Financial topics

[aedens]

http://www2.standardandpoors.com/spf/xl ... EPSEST.XLS

341 issues (76.15% mkt val) rptd: initial good reports fading, actuals are 2% behind of estimates, and -36.1% behind last year...

Sales down 12.8 with 89 beating last year and 246 falling short

As Rpt EPS for 12 Mo Sep,'09 estimated to be negative ($-1.83 EPS) - first time in index history

This confirms what I had been noticing as earnings were being reported; revenues were down by massive amounts (typically 20%) as were earnings but the fact that analysts had finally gotten the earnings estimates close was being used as good news by the pollyannas.

This is a(nother) tought time to remain bearish as some LEI's seem to be suggesting we are coming out of the recession but there is simply no way that we are through the tough times given that housing has yet to bottom, the consumer is far from delevaeraged, the banks are far from deleveraged, our government is in debt up to its corrupt eardrums, and the stock market is still overpriced.

From my POV, however, I see this as one sure thing. The market is overbought and weakening, as we have seen before and all the wise old owls I listen to say that experience (along with Dow Theory) tells them that there is more correction to come from the stock market. The young, brash pollyanna's are excited and buy more and more each day, almost as if it were 2000 all over again. Yes, we are coming closer to a great buying opportunity on the long side (hopefully) but that is likely a ways off as new dark clouds begin to become visible on the horizon.

--Fred

From Peer review to date this October earnings we will see absolute MAKE and Break even on a GeoCorporate.
Obamamites cannot bend the curves other than up. SDR are real on the Horizon to date, i.e Hard currency plays.
No trade policy. GeoCorporate to playing winners and losers to scenarios over time so CDS can unwind.
Social acrimony growing. I can just shake my head to the pain to come. Thank you for numbers gentleman posted.

[StilesBC]

Marsh Aviator wrote:

"Having spent most of my adult life (50 Year old) as a libertarian/objectivist, now increasing doubt the continued viability of the capitalist system."

How so? We weren't capitalist in the first place. The US hasn't been capitalist for nearly a century. Capitalism embraces failure as much as it does success. Our governments have been seeking to eliminate failure by any means necessary. That is a patently anti-capitalist motive.

It is this attempt to eliminate failure that fostered the false perception of permanent prosperity (mandated rising asset prices) and encouraged so many to take on excessive debts. Hence the current crisis.

Perhaps you were misled by the faux-libertarians like Greenspan and Friedman who claimed on the one hand to be libertarian and on the other professed to be able to time and manage the economy. The two statements are diametrically opposed to one another. How Greenspan could be a Libertarian and simultaneously be Chairman of the Federal Reserve is such an absurd idea that thinking about it gives me headaches.

[Samir]

Well I have some older news, and some fairly recent news which hasn't shown up on these forums yet.

Tests of Banks May Bring Hope More Than Fear

“None of these banks are insolvent,” said a senior government official, who did not want to be identified before the public release of the test results.

The official added: “These are manageable losses.”

Paul Krugman, Nouriel Roubini, and Martin Wolf have all alluded to or explicitly said that (at least some) of our banks are insolvent. Yet, our administration says the results of their stress test -- which haven't been officially released yet -- show that none of our banks are insolvent, but some may need to raise more capital. Now I don't know how strict The Obama Administration's definition of insolvent is, but if a bank needs raise more capital isn't it effectively insolvent? William Black has gone as far as to suggest the stress tests are actually covering up fraud. While William Black doesn't follow Generational Theory -- thus believes proper regulation could have prevented this Crisis -- but he does seem to understand the extent to which fraud was committed.

Green shoot or dead twig: Can unemployment claims predict the end of the American recession?

Robert J. Gordon, a member of the NBER Business Cycle Dating Committee since 1978, wrote an article about how unemployment claims can predict the end of a recession.

My reasoning leads me to conclude that the ultimate NBER trough of the current business cycle is likely to occur in May or June 2009, substantially earlier than is currently predicted by many professional forecasters.

So all the economic indicators seem to be showing that things are still getting worse, but the rate at which things are getting worse is slowing down. None of the indicators have yet shown a strong deflationary force, only slight deflation (i.e. small drop in CPI).There seems to be a strong disconnect between the Stock Market and the economy. P/E ratios and other valuations don't warrant the extent to which we are buying, but the markets are going up regardless of economic data. It doesn't seem like people have fully learned the lessons a generational crash is supposed to teach.What is going on?

[John]

What's wrong with this picture?



John

[Matt1989]

How so? We weren't capitalist in the first place. The US hasn't been capitalist for nearly a century. Capitalism embraces failure as much as it does success. Our governments have been seeking to eliminate failure by any means necessary. That is a patently anti-capitalist motive.

There are a lot of definitions for capitalism, but what you're describing sounds very much like the essence of 'state capitalism.'

[StilesBC]

How so? We weren't capitalist in the first place. The US hasn't been capitalist for nearly a century. Capitalism embraces failure as much as it does success. Our governments have been seeking to eliminate failure by any means necessary. That is a patently anti-capitalist motive.

There are a lot of definitions for capitalism, but what you're describing sounds very much like the essence of 'state capitalism.'

No. Capitalism under any definition cannot exist simultaneously with central economic planning. If such a definition exists, it is perverted and wrong. "State Capitalism" is an oxymoron. What I am describing is "Corporatism" - the merging of corporate and state interests. Such an arrangement is diametrically opposed with capitalism.

I realize I'm being hard-headed on this. But it is unacceptable to me that central banking, government favoritism of certain companies, and selective enforcement of fraud be confused as characteristics of a capitalistic society.

[freddyv]

At least the Wall Street Journal is getting the Dow data right. That data is obviously not provided by Birinyi Associates, who I think is actually shilling the market because of previous positions they have taken, which I previously wrote about in this forum. Here's the WSJ page for P/E ratios of the major indexes.

http://online.wsj.com/mdc/public/page/2 ... dc_h_usshl

Dow Industrial 36.32 P/E
Dow Transportation 54.51 P/E
Dow Utility 10.67 P/E
Nasdaq Composite 12.97 P/E
Russell 2000 47.97 P/E
S&P 500 14.33 P/E

The S&P data is by Birinyi Associates and I imagine the NASDAQ data is also.

WHat really shocks me is the P/E for the Russell 2000. Small business should be out ahead of the economic downturn but it does not appear that way.

I am rather amazed to see this stock market rally continue, but in a good way. Except for the occasional moment of dispair I have never thought that we could just go straight down - history doesn't show any examples of that. What the market needs to do is sucker people in; get them to believe again; even those who were bearish all last year can now finally believe...and then...oh, it's just a pullback, just a bit of profit-taking...everything's fine, you'll be back to even in a day or two...hey, how'd we get to 5,500?

--Fred

[aedens]

Me - Hibernating Nuetral Capital.
US Business = Rent-dissipation. It describes what happens when possible investment capital is invested in the political class rather than on customers as we see unabated. When this happens, the wealth creation process is hampered considerably. So can we agree to disagree on the current path but observe how we can and could (and probably should) bounce in time. The story will be it does not matter if the cat is black or white but which one catches the mouse and the CCP told us this point blank. If you noticed
* Putin has followed on scope and size if you make the grade. The non producing elements of Leviathan “are tested and graded” as such to be viable in there Capital shift markets “note, John seen it on there production direction”. Lately, Hill policy is play both sides of the “economic” fence since they are the Broker of last resort and they let this mess escalate by capital theory misnomers which Hayek clearly warned us to. Winners and Loser’s which clearly the consumer should have “are” controlled since Government is the problem, and should be only in the defense business to basic security issues. From peer review to date we see predicated business cycle being rents and demand’s soft on existing GeoCorporate accounts moving forward. In a historical context the irony is the renowned British economist John Maynard Keynes, concluded his famous book, The General Theory of Employment, Interest and Money, which was published in 1936: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist."
Keynes also told somewhat said verbatim, yes this is true and countered with go send your children to the mines. The irony is they mined debt and will walk away as we are the bag holders in servitude as the road to serfdom “Hayek”. Remember the story of the mule that paid attention only after being walloped by a two-by-four? The Democratic-controlled state Legislature is like that. I am going to read a few more books, and wait until this fall before I consider “Human Action”

*About one in every five military generals will be fired for failing to pass a proficiency test, Deputy Defense Minister Nikolai Pankov said Tuesday. Fifty of the military’s 249 generals failed the unannounced test, which is part of ongoing defense reforms, said Pankov, who holds the rank of general. “We do not intend to leave officers who are not up to par for their positions and high titles in the armed forces,” Pankov said at a news conference, RIA-Novosti reported. Sixty-six generals who passed the test will be kept on, while the remaining 133 will be dismissed amid cutbacks envisioned in the reform, Pankov said. The main criteria for the dismissals, besides failing the test, are poor health and old age, he said, Interfax reported. The test has also been given to 85 percent of army officers so far, Interfax said. The Kremlin says the reforms aim to turn Russia’s outdated army into a mobile fighting force. Under the reforms, the armed forces will be cut to 1 million servicemen from more than 1.1 million. The number of officers is to be more than halved to 150,000. Pankov said about 36,000 officers will be dismissed this year.

http://www.moscowtimes.ru/article/1010/42/376678.htm


hey, how'd we get to 5,500?

--Fred
Good point Sir I enjoy the people here. So many are doing whatever it takes "nongeo" to survive until October's numbers. EBIT

[freddyv]

At least the Wall Street Journal is getting the Dow data right. That data is obviously not provided by Birinyi Associates, who I think is actually shilling the market because of previous positions they have taken, which I previously wrote about in this forum. Here's the WSJ page for P/E ratios of the major indexes.

http://online.wsj.com/mdc/public/page/2 ... dc_h_usshl

Dow Industrial 36.32 P/E
Dow Transportation 54.51 P/E
Dow Utility 10.67 P/E
Nasdaq Composite 12.97 P/E
Russell 2000 47.97 P/E
S&P 500 14.33 P/E
--Fred

I have finally found one source that seems to suggest an alternate P/E ratio for the Nasdaq, and guess what? It's a lot higher than normally reported, which fits right in with all the other verified P/E ratios.

http://www.bullandbearwise.com/NASDAQ100RealPE.asp

NASDAQ 100 Real Price-to-Earnings Ratio: 54.31

--Fred

[aedens]

The Moscow Times » Issue 4140 » Inside Russia
A Bad day at the office.

Moreover, since Russia's elite keep their assets in the West, they understand very well that it is better to battle their own businessmen than try to fight Western armies. What's more, such conquests fill them with a feeling of importance and strength. There is a simple, unwritten agreement between Russia's ruling elite and the siloviki who protect them: The authorities closest to the Kremlin have a free reign to rob the wealthiest Russians, while other law enforcements agencies get to plunder the rest. The problem is that this agreement collapsed when the crisis hit. If the economic situation deteriorates and the people start staging massive uprisings, the police, who have acted like an occupying force toward the people, will no longer risk their necks to protect the authorities from the angry hordes. They will join the mob and start marauding for themselves.

Try not to figure these wonderful souls in the Kremin out but please give me dollar to survive.

"We should admit, in all honesty, that direct government support of the stock market achieved nothing," the president said. "The stock market develops according to its own laws." A unified property tax, however -- an idea that Prime Minister Vladimir Putin revived last week and was brought up again by A Just Russia deputies on Tuesday -- is worthy of discussion, he said.

I see trouble ahead.... but what else is new in the V and V index