4

5. 0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
230
231
232
233
234
235
236
237
238
239
240
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
3-month Libor
Federal funds, effective
CPI-U
Prices at grocery and retail stores continue to squabble
about growing or dipping, which is a pleasant sign seeing
that the supervaluation of the USD is not caused by
inflation at home. The CPI-U, published by the Bureau
of Labor Statistics (BLS), took a 2% detour before re-
turning to 239 points YOY, a minor indicator that the
economy will benefit from the forthcoming growth per-
iod predicted to come anytime from years ago to years
ahead.
Waiting on the world
The rumors keep making their rounds and being squel-
ched day-in day-out that the Federal Reserve Bank (FRB)
is gearing up to raise their federal funds target rate and
consequently all interest rates in the US. The “federal
funds target rate,” which is considered the de facto in-
dicator of FRB chairman Janet Yellen and the board’s
position on the financial market, continues to sit at
0.25% as publically announced back in December 2008.
On the other hand the “federal funds, effective” shows a
little more resiliency growing 36% YOY, which is tepid
considering it is merely a hike of 0.05%. The 3-month
Libor as well grew 24% YOY which is also just a meager
0.08%. Either way the federal rates are inching upward
like they haven’t in years, cranking the rumor mill fur-
ther that someone’s hand at FRB will tilt.
Q2 ‘15|5

6. 4
5
6
7
60
70
80
90
100
110
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
US unemployment rate
Consumer confidence
Because of the lack of disposable income available for
the working class, consumer confidence in the market
has shown signs of deterioration this quarter even as it
has grown since January of last year. And as younger gen-
erations have entered and laid claim to the consumer
market, they have shown strong allegiance to certain
goods and brands while showing a strange aversion to
consumerism as a whole. The Conference Board (CB) re-
ports that consumer confidence has grown 12% YOY,
but the growth has been marked by seasonal effects as
CB has adjusted down its data the past few months.
Working but weak hands
The US unemployment rate continues to drop according
to research conducted by the BLS, but the drop hardly
constitutes a celebration as analysts continue to overesti-
mate the rate at which the US’s jobless are assimilated
into the working class.
Unfortunately there are many who hold 5% as the gold
standard for unemployment when in previous decades
that was sign enough for impending economic crisis. So
while unemployment has decreased 15% YOY, no one is
celebrating the shortcomings, especially when household
income has plummeted and is presently lower than it has
been in 25 years.
Q2 ‘15|6

7. 6
7
8
9
10
11
8
10
12
14
16
18
20
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
x100000ST
65
70
75
80MillionST
US crude steel
China crude steel
Japan crude steel
Mexico crude steel
Canada crude steel
Regardless of the temporary movements of the industry,
the steel mills are churning and the cogs of the steel
machine are turning, reminding us once again of the im-
portance of steel and its place in our future economy and
lives. As more high tensile steel is produced, the same
product will be made lighter but also more expensive,
leading to a decrease in the tonnage and hopefully, an
increase in profit.
Churning out a steel future
China continues to produce a lion’s share of steel goods,
but like the rest of the steel market has slowed slightly
since last year. China’s booms and busts are more pro-
nounced than other nation’s steel output because of
various pressures both economic and political, with a
4.6% decrease in production this year. Japan also saw a
drop of 4.9%, US 9% and Canada 5% YOY. Meanwhile
Mexico instead saw a slight uptick of 2.4% YOY reports
International Iron and Steel Institute (IISI).
It is safe to say that the increase in production in Mexico
is directly linked to the larger decrease in US steel pro-
duct as steel production gains traction in the Mexican
market, although the adoption is proving to be slow with
construction costs and training.
Q2 ‘15|7

8. While a lot of US steel production is transferring to
Mexico, the steel is not being shipped back into the US
until it is made into semi-finished product as Mexico saw
14.5% growth in imports this YOY, accounting for only a
third of their increased production.
Changing of the guard
A change of approach is occurring as the US switches
sourcing for its steel consumption from the old guard
toward new frontiers. The challenges of relocating steel
operations not only from the US but also from various
countries hit with legislation and economic motivations
are being rationalized as older sources of US steel like
Japan and Canada import less steel into the country and
newcomers like Mexico and China slowly get larger
pieces of the pie.
Japan took a hit of 25% YOY in their steel imports into
the States while Canada as the US’s largest importer of
steel dove 8% YOY (US Department of Commerce). On
the other hand China saw 5% growth in their steel im-
ports as they have figured out what imports constitute
healthy and unhealthy goods for the market.
Q2 ‘15|8
0
1
2
3
4
0
2
4
6
x100000ST
China steel imports
Mexico steel imports
Japan steel imports
0
1
2
3
0
1
2
3
4
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
Canada steel imports

9. $1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$150
$250
$350
$450
$550
$650
$750
$850
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
Aluminum
Cold Rolled
HD galvanized
Hot Rolled
Scrap
This quarter however looks more promising, uncovering
a stability that may forecast the near future with a 3–5%
price increase for all steel commodities since April. Few
imagine that prices will increase as drastically as it fell,
but they are forecast to sit at their deflated rate for the
time being.
Paddling out
Taking a nasty nose dive earlier this year, a 35% pre-
cipice that hit universally, steel spot prices have since
bottomed out. This price decrease mirrors the 10.8% dip
in steel product this February according to American
Iron and Steel Institute (AISI).
The numbers for the year are just as catastrophic at
about a 25% price decrease for both steel and alumi-
num (CRU Monitor, LME). Aluminum has been in a
freefall since December, but will probably see a sharp
incline within a few months as is typical with the volatile
commodity.
Q2 ‘15|9

10. 25
27
29
31
33
35
37
39
41
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
x100000ST
6
7
8
9
10
11MillionST
US carbon inventory
US steel shipment
US carbon shipment
US steel inventory
On the other hand the short-term numbers are not so
dire showing a 7% drop in inventories since February,
whether in response to the dipping prices or directly
caused by a decrease in crude production, and shipments
spiked 9.4% since last November.
Steel-sourcing gulf
Steel warehouses throughout the US continue to stock-
pile large inventories not in tandem with but in spite of
diminishing shipments of steel in the States. A discon-
nect has been in the making for some time where the
source of steel for manufacturing and value-added pro-
cessing is not new material being shipped for just-in-time
delivery but stored by years’ worth in-house.
Data for the year published by Metals Service Center
Institute (MSCI) show US steel and carbon inventories
increasing 4.8% while shipments have dipped 7% YOY.
This is the worrying trend that the US has followed for
many years, increasing inventories and slipping ship-
ments.
Q2 ‘15|10

11. 0
10
20
30
40
0
5
10
15
20
25
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
45
95
145
195x10000Units
US automotive production
US automotive sales
Canada automotive production
Mexico automotive production
Canada automotive sales
Mexico automotive sales
Year of the chevron
Lightning strikes twice in the same place about as often
as the automotive industry witnesses a boom period both
for producing and for buying automobiles, but that is
precisely what is occurring in the market with both auto-
motive production and sales achieving nearly universal
growth across the board.
The US jumped 4% in production and 5% YOY in sales
according to Automotive News (AN), while Mexico had
stagnant production but grew a walloping 10% YOY in
sales. Canada however lost 2.5% production and grew a
measly 0.4% YOY in sales.
Q2 ‘15|11

12. 280
300
320
340
360
380
400
420
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
BillionsUSD
Residential construction spending
Non-residential construction spending
Welcome home
Residential construction has had a welcome return to
levels of competition with non-residential construction
this past year, which shows us once again that the econ-
omy will have another golden age of suburban housing
according to the US Census Bureau’s latest seasonal ad-
justments to its barometer on US construction.
Private construction spending has shown itself to be in a
bull market, increasing at dramatic rates since March as
non-residential construction spending jumped 15% and
as residential construction grew 13% YOY. While other
key indicators of the US economy show signs of wear
and tear, the market most affected by the 2008 crisis
now shows healthy and sustainable growth.
Q2 ‘15|12