Juniper Networks struggles with service providers as US-China trade war continues to suck

Networking giant Juniper has had another challenging quarter – this time it was service providers, not cloud vendors, causing Cisco's nemesis grief. The company reported that for the three months ended June, service provider custom dropped 15 per cent to $447m. The demand from enterprises fell 6 per cent, down to $370m in …

[Palpy]

I'm quite surprised, really --

-- that the world economy has not fallen into a recession. Yet.

The so-called business cycle generally drops into a "correction" every 6 to 10 years, so we're overdue. (Chart: Fed Reserve Bank recession indicator.) I see the economic consensus, as much as my shallow attention span allows, being that an economic "slowdown" is to be expected, though expectations are that it will be relatively minor and indeed amount to a "market correction" rather than a full recession.

However. Martin Wolf in the Financial Times:

"The issue to worry about then is not the state of the short-term cycle. It is perfectly likely that there will be a modest and manageable slowdown, with nothing much damaged as a result. The worry must rather be over the context in which such a slowdown might occur. It is the political and policy instability, combined with the exhaustion of safe options for credit expansion, that would make handling even a limited and natural short-term slowdown potentially so tricky."

Here is where destabilization of global trade becomes an issue. And where the article to hand -- Juniper Networks and the way tariff wars cause difficulties and expense to companies -- comes into play. Any business which sources materials and labor from China, the US, or the UK, now faces uncertainties on top of economic cycling. It doesn't matter if you make routers, cars, or HVAC systems -- if you're big, then your supply chains are global. Fear, uncertainty, and doubt tend to drive economic downturns down, downer, downest. And we have two large economies, the US and the UK, playing with matches in ways that are likely to ignite a global FUD fire -- obviously, Brexit in the UK and tariff wars in the US.

We also have political instability in parts of the Middle East: In Syria and Iran, and in the Yemeni civil war -- where the UAE and the Saudis are, or were, deeply involved. This wouldn't matter much if the global economy did not run on oil. But to a large extent, it does. Thus it's a serious threat to stability, with attendant FUD even if the Strait of Hormuz does not become a free-fire zone.

Europe faces a refugee crises which will not abate (North Africa is a humanitarian nightmare, especially Libya and Sudan, and people are running away because they want to stay alive). The political situations in Italy, Turkey, and Greece have become volatile (partly) as a result of the influx of refugees.

So, given all this stuff, it is exactly the wrong time for Trump and Johnson to hurl wrenches into the gears of the global economy.

Well, anyway. We continue to draw breath. And I may be full of pessimistic crap; I usually am. But you might put your money in a safe place (not bitcoin...) and pray for rain.

[Pascal Monett]

Re: I'm quite surprised, really --

It may be precisely the wrong time, but having spent half a century on this planet, I have the feeling that, whatever governments do, people will survive.

I lived through the petrol crises of the 70s, the bank crises of the 2000s, and we're all still here, living, breathing and consuming.

Yes, it would be nice if major governments had their shit together, but in the end, my opinion is that governments, in general, are just there to ensure that people can continue living their lives.

It is not governments that make the economy, it is people. And, try as they might, governments can only make it more difficult for people to thrive. So the best you can expect from a government is that it does not get in your way. So yeah, the US is fucked, and the UK likely will be soon. But all that is temporary (for certain values of temporary). In the end, the people making the economy go will end up all right.

Or they will be dead. Toss of the coin, really.

[Palpy]

Re: I'm quite surprised, really -- survival and whatnot.

Mmmm, Pascal, I somewhat agree. My father lived through the Great Depression in the US, and it shaped his thinking in good ways. (Resourcefulness, care for the common good, respect for working people, an understanding of value.) Mind you, he was a very young man then, not in late middle age with the savings he'd hoped to retire on gone in the Crash.

You and I are of an age; I missed being drafted for Vietnam by one year, and Tricky Dick left office in disgrace the year I graduated high school. Explains some of my political tics, I suppose.

But now, in retirement, I would like not to see my pension evaporate. I would like not to see the money I've paid into social security taken to underwrite a bankers' bailout. I would like not to have my IRA evaporate. Things like that happen in an economic crash.

Yeah, I would survive, Pascal. I could find a job again, some kind of work, and start over. I live in a particularly privileged and sheltered part of the Western world. Very lucky that way.

But the point is, thick gits in high positions really do make stupid decisions which fsck things up for other people. Even where I live. In a serious recession, or a full-on depression, the big guys globally will make out fine and common people -- not just talking US or UK now -- will lose their jobs, their savings, their pensions.

And yes, they too will survive -- although because poverty and stress (linked) are well known to shorten lives, the people that get economically fscked over in a recession/depression will actually not live as long as they might have. On average. Nor will they live as healthily as they might have.

So, in the jargon of our youth, Pascal, I don't fully dig the rose-colored shades, man. Like, there's some sh*t the high brass cats pull that damages lives, man, worldwide. And that ain't cool. Ain't cool at all.

[Anonymous Coward]

Re: I'm quite surprised, really --

There are people who would argue that "business cycles" are actually just people trying to read patterns into patternless data, because that's what people do.

[Anonymous Coward]

"humanitarian nightmare, especially Libya and Sudan"

Just a correction: Libyans are not escaping Libya, despite the factions attrition war ongoing there - they work (and make money) as a terminal for people arriving from many other African countries moving to Europe - and not all of them are refugees escaping places in a humanitarian crises - many are plain emigrants hoping to find a better job in Europe - and that's another outcome of increased options to communicate and send money abroad at cheaper costs and less controls. A large number don't come by boat across the sea, they simply overstay tourists visas.

[Blessed Cheesemaker]

Re: I'm quite surprised, really --

Basically I agree with everything you said. My opinion: the top people in banking & investing do *NOT* want a recession now, so they are doing everything they can to prop the economy up, while they are getting everything they want from the current government (tax cuts, subsidies, etc.).

Once a Democrat is elected, these same people will be screaming about the debt, deficits, spending on social programs, etc., and then *bam* we will have our recession.

Look at what Bush did to the US economy, and nothing bad happened until the end (and then they blamed Obama for everything). I fully expect we will see the same thing again.

[Anonymous Coward]

weakness

""We believe our service provider relationships remain strong and the weakness we're seeing is tied to our customers business model pressures"

Wasn't there another, more worrisome "weakness" in Juniper Netowrks?

https://en.wikipedia.org/wiki/Dual_EC_DRBG#Weakness:_a_potential_backdoor