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NOVEMBER ISSUE - 60 PAGES

Integrating Macro Research

& Technical Analytics

Gordon T Long

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READ ALL THE

"EXTEND & PRETEND" SERIES

 

 

Stage I Comes to an End!

 

A Matter of National Security

 

A Guide to the Road Ahead

 

Confirming the Flash Crash Omen

 

Its either RICO Act or Control Fraud

 

Shifting Risk to the Innocent

 

Uncle Sam, You Sly Devil!

 

Is the US Facing a Cash Crunch?

 

Gaming the US Tax Payer

 

Manufacturing a Minsky Melt-Up

 

Hitting the Maturity Wall

 

An Accounting Driven Market Recovery

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER 


 

 

 


 

READ ALL THE

"SULTANS OF SWAP"

 

ACT I

Sultans of Swap: Smoking Guns!

 

ACT II

Sultans of Swap: The Sting!

 

ACT III

Sultans of Swap: The Get Away!

 

 

ALSO

SULTANS OF SWAP: Explaining $605 Trillion in Derivatives!

 

SULTANS OF SWAP: Fearing the Gearing!

 

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

 

SULTANS OF SWAP: Gold Swaps Signal the Roadmap Ahead

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 


 

 

 

 

READ ALL THE

"EURO EXPERIMENT" SERIES

 

 

 

EURO EXPERIMENT: German Steel or Schmucks?!

 

 

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 

 

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Published November 2009

 

EXTEND & PRETEND

 

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READ ALL THE

"INNOVATION" SERIES

 

Innovate or Die

 

INNOVATION: America has a Structural Problem!

 

INNOVATION: What Made America Great is now Killing Her!

 

America - Innovate or Die!

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 


 

 

 

READ ALL THE

"PRESERVE & PROTECT" SERIES

 

 

 

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 

 

 

 

 

 

 

 

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COMMENTARY for all articles by Gordon T Long

 

CURRENCY WARS: Debase, Default, Deny!

 

In September 2008 the US came to a fork in the road. The Public Policy decision to not seize the banks, to not place them in bankruptcy court with the government acting as the Debtor-in-Possession (DIP), to not split them up by selling off the assets to successful and solvent entities, set the world on the path to global currency wars.

 

By lowering interest rates and effectively guaranteeing a weak dollar, the US ignited an almost riskless global US$ Carry Trade and triggered an uncontrolled Currency War with the mercantilist, export driven Asian economies. We are now debasing the US dollar with reckless spending and money printing with the policies of Quantitative Easing (QE) I and the expectations of QE II. Both are nothing more than effectively defaulting on our obligations to sound money policy and a “strong US$”. Meanwhile with a straight face we deny that this is our intention.  

 

Though prior to the 2008 financial crisis our largest banks had become casino like speculators with public money lacking in fiduciary responsibility, our elected officials bailed them out. Our leadership placed America and the world unknowingly (knowingly?) on a preordained destructive path because it was politically expedient and the easiest way out of a difficult predicament. By kicking the can down the road our political leadership, like the banks, avoided their fiduciary responsibility. Similar to a parent wanting to be liked and a friend to their children they avoided the difficult discipline that is required at certain critical moments in life. The discipline to make America swallow a needed pill. The discipline to ask Americans to accept a period of intense adjustment. A period that by now would be starting to show signs of success versus the abyss we now find ourselves staring into.  A future that is now massively worse and with potentially fatal pain still to come. READ MORE

   

 

CURRENCY WARS: Misguided Economic Policy

 

The critical issues in America stem from minimally a blatantly ineffective public policy, but overridingly a failed and destructive Economic Policy. These policy errors are directly responsible for the opening salvos of the Currency War clouds now looming overhead.

 

Don’t be fooled for a minute. The issue of Yuan devaluation is a political distraction from the real issue – a failure of US policy leadership. In my opinion the US Fiscal and Monetary policies are misguided. They are wrong! I wrote a 66 page thesis paper entitled “Extend & Pretend” in the fall of 2009 detailing why the proposed Keynesian policy direction was flawed and why it would fail. I additionally authored a full series of articles from January through August in a broadly published series entitled “Extend & Pretend” detailing the predicted failures as they unfolded. Don’t let anyone tell you that what has happened was not fully predictable!

 

Now after the charade of Extend & Pretend has run out of momentum and more money printing is again required through Quantitative Easing (we predicted QE II was inevitable in March), the responsible US politicos have cleverly ignited the markets with QE II money printing euphoria in the run-up to the mid-term elections. Craftily they are taking political camouflage behind an “undervalued Yuan” as the culprit for US problems. Remember, patriotism is the last bastion of scoundres  READ MORE


READER ROADMAP -  2010 TIPPING POINTS aid to positioning COMMENTARY

 

 

 

POSTS:  WEEKEND 11-06-10

Last Update: 11/08/2010 05:06 AM

SCHEDULE: 1st Pass: 5:30AM EST, 2nd Pass: 8:00 AM, 3rd Pass 10:30 AM. Last Pass 5:30 PM

ARTICLE SOURCE 1 2 3 4 5 6 7 8 9 10
                       
ECB Rejects Request for Greek Swap Files, Citing `Acute' Risks Bloomberg X                  
Surging bond yields fuel fresh Greece fears FT X                  
Spain GDP Stagnates as Austerity Bites, Bank of Spain Says Bloomberg X                  
Spain GDP Stagnates as Austerity Bites, Bank of Spain Says Bloomberg X                  
German Manufacturing Orders Unexpectedly Declined in September Bloomberg X                  
Irish Deepen `Last Chance' Budget Cuts as Trichet Backs Squeeze Bloomberg X                  
Japan Reenters the Foreign Exchange Market FRBSL X                  
USA                      
Consumer credit posts a gain in Sept., second in 20 months AP X                  
Here's What No One Told You About The Supposedly Great Jobs Report Albert X                  
Surprise! Consumer Credit Rises For The First Time In 8 Months BI X                  
                       

HSBC and RBS see bumpy ride ahead

FT   X                
The Next Major Disaster Developing for Bond Holders EW     X              
Bernanke Defends Bond Purchases, Predicts Stronger Growth Bloomberg     X              
Pending home sales drop 1.8% in September AP                 X  
                       
ARTICLE SOURCE 11 12 13 14 15 16 17 18 19 20
                       
Is It Really a Pension? It’s a Problem NYT Norris X                  
In U.S., 14% Rely on Food Stamps wsj   x                
Fannie Mae Posts $1.3 Billion Loss WSJ     x              
Fannie, Freddie Overhaul Could Cost $685 Billion WSJ     x              
Europe defies China’s Nobel threat FT             X      
QE2 worsens China’s currency dilemma FT             X      
China ushers in credit default swaps FT             X      
Managing the Federal Debt National Affairs                 X  
                       
                       
CENTRAL BANKING & MONETARY POLICY                      
Doubts grow over wisdom of Ben Bernanke 'super-put' Prichard                    
Volcker: Fed's $900 Billion Plan Won't Do Much To Boost Economy Huffington Post                    
Ron Paul vows renewed Fed audit push next year Reuters                    
`Hell Week' Ends With Central Banks Split on Recovery Policies Bloomberg                    
QE2 Is Likely to Be More Successful than QE1 Northern Trust                    
QE II is here, Its impact on the money supply Pollaro                    
Enter the era of dollar devaluation Saft                    
Bernanke leads us down the hole to wonderland! (more about QE2) FabiusM                    
Bernanke soft-pedals QE2 risks Fortune (Barr)                    
Volcker: Future Inflation Risk Limits Easing Effect Reuters                    
US Policy 'Clueless': German Finance Minister Reuters                    
Emerging powerhouses vow action after Fed's bond move Shanghai Daily                    
China Says Fed Must Explain Bond-Buying or Endanger Recovery Bloomberg                    
Federal Reserve Rains Money On Corporate America Huffington Post                    
QE2 likely won't help U.S. economy Advisor.ca                    
One of the Greatest Blunders in History GoldSeek                    
A Look Inside the Fed’s Balance Sheet WSJ                    
Flaw in Fed’s ideological repositioning on asset prices FT                    
Sit back and enjoy the ride that QE2 has set in motion FT                    
                       
GENERAL INTEREST                      
Consumers' right to file class actions is in danger LA Times                    
Oil nears 2010 high; Commodities surge on investment flows Reuters                    
HSBC raises alert on emerging markets FT                    
MARKET WARNINGS                      
Small investors catch Wall Street’s big wave MW                    
No irrational exuberance — yet MW                    
World bull market faces no risks `any time soon': Mobius Bloomberg                    
Why Bernanke Is Gambling Comstock                    

G20 MEETING

                     
Geithner's 4% Solution May Be `Unworkable' as APEC Gathers Bloomberg                    
China tees up G20 showdown with US FT                    
Emerging markets win more voting power in IMF FT                    
'Peer Pressure' Seen as Currency War Fix WSJ                    
                       

CURRENCY WARS

                     
'Firewall needed' to prevent cash surge China Daily                    
Xia Bin wrote in a newspaper under the Chinese central bank Economist                    
Brazilian Finance Minister Guido Mantega Reuters                    
President-elect Dilma Rousseff FT                    
                       
Q3 EARNINGS                      
Focus on Net Margins Zacks                    
Berkshire Third-Quarter Profit Declines 7.7% on Derivatives Bloomberg                    
MARKET & GOLD MANIPULATION                      
                       
VIDEO TO WATCH                      
                       

Complete Legend to the Right, Top Items below.
Articles with highlights, graphics and any pertinent analysis found below.

1

         

1-SOVEREIGN DEBT

2-EU BANKING CRISIS
3-BOND BUBBLE

4-STATE & LOCAL GOVERNMENT

5-CENTRAL & EASTERN EUROPE
6-BANKING CRISIS II
7-RISK REVERSAL

8-COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II
10-EXPIRATION FINANCIAL CRISIS PROGRAM
11-PENSION CRISIS

12-CHRONIC UNEMPLOYMENT

13-GOVERNMENT BACKSTOP INSUR.
14-CORPORATE BANKRUPTCY

TODAY'S TIPPING POINTS UPDATE

RED ALERT

AMBER ALERT

ACTIVITY

MONITOR

Click to Enlarge





11-06-10

 

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

 

 

IRAN

 

ISREAL

 

KOREA

 

1- SOVEREIGN DEBT & CREDIT CRISIS

 

SOVEREIGNS

 

 

GREECE

ECB Rejects Request for Greek Swap Files, Citing `Acute' Risks BL

 

Surging bond yields fuel fresh Greece fears  FT

SPAIN

Spain GDP Stagnates as Austerity Bites, Bank of Spain Says  BL

 

GERMANY

German Manufacturing Orders Unexpectedly Declined in September BL

 

FRANCE

 

UK

 

IRELAND

Irish Deepen `Last Chance' Budget Cuts as Trichet Backs Squeeze BL

JAPAN

Japan Reenters the Foreign Exchange Market FRBSL

 

USA

 

 

 

Consumer credit posts a gain in Sept., second in 20 months AP FED

Surprise! Consumer Credit Rises For The First Time In 8 Months   BI

Consumer credit surprisingly increased in September, up 1.1% annualized.

It was expected to fall.

 

Data shows the expansion had nothing to do with credit cards, but instead with auto loans and student loans.

 

Car sales showed substantial growth in October, and with students heading back to start college in September, that may account for part of the uptick.

Revolving credit (credit cards), however, fell dramatically, down 12.1%.

Check out this chart from @credittrader, showing the decline in revolving credit:

 


 

Here's What No One Told You About The Supposedly Great Jobs Report  Alpert

 

With a really fantastic headline number coming from the Establishment Survey, we thought we’d take a closer look at the other side of the coin.  The Household Survey showed the following today: 

 

     •    a decline of 330,000 in the number of people employed;
    •    a decline of 254,000 in the labor force;
    •    a decline in the employment-population ratio to 58.3% from 58.5% in September;
    •    an increase of 462,000 in those not in the labor force; and
    •    an increase of 76,000 in the number of people unemployed.

 

The drop in the number of employed is concerning - and brings into question the disparity between the labor force and unemployment statistics in the Household Survey, and job creation indicated by the establishment surveys.  These were not small differences.

 

The take-away is that final demand in the U.S. can only be generated through an increase in the number of people with jobs and/or the wages earned by those employed. A material decline in the number of people employed (especially with only meager changes in hour’s worked and hourly wages) is not consistent with an improvement in final demand.
 
Furthermore, one questions why – with the Establishment Survey showing such a robust number – people are exiting the labor force, rather than entering it in response to employment opportunities?
 
The disparity between what the Household Survey and the Establishment Survey are telling us is of some concern.  So we took a look at the ol’ net birth/death algorithm for clues (it adjusts the Establishment Survey data).  Note below that the birth/death adjustment for the aggregate of professional and business services, and education and health services in October was +81,000 - over half of the establishment survey's gains (and nearly 50,000 jobs higher than the average of +32,500 for August and September).  We know that the NBDA has not had a very good track record during this recessionary and post-recessionary period.  


Birth-Death October 2010 

 

Structurally, it is also useful to note that the increase in the number of unemployed, and number of people exiting the workforce, came nearly entirely from the statistical cadre over 25 with a college degree of higher – (labor force dropping by 332,000, unemployed rising by 97,000).  Higher paying jobs continue to shrink, lower paying service sector employers hiring cheap labor.  Sticky wages starting to get unstuck as unemployed become more hopeless?  This would be a deflationary signal.  Keep an eye on that hourly wage number going forward.

 

 

2- EU BANKING CRISIS

   

HSBC and RBS see bumpy ride ahead  FT

Banks warn on the outlook for the economy

 

3- BOND BUBBLE

 

The Next Major Disaster Developing for Bond Holders EW

 

Bernanke Defends Bond Purchases, Predicts Stronger Growth BL


4- STATE & LOCAL GOVERNMENT

 


5- CENTRAL & EASTERN EUROPE

 


6-BANKING CRISIS II



7- RISK REVERSAL

 

 

8- COMMERCIAL REAL ESTATE

 

 

9-RESIDENTIAL REAL ESTATE - PHASE II

 

Pending home sales drop 1.8% in September AP

 

10- EXPIRATION FINANCIAL CRISIS PROGRAM

 

 

11- PENSION & ENTITLEMENTS CRISIS


Is It Really a Pension? It’s a Problem NYT (Norris)


12- CHRONIC UNEMPLOYMENT


In U.S., 14% Rely on Food Stamps WSJ 

13- GOVERNMENT BACKSTOP INSURANCE

 

Fannie Mae Posts $1.3 Billion Loss  WSJ

 

Fannie, Freddie Overhaul Could Cost $685 Billion  WSJ

 

14- CORPORATE BANKRUPTCIES

 

 

17- CHINA BUBBLE


Europe defies China’s Nobel threat  FT

QE2 worsens China’s currency dilemma  FT

China ushers in credit default swaps  FT

19- PUBLIC POLICY MISCUES

 

Managing the Federal Debt National Affairs



 


OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

 

24-RETAIL SALES

 

 

26-GLOBAL OUTPUT GAP

 

 

31-FOOD PRICE PRESSURES

 

 

 

32-US STOCK MARKET VALUATIONS

 

 




BP - British Petroleum

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

------------

 






   

CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES

------------

 

Doubts grow over wisdom of Ben Bernanke 'super-put' Pritchard

The early verdict is in on the US Federal Reserve's $600bn of fresh money through quantitative easing. Yields on 30-year Treasury bonds jumped 20 basis points to 4.07pc.

 

It is the clearest warning shot to date that global investors will not tolerate Ben Bernanke's openly-declared policy of generating inflation for much longer.  Soaring bourses may have stolen the headlines, but equities are rising for an unhealthy reason: because they are a safer asset class than bonds at the start of an inflationary credit cycle.

 

Countries cannot easily shield themselves from the inflationary effect of QE2 by raising interest rates since this leads to further "carry trade" inflows in search of yield. They are being forced to eye capital controls, with ominous implications for the interwoven global system.

 

In London and Frankfurt the verdict was just as harsh.

 

"In our view, this is one of the greatest policy mistakes in the Fed's history" - Toby Nangle, Baring Asset Management.

 

FEEDBACK:

"Washington has angered the world's rising powers and prompted a reaction with far-reaching strategic consequences." Ambrose Evans Prichard Telegraph UK

"a string of Asian states share China's "deep bitterness" over dollar debasement, and are examining ways of teaming up to insulate themselves from the tsunami of US liquidity" Li Deshui, Beijing's Economic Commission

"its central bank is already in talks with neighbors to devise a joint protection policy."  Thailand Government

 

"the US move had created excessive dollar liquidity which we are absorbing forcing his country to restrict inflows" - Brazil's central bank chief Henrique Mereilles

 

Mexico's finance minister warned of "more bubbles."

 

"The Fed is gambling that the so-called 'portfolio balance channel effect' – pushing money out of government bonds and into other assets – will lift risk asset prices. The gamble is that this boosts profits and wages, rather than simply prices. We remain unconvinced. How will a liquidity solution correct a solvency problem?" Toby Nangle, Baring Asset Management

 

"A policy error", the wording of the Fed statement is "potentially dangerous" because it leaves the door open to a further flood of Treasury purchases if unemployment stays high. "It is a bottomless pit"  - Ulrich Leuchtmann, Commerzbank.

 

"If long bond investors continue to throw their collective toys out of the cot, it risks upending the Fed's policy," - Michael Derk from FXPro.

 

"foreign funds may take advantage of QE2 to dump their holdings on the Fed, rotating the money emerging markets rather than US assets."-  Mark Ostwald from Monument Securities

 

Bond funds are already restive. Pimco's Bill Gross says the great bull market in bonds is over, denigrating Fed policy as the greatest "ponzi scheme" in history.

 

Warren Buffett has chimed in, warning that anybody buying bonds at this stage is "making a big mistake",

 


Volcker: Fed's $900 Billion Plan Won't Do Much To Boost Economy Huffington Post

"The thought that you can create a prosperous economy by inflating is an illusion, in my judgment," he told reporters after his speech. "And we should never forget that. I thought we'd learned that lesson and I hope we continue to learn that lesson."


Ron Paul vows renewed Fed audit push next year Reuters
Paul is currently the top Republican on the House of Representatives subcommittee that oversees domestic monetary policy...That could create a giant headache for the Fed

`Hell Week' Ends With Central Banks Split on Recovery Policies BL

QE2 Is Likely to Be More Successful than QE1 Northern Trust

QE II is here, Its impact on the money supply Pollaro

Enter the era of dollar devaluation Saft
For the U.S., which has long espoused a strong dollar but in reality had a policy of benign neglect, this is the equivalent of pushing the big red eject button in the jet cockpit: something big is going to happen and we will have to see how it will work out.

Bernanke leads us down the hole to wonderland! (more about QE2) FabiusM

Bernanke soft-pedals QE2 risks Fortune (Barr)

Mohammed El-Erian, a top executive at giant bond investor Pimco, contends in a piece published in the Financial Times that quantitative easing will fail to restart domestic growth because it fails to address the real problems that are holding down U.S. employment and output.

Pimco has previously argued that the government needs to focus on making structural changes such as boosting investment in travel infrastructure, such as air and rail facilities, and focusing on building a sustainable energy industry. This, rather than expanding the monetary base, holds the key over time to creating good jobs.

"Liquidity injections and financial engineering are insufficient to deal with the challenges that the U.S. faces," El-Erian writes. "Without meaningful structural reforms, part of the Fed's liquidity injection will leak right out of the U.S. and result in yet another surge of capital flows to other countries."

 

There is the longer-term risk to the U.S. economy, which has gained so much through the years through the issuance of the world's reserve currency and the operation of its deepest, most liquid financial makets. El-Erian contends that these advantages will inevitably erode over the years that Bernanke continues his expansive monetary efforts, perhaps culminating in the long prophesied crisis.


Volcker: Future Inflation Risk Limits Easing Effect Reuters

US Policy 'Clueless': German Finance Minister Reuters

Emerging powerhouses vow action after Fed's bond move Shanghai Daily

China Says Fed Must Explain Bond-Buying or Endanger Recovery BL

Federal Reserve Rains Money On Corporate America HP

QE2 likely won't help U.S. economy Advisor.ca

One of the Greatest Blunders in History GoldS
I think history will come to view yesterday as the beginning of the end for the dollar as the worlds reserve currency and unless the Federal Reserve comes to their senses soon the dollar is doomed to follow every other fiat currency in history into an eventual hyperinflation and total devaluation.

A Look Inside the Fed’s Balance Sheet WSJ

Flaw in Fed’s ideological repositioning on asset prices  FT

Sit back and enjoy the ride that QE2 has set in motion  FT

 

 GENERAL INTEREST

Consumers' right to file class actions is in danger LAT

 

Oil nears 2010 high; Commodities surge on investment flows Reuters

 

HSBC raises alert on emerging markets  FT

FLASH CRASH - HFT - DARK POOLS

 

MARKET WARNINGS

Small investors catch Wall Street’s big wave MW
Bullish sentiment hit a two-year peak at the end of October

 

No irrational exuberance — yet MW

 

World bull market faces no risks `any time soon': Mobius BL

 
Why Bernanke Is Gambling Comstock
It is also likely, therefore that the strong market rally is based on false assumptions, as were the runs to the tops of early 2000 and late 2007.

 

G20 MEETING

Geithner's 4% Solution May Be `Unworkable' as APEC Gathers BL

 

China tees up G20 showdown with US  FT

Plan to deal with imbalances rejected

 

Emerging markets win more voting power in IMF  FT

 

'Peer Pressure' Seen as Currency War Fix  WSJ

South Korean President Lee said he was counting on pressure from the world's top economies, not enforceable rules, to police any currency deal made among leaders at the G-20 summit.

 

South Korea had hoped to make development issues the focus of the G-20 summit but those plans were overtaken by currency battles—and successful U.S. efforts to focus the meeting on Chinese foreign-exchange practices. Mr. Lee said he was optimistic for the summit but some G-20 negotiators outside the U.S. have been frustrated by the turn of events.

 

FINANCE MINISTERS MEETING OUTCOME

The most attention has focused on a joint Korean-U.S. plan to limit the trade surpluses and deficits that underlie and reflect currency movements. At a G-20 finance ministers meeting late last month, the group agreed to adopt "indicative guidelines" of what constitutes an over-the-top deficit or surplus.

 

The International Monetary Fund would play umpire and name countries that didn't meet the standard. The U.S. is pushing the group to limit surpluses at 4% of gross domestic product, a standard Washington believes would prompt China to let its currency rise further.

 

 

Any deal, President Lee said, wouldn't be enforceable in the way, say, trade decisions are enforced by the World Trade Organization, which can authorize trade sanctions against losing parties.

 

THE SQUEEZE

Currency issues have come to dominate the G-20, as a number of countries have felt squeezed between China, which is widely believed to keep its currency purposefully undervalued to benefit its export companies, and the U.S., whose near zero-rate monetary policy is prompting investors to shift money to emerging markets, putting upward pressure on currencies there.

 

 

 

CURRENCY WARS

'Firewall needed' to prevent cash surge China Daily
Warning over capital influx as US starts 'unbridled money printing'

 

Xia Bin wrote in a newspaper under the Chinese central bank  Economist
“As long as the world exercises no restraint in issuing global currencies such as the dollar -- and this is not easy -- then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament”

 

Brazilian Finance Minister Guido Mantega  Reuters
“Everybody wants the U.S. economy to recover, but it does no good at all to just throw dollars from a helicopter”

 

President-elect Dilma Rousseff  FT
 “The last time there was a series of competitive devaluations...it ended in world war two”

 

Q3 EARNINGS

Focus on Net Margins  Zacks Research via Pragmatic Capitalist

 

  • - Focus now on third quarter earnings: 16.3% growth in total net income, 3.79% year-over-year revenue growth expected.  For the fourth quarter, 24.1% earnings, and 2.18% revenue growth expected.
  • - Just 22 reports in, but off to a good start (for what it’s worth). Surprise ratio 6.00 with a 8.96% median surprise. 81.8% of all firms beat expectations. Total net income grows 26.2%.
  • - Sales Surprise ratio at 1.10, median surprise 0.01%, 50.0% of all firms do better than expected on top line. Total revenue growth 11.1%.
  • - New Tables on Net Margins added. S&P 500 net margin expected to rise to 8.63% from 7.75% a year ago, but down from 9.05% in the second quarter.
  • - Total earnings for the S&P 500 expected to jump 39.0% in 2010, 15.6% further in 2011.  Revenues expected to rise 4.62% in 2010, 5.93% in 2011.
  • - Autos, Finance, Basic Materials and Energy expected to be earnings growth leaders in 2010. Construction expected to move from the red to the black. No sector expected to see earnings decline in 2010.
  • - Huge net margin expansion expected to continue in 2010 and 2011. Total net margins grow from 5.85% in 2008 to 6.42% in 2009, 8.61% expected for 2010, 9.31% for 2011.  Ex-Financials, net margins 6.63% in 2008, 7.58% for 2009, 8.72% expected for 2010, 10.51% for 2011.
  • - Revisions ratio for full S&P 500 at 1.04 for 2010, at 0.89 for 2011, an improvement from last week.   Ratio of firms with rising to falling mean estimates at 1.11 for 2010, 0.79 for 2011.  Very small sample size, especially for some of the sectors, interpret revisions ratios with care
  • - S&P 500 firms earned a total of $546.5 billion in 2009, expected to earn $759.8 billion in 2010, $878.4 billion in 2011.
  • - S&P 500 earned $57.64 in 2009, $79.80 in 2010 and $92.78 in 2011 expected bottom up.  Puts P/E’s at 19.8x for 2009, 14.3x for 2010, and 12.3x for 2011.
  • - Top-Down estimates:  $79.93 for 2010, $92.01 for 2011.
  •  

    Berkshire Third-Quarter Profit Declines 7.7% on Derivatives BL

     

    MARKET & GOLD MANIPULATION

     

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    QUOTE OF THE WEEK

    "It could unfold very, very quickly. Because deflation is a swing of poverty feedback, it can take awhile to build up. If you try to explain to people what's coming, because it doesn't happen instantly, they tend to go back to sleep. The thing they need to understand, however, is that when it does hit a tipping point, a kind of critical mass, then it can unfold exceptionally quickly. Then it's very much like having the rug pulled out from under your feet. So I tell people all the time, prepare now because it's better to be two years too early than five minutes too late. You can't play with this sort of thing. In September, 2008, we came within a few hours of the banking system seizing up, and that could easily happen again. People wouldn't get a lot of notice. For anyone who's not in the meeting room-it will be too late by the time they find out. My worry is that if there are an enormous number of people who just had the rug pulled out from under their feet, they're going to run around like headless chickens, and the human over-reaction to events will be really responsible for a large percentage of the impact. “

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    Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.ont>

     

    © Copyright 2010 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

     

             

    TODAY'S NEWS

    WEEKEND

    11-06-10

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    ARCHIVAL

     

     

    READING THE RIGHT BOOKS?  NO TIME?

     

    WE HAVE IT ANALYZED & INCLUDED IN OUR LATEST RESEARCH PAPERS!

     

     

    ACCEPTING PRE-ORDERS

     

     

     




     

             

    TIPPING POINTS

    1-SOVEREIGN DEBT & CREDIT CRISIS

    2-EU BANKING CRISIS
    3-BOND BUBBLE

    4-STATE & LOCAL GOVERNMENT

    5-CENTRAL & EASTERN EUROPE
    6-BANKING CRISIS II
    7-RISK REVERSAL

    8-COMMERCIAL REAL ESTATE

    9-RESIDENTIAL REAL ESTATE - PHASE II
    10-EXPIRATION FINANCIAL CRISIS PROGRAM
    11-PENSION CRISIS

    12-CHRONIC UNEMPLOYMENT

    13-GOVERNMENT BACKSTOP INSUR.
    14-CORPORATE BANKRUPTCY
     

    15-CREDIT CONTRACTION II

    16-US FISCAL IMBALANCES
    17-CHINA BUBBLE
    18-INTEREST PAYMENTS
    19-US PUBLIC POLICY MISCUES
    20-JAPAN DEBT DEFLATION SPIRAL
    21-US RESERVE CURRENCY.
    22-SHRINKING REVENUE GROWTH RATE
    23-FINANCE & INSURANCE WRITE-DOWNS
    24-RETAIL SALES
    25-US DOLLAR WEAKNESS
    26-GLOBAL OUTPUT GAP
    27-CONFIDENCE - SOCIAL UNREST
    28-ENTITLEMENT CRISIS
    29-IRAN NUCLEAR THREAT
    30-OIL PRICE PRESSURES
    31-FOOD PRICE PRESSURES
    32-US STOCK MARKET VALUATIONS
    33-PANDEMIC
    34-S$ RESERVE CURRENCY
    35-TERRORIST EVENT
    36-NATURAL DISASTER

     


     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Book Review- Five Thumbs Up for Steve Greenhut's Plunder!  Mish

     

     

     

     

       

     

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    Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, we recommend that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

    Copyright and Disclaimer

    © Copyright 2010, Gordon T Long. The information herein was obtained from sources which the Gordon T Long. believes reliable, but we do not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that the Gordon T Long. or its principals may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Gordon T Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from us.