Lions, Tigers & Bears, Oh My!
Once upon a time, a greedy little substance abusing addict, who because she thought the law entitled her to...
and other greedy little money grabbers advised her to, tried to take half of something that was never her's to start with.
The Nattering One advised the little "Smeagol":
"In life, there's what you know, what you think you know, and what you don't know. And the latter is what can really hurt you the most."
In the end, "the Gollum" paid no heed and something she "did not know", prevented her from stealing "the precious" she so coveted...
albeit, she got her just dessert, nothing, except being saddled with a whopping attorneys bill... ah yes, a plate best served cold... but I digress...
With recession looming... corporate growth rates & estimates are sequentially declining (5.1% for Q3), unemployments rising and cap ex is nowhere to be found...
a reality check reveals the cancer of a non durable economic state and toxic lending practices has metastasized ...
the bloated carcass of conspicuous consumerism is slowly being pulled under by the ball and chain of rampant speculation, oversupply and stagflation...
the toxic loans have metastisized into an asset backed debt market cancer which is just starting to take its solvency toll on a greed driven financial system...
with the debt markets crashed and frozen, suspicion of every corporate connivance such as...
mark to model valuations, off balance sheet SIV's "structured investment vehicle," secretive money market "conduits" and commercial paper financing vehicles abounds.
We've mentioned that four majors report next week: Lehman Bros 18th, Morgan Stanley 19th and Goldman Sachs and Bear Stearns 20th.
The financial sector is already down 25% YTD and Q3 reporting could wind up being the worst in the last 10 years for banks & financial services.
But, not according to earnings forecasts from the banks, who like an addict, realtors, property sellers, and most investors, are whistling past the graveyard in total denial.
Jon Markman elucidates this with alacrity in... What the Big Banks Aren't Telling You.
"...most of the downward revisions of estimates have come in the industrial, consumer staples and retail sectors of the economy.
Yet the financial industry, which has undoubtedly experienced the worst business shortfall, has barely received any material earnings-estimate cuts yet.
You could see that as great news if you're a glass-is-half-full kind of person. But it could also be interpreted as absolutely nuts.
At the moment, I am inclined toward the latter and think it's emblematic of an entire industry that is whistling past the graveyard.
Bear Stearns has not yet pre-announced an earnings shortfall, we can only guess that (the CEO) and his team are administering "hope and faith" to the company's balance-sheet wounds.
Despite their already pummeled status, it's not unreasonable to expect another leg down for financials this fall...
just like the home builders have had repeated punches in the gut after it already seemed like the worst was over.
Do you feel lucky? Well, do ya? In all this confusion, you have to ask yourself these questions... What are the implications to an economy that...
LIONS... is built on housing (80% of all jobs created since 2001) with new housing starts off 30% and real estate prices about to plunge further?
TIGERS... is not built on durable economic activity and driven by wage gains, but on...
consumer spending based upon speculative capital gains and a mortgage equity withdrawal spigot that is getting shut off?
AND BEARS... and a stock market that is built on a money shuffling financial industry with over 30% of all S&P 500 earnings based on financial companies?
OH MY!! Never assume or take anything for granted, because its what you don't know, that can hurt you the most.
and other greedy little money grabbers advised her to, tried to take half of something that was never her's to start with.
The Nattering One advised the little "Smeagol":
"In life, there's what you know, what you think you know, and what you don't know. And the latter is what can really hurt you the most."
In the end, "the Gollum" paid no heed and something she "did not know", prevented her from stealing "the precious" she so coveted...
albeit, she got her just dessert, nothing, except being saddled with a whopping attorneys bill... ah yes, a plate best served cold... but I digress...
With recession looming... corporate growth rates & estimates are sequentially declining (5.1% for Q3), unemployments rising and cap ex is nowhere to be found...
a reality check reveals the cancer of a non durable economic state and toxic lending practices has metastasized ...
the bloated carcass of conspicuous consumerism is slowly being pulled under by the ball and chain of rampant speculation, oversupply and stagflation...
the toxic loans have metastisized into an asset backed debt market cancer which is just starting to take its solvency toll on a greed driven financial system...
with the debt markets crashed and frozen, suspicion of every corporate connivance such as...
mark to model valuations, off balance sheet SIV's "structured investment vehicle," secretive money market "conduits" and commercial paper financing vehicles abounds.
We've mentioned that four majors report next week: Lehman Bros 18th, Morgan Stanley 19th and Goldman Sachs and Bear Stearns 20th.
The financial sector is already down 25% YTD and Q3 reporting could wind up being the worst in the last 10 years for banks & financial services.
But, not according to earnings forecasts from the banks, who like an addict, realtors, property sellers, and most investors, are whistling past the graveyard in total denial.
Jon Markman elucidates this with alacrity in... What the Big Banks Aren't Telling You.
"...most of the downward revisions of estimates have come in the industrial, consumer staples and retail sectors of the economy.
Yet the financial industry, which has undoubtedly experienced the worst business shortfall, has barely received any material earnings-estimate cuts yet.
You could see that as great news if you're a glass-is-half-full kind of person. But it could also be interpreted as absolutely nuts.
At the moment, I am inclined toward the latter and think it's emblematic of an entire industry that is whistling past the graveyard.
Bear Stearns has not yet pre-announced an earnings shortfall, we can only guess that (the CEO) and his team are administering "hope and faith" to the company's balance-sheet wounds.
Despite their already pummeled status, it's not unreasonable to expect another leg down for financials this fall...
just like the home builders have had repeated punches in the gut after it already seemed like the worst was over.
Do you feel lucky? Well, do ya? In all this confusion, you have to ask yourself these questions... What are the implications to an economy that...
LIONS... is built on housing (80% of all jobs created since 2001) with new housing starts off 30% and real estate prices about to plunge further?
TIGERS... is not built on durable economic activity and driven by wage gains, but on...
consumer spending based upon speculative capital gains and a mortgage equity withdrawal spigot that is getting shut off?
AND BEARS... and a stock market that is built on a money shuffling financial industry with over 30% of all S&P 500 earnings based on financial companies?
OH MY!! Never assume or take anything for granted, because its what you don't know, that can hurt you the most.
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