Another good chart from Ron Griess of Thechartstore.com, highlighting changes in trailing 4 quarterly earnings of the S&P500:

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Category: Earnings, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

52 Responses to “SPX Earnings Changes”

  1. YY says:

    While the decline in 2007 is from a higher basis than 2000, one would be hard pressed to cap the bottom in earning to be so close to the 2001 bottom…

    Macro wise, it appears quite optimistic. All same, 741 on S&P is 15% below where we stand.

  2. Super-Anon says:

    You know the government isn’t going to be able to cover all its increased spending over the next few years by taxing consumers or their savings – consumers have already been looted and completely bled dry.

    That suggests to me that the government is going to have to turn to corporate earnings to fund their operations.

    Maybe it’s safe to assume that the next 5-10 years of corporate profits are going to have to be claimed to cover government expenses if the country isn’t going to go bankrupt?

  3. danm says:

    Not sure it’s going to be taxes covering government shortfall. It’s so much easier to just have the fed print some more money to cover expenses.

  4. Marcus Aurelius says:

    Super-Anon:

    We’re already bankrupt. It’s all over but for the admission. There’s no way our level of national debt can be repaid without the outright printing and distribution of “free” taxable dollars. The only other option is default. This is the reality of our situation. What we are involved in, at this point, is a charade – promulgated for the sole purpose of keeping up appearances.

  5. dead hobo says:

    danm Said:
    April 14th, 2009 at 10:56 am

    Not sure it’s going to be taxes covering government shortfall. It’s so much easier to just have the fed print some more money to cover expenses.

    reply:
    ———————
    No. The secret plan is to continue borrowing until nobody will lend. Then Uncle Stupid will inflate their way out AND hire GS to manage the debt so that is goes away.

  6. leftback says:

    A good day at Schadenfreude Asset Management, where we are long SRS. Whatever the bankstas may be able to dream up, we find it hard to believe that the REITs can possibly buy enough lipstick to dress up this Q1 pig.

    Sooner or later, someone is going to bring in a real stinker and change the mood of this market. Talbot’s miss will not be the only one in the retail sector, and the telecoms are not going to be very clever either.

    The biggest pig of them all is coming on Friday. Who knows what mark-to-fantasy can do for Citi?
    http://www.nakedcapitalism.com/2009/04/john-dizard-geithner-and-citis-days.html

  7. What is more concerning is the fact the chart commentary is using the “average” P/E going back to 1928. At bear market bottoms, the market generally does not trade at the “average” P/E –it is usually much lower. Say it is 10, then the S&P would be at 457. Ouch.

  8. dead hobo says:

    leftback,

    I’m not particularly strong on reading daily technical details, but here’s something interesting I noticed. Yesterday and today, according to yahoo, declining stocks beat advancing stocks, but up volume greatly exceeded down volume. In other words, they moved in opposite directions. Given today’s higher volume, if someone is trying to prop the markets, they are going to go broke soon. Unless good news arrives soon, I don’t think even a few more bogus earnings reports could save this one.

  9. Steve Barry says:

    Given the depression, debt bubble, and socialist banking system, the P/E should bottom at 6 on reported earnings (if we get any).

  10. dead hobo says:

    Update. Down volume is now in the lead. Game over.

  11. CNBC Sucks says:

    Super-Anon Says:

    “You know the government isn’t going to be able to cover all its increased spending over the next few years by taxing consumers or their savings – consumers have already been looted and completely bled dry.”

    Bullshit. The United States of America remains by far the richest, fattest nation on the face of the Earth. The problem with the U.S. is not a lack of resources, but how those resources are constipated in the bowels of the richest 5 – 10% of this country. I have come out of blogosphere retirement to remind everyone of The Great CNBC Sucks Registered Republican Max Tax Plan: http://www.ritholtz.com/blog/2009/03/irrational-exuberance-we-are-now-below-it/ . Income is not the only thing that can be taxed; assets can.

    It is time for openly and unabashed confiscatory-level progressive federal income and asset taxes on the wealthiest Americans. Let them try to flee overseas; we will find them and tax them or their families and holdings here.

  12. Hal says:

    so–just how inflated will earnings be as a result of mark to fantasy? WFC record earnings of 3 bil, Goldmans Chutzpah, Citis report coming up and as well BAC.

  13. DL says:

    According to Obama, we should all be thrilled that the government has given money to the banks.

    From his speech today:

    “The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.”

    http://money.cnn.com/2009/04/14/news/economy/obama_economy/index.htm?postversion=2009041411

  14. DL says:

    CNBC-sucks @ 12:22

    Are you aware that you have competition?

    http://fixcnbc.com/

  15. Onlooker from Troy says:

    >>DL Says:
    April 14th, 2009 at 12:28 pm

    According to Obama, we should all be thrilled that the government has given money to the banks.

    From his speech today:

    “The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.”<<

    Yes indeed, we CAN borrow our way (some more) to prosperity and wealth. Really, we can.

    For some time now I’ve wondered about this reliance on credit/debt to fund the daily operation of our businesses (and increasingly for family finances, although not in my house). It didn’t really compute for me how we could operate on that thin limb. But I let myself be talked into the premise, since I don’t have a high level of finance/accounting knowledge (trained in the bio sciences). I just didn’t get it.

    We are truly hooked on the drug though, aren’t we? And withdrawal is traumatic and harsh. God help us all.

  16. cjcpa says:

    DL
    I roll my eyes in sympathy with you.

    “a dollar of capital in a bank can actually result in eight or ten dollars of loans ”

    but if you use that dollar to make payroll. Then not so much.

    $$$—>AIG—->black hole
    for example.

  17. DL says:

    I’m starting to wonder if maybe the Market Gods have finally thrown enough bears into the volcano.

  18. cjcpa says:

    Neophyte asset management is going to put on a short trade again today.

    Somewhat sympathetic to the question from Drollere (sp?) over the weekend…

    what the hell do I do with my money? I have a short term treasury fund that is paying .02%.
    That’s right, at this yield, in a hundred years, I could earn 2%.

    So, you take one percent of your portfolio, cast it into some double or triple inverse fund, and hope to double your money. If so, you achieved 50 years of gains in one month. Sounds stupid, but that is the point where many say there is a lot of money on the sidelines. Yes, there is.

    Those of us who took the science track in college find ourselves unable to put our dollars to work.
    One of the many costs of this whole debacle.

    cjc

  19. Mannwich says:

    I threw caution to the wind and picked up a chunk of FAZ at $9.79 today. Still hanging in there with big positions in SRS and QID as well. I can wait for sanity to return to the markets. Matter of time.

  20. hopeImwrong says:

    Onlooker – from Troy Michigan?

    The gov’t can always repackage their debt as NCGOs (non-collateralized Gov’t Obligations), funnel it through Goldman, who will break it up into tranches, all rated AAA by the three agencies, and resell them to investors (banks, hedgies, whoever), while getting CDSs on the NCGOs from AIG. It reduces the risk to Zero.

  21. DL says:

    Mannwich @ 12:48

    At the very least, the XLF has got to return to its 50 day MA. And soon.

  22. CNBC Sucks says:

    DL, there will always be only one The Great CNBC Sucks. But of course, I know about that bleeding-heart liberal Dean Baker’s Fix CNBC movement. I even created an animated ad on the right sidebar of my blog linking to Fix CNBC. It’s the one where Steve Liesman is burning a hole through Michelle Caruso-Cabrera’s blouse with his red laser vision.

    As a blogosphere retiree, I have been lurking Ritholtz’s blog (who actually calls it The Big Picture?) for weeks. I have to say, I still LOVE reading the comments and I very much empathize with my old peeps (from the sentimental TypePad mid-2008 days) Jeff, lefty, karen, Bruce the hamburger-eating Tennesseean, Wunsy the Liberal, and the hard-to-read Libertarian Mark E. Hoffer. I am no longer so gleeful when I think of Boobs for Barack Obama, but then I keep remembering that voting for the Republicans is like injecting a bottle of Chlorox Bleach directly into one’s own aorta.

  23. Mannwich says:

    @DL: And then some. After this fake bank earnings season is over, it’s going to be sell in May and go away. The slow slide will resume……

  24. cjcpa says:

    CNBCSucks,
    you may find amusement in the pending trademark applications for MONEY HONEY.
    if you felt like it, you could find them at http://www.uspto.gov but I’ll paste one here.

    Word Mark MONEY HONEY
    Goods and Services IC 038. US 100 101 104. G & S: Providing online chat rooms and electronic bulletin boards for the transmission of messages among users in the fields of children’s education and entertainment
    Standard Characters Claimed
    Mark Drawing Code (4) STANDARD CHARACTER MARK
    Serial Number 77084001
    Filing Date January 16, 2007
    Current Filing Basis 1B
    Original Filing Basis 1B
    Published for Opposition August 28, 2007
    Owner (APPLICANT) Bartiromo, Maria INDIVIDUAL UNITED STATES c/o Frankfurt Kurnit Klein & Selz 488 Madison Avenue New York NEW YORK 10022
    Attorney of Record Edward H. Rosenthal
    Type of Mark SERVICE MARK
    Register PRINCIPAL
    Live/Dead Indicator LIVE

    ————-
    that’s right, it’s for the children.

  25. dead hobo says:

    Unless the good news become genuine, this turd has finally been flushed. I bet there will be a huge sell off at the close. And so it begins.

  26. Mannwich says:

    Don’t doubt the power of the PPT. They will make a real effort today starting with the final 30-60 minutes of trading, as usual.

  27. cjcpa says:

    mannwich, I hope so. that’s my planned ‘getin’.

    back to the Money Honey.
    I had thought that others called her that. I was surprised to find that she was looking to call herself by that moniker.

  28. karen says:

    miss you, too, cnbc… odd day, imo. nothing more is breaking, but what’s broken isn’t getting fixed. have any new jobs been created lately?

  29. call me ahab says:

    leftback/mannwich-

    admire your commitment to short the market- I am all cash and have been for about 2 weeks- I just can’t abide (a la Big Lebowski) the USG/Fed daily machinations.

  30. Todd says:

    She should have cashed in on it about a decade ago. Probably could of had an IPO out of it.

    This would be a good day for the PPT team. I’m hedged now to a very neutral position. Just need S&P to hit 900 to shift.

    I think most earning surprises that are positive will be due to aggressive inventory management, or cost cuttings of Plant and equipment that don’t carry high maintenance costs.

    What ever 1st Qtr GDP numbers that come out will be rived downwards over the next few months.

  31. Mannwich says:

    I hear you, ahab. I certainly don’t feel great about it, but we shall see. I just get the feeling this rally is petering out and waiting for some event to take it dramatically lower. I’m sure we’ll get that event and then some in the coming weeks.

  32. globaleyes says:

    This is America: winners gather here……and uh, thank you, China (wink)

  33. CNBC Sucks says:

    Money Honey, huh? Lately, when I see a CNBC hottie, a different word has come to mind: courtesan.

    Word use example: CNBC courtesan Becky Quick is so hot, you don’t care if she can’t have cleavage.

    Or a word use example that is on-topic with this thread: CNBC courtesan Maria Bartoromo reported on S&P 500 composite operating earnings right before she ate a dozen doughnuts during her coffee break.

  34. Onlooker from Troy says:

    I’m skeptical too that this market will finally give up and roll over, reflecting the ugly reality of the fundamentals. But remember, GS and the other banks still need to sell their overpriced goods (new issues) into this market, so there will be many in high places that want this to stay propped up for a while longer. The question remains as to whether they can make it so.

  35. Corp_Lawyer says:

    About 20% of my assets went into FAZ today.

  36. Todd says:

    One company GM, is this where the bondholders finally take a hit?

  37. DL says:

    Todd @ 2:01

    I think it’s a question of what leverage that Obama has over the bondholders. I’m sure Obama would love to squeeze them hard, in order to help his UAW friends.

  38. leftback says:

    I just cannot see playing FAZ here until all the bank earnings and stress test gamesmanship is over. A little more comfortable being in SRS and QID, but I am playing this very tight. If we break down into an AT-style phase 5 sell-off I would be more than happy to pile into some FAZ.

    @DL: I like your bears in the volcano image. Like Mayan sacrifices?

  39. DL says:

    leftback @ 2:22

    You really think that SRS will go up at the same time that FAZ is declining?

  40. Myr says:

    Ahhh…the joys of “operating earnings”…otherwise known as “make believe earnings.” Throw in some fanciful marking of the assets on financial companies balance sheets along with some brilliant forecasting and you really have something worthwhile.

  41. AmenRa says:

    I’ve been away from the tv today. Has anyone in the MSM brought up the fact that Goldman Sachs had a four month 1Q and did not include Dec in their earnings release?

  42. Outlier says:

    @ DL, financials and real estate of course have some integral connections, but they are still two separate industries with separate dynamics. Most critically at this moment in the realm of government backing.

    also from a purely casual observation, the 2x leveraged stuff feels like a nice stiff tailwind, while the 3x leveraged stuff feels like a hurricane, way more difficult to navigate.

  43. batmando says:

    @ AmenRa
    “Has anyone in the MSM brought up the fact…”
    Why would they start bringing up any facts now and ruin a perfect record?

  44. Mannwich says:

    From what I’ve found, regardless of whether or not it makes sense, FAZ and SRS seem to move together.

  45. Outlier says:

    also on the subject of SRS, sell at 3:45 like the rest of the market or buy the inevitable dip and take the overnight risk?

  46. AmenRa says:

    @batmando
    Every now and then I hope the MSM has put away the knee pads. Also I read somewhere that the secondary offering that GS had has already been written down 7-12%.

  47. call me ahab says:

    the volume today on FAZ is 4x average

  48. Transor Z says:

    Picking on MSM for poor journalism is like being shocked that Outback’s Bloomin’ Onion (TM) has 5,000 calories.

    Edward R. Murrow is dead. He’s been replaced with a GMA segment on one Indiana mother’s long journey back from a disorder that caused her to fall in love with, and stalk, the Eiffel Tower. With Diane Sawyer narrating the story to us, an audience she clearly believes to be both hideously retarded and terminally ill.

  49. DL says:

    ahab @ 3:09

    Is that good or bad?

    (What I’d like to see is a plot of the ratio of trading volumes in FAS versus FAZ over time).

  50. DL says:

    PPT is slacking off today.

  51. Mannwich says:

    Don’t speak too soon! 10 minutes is an eternity……

  52. call me ahab says:

    @ DL-

    just an observation- FAS volume up 1.5- obviously a lot of interest in both. Average volume for FAZ is 39+million (3 month period) versus FAS 190+million (3 month period). Current volume is: FAZ 176+ million vs. FAS 325+ million. It appears there has been an increased interest in FAZ looking at the numbers.