Corporae earnings have declined 90%

Escrito el 16 mayo 2009 por Rafael Pampillón en Economía de EEUU

While the stock market is up sharply since early March, the economy as well as corporate earnings continue to suffer. The chart helps provide some perspective as to the magnitude of the current economic decline. The chart illustrates that 12-month, as-reported S&P 500 earnings have declined over 90% over the past 20 months (with over 90% of S&P 500 companies having reported for Q1 2009), making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative. 


Fuente: http://www.chartoftheday.com/20090515.htm?A


Fernando Peral 16 mayo 2009 - 14:41

Just another symptom of how ineffective are rescue measures based on pumping liquidity to the market and lowering artificially interest rates.

JOSE LUIS REVILLA ESCUDERO 17 mayo 2009 - 11:09

Print more MONEY !!!… When Public Deficit does not matter.

39 banks rescued by the government in the US.
A manipulated “stress test” to avoid big impacts in the stock exchange.

Interest rates at 0%.
Larry Summers, ex-Wall Streeter, commanding the situation.

Dollar at its lowest against major currencies.
China, Rusia, and the Middle East countries claiming for a new world reference currency.

Obama trying to fear big US corporations not to evade taxes in key offshore financial centres.

China thinking about the possibility of converting all its T-bonds into other currencies investments, to avoid its dramatic exposure to US dollars. Driving therefore, in this likely scenario, to a huge drop in the US dollar quotation.

Tim Geithner protecting Citi and Bank of America from bankruptcy.

Has anyone thought about the huge US Public Deficit ?… My friends, taxes will for sure rise for the high incomers.So, where is JOE THE PLUMBER ?

Are we really that good ?
Does Mr Obama´s optimism draw the real situation ?
Are we playing media games again ?

According to the international markets evolution during the last two weeks, it seems the worst has passed by. Indexes around the globe have picked up the lost ground during the last 6 months.
The first quarter results I referred to in my previous article ” BEARISH SEASON is over”, seem to have kept this suspicious optimism.

But, my vision about it, as a private wealth manager, is resumed in one single question:
What´s next, folks ??

The financial recovery will seed the real economy future evolution ??… Or the real economy will continue suffering much longer ???

Since I have to give an answer to my customers almost everyday, I decided to begin buying partial stocks in key “rescued” banking institutions, reinforcing this strategy with defensive companies, such as pharma companies with some due “blockbusters” to be released, and some high yield utilities corporations.

Obviously, equity not accounting for more than a 15% of the total investments.

My worries now stand at the point if politicians, economists, experts, advisors, … are not really doing the same that supposely created the current turmoil… that for some people, it is the worst financial crisis in history. That is:

1) Money at 0%. That means, pure savings are no longer an option again.

2) Improve consumer rates. That means, to come back again to the exhacerbated consumer feeling, helped by money at 0%.

3) Rescued banks. No penalty for their wrong doing.

4) To ease monthly payments to those with forclosures risk.

5) To provide a social insurance policy, to avoid huge monthly medical payments… So, the money till now invested in these insurances, will go directly into the consumption of other goods. This, together with the “cheap money”, more inflation.

6) A huge Public Deficit.

Don´t you think that maybe we are saving the kids from dying into the river, by creating the conditions of a future tsunami ?

Jose Luis Revilla Escudero
WWShares, Inc

stock investments 17 septiembre 2009 - 17:10

stock investments…

Your topic Talking Biz News ” Is media overplaying housing story? was interesting when I found it on Thursday searching for stock investments…

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