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Pyrthian
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DEC 19, 11:59 AM
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um, people on fixed incomes are NEVER doing well. well, unless they managed to get themselves a NICE fixed income. but, the reality of prices going up (not inflation  ) is always present.
and, while I dont see them as rose colored - you do see things thru different glasses than he does. not sure what color his are either....
to subjective.
thats what money is for. if you dont make it - someone else will
oops, why am i backwards?
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aceman
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DEC 19, 12:13 PM
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| quote | Originally posted by Pyrthian:
um, people on fixed incomes are NEVER doing well. well, unless they managed to get themselves a NICE fixed income. but, the reality of prices going up (not inflation ) is always present.
and, while I dont see them as rose colored - you do see things thru different glasses than he does. not sure what color his are either....
to subjective.
thats what money is for. if you dont make it - someone else will
oops, why am i backwards? |
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Maybe because they go for the last two "arguments" immediately now because everyone yells BS on the first two.
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84Bill
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DEC 19, 05:54 PM
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Wow.. dont hold back, tell us how you really feel.
December 19 2007: 10:21 AM EST
Analysts in fantasyland
Despite years of reform, the latest numbers show that Wall Street prognosticators are every bit as deluded and inaccurate as they ever were.
By Geoff Colvin, senior editor-at-large
NEW YORK (Fortune) -- Maybe Wall Street analysts are more honest and less compromised than they were pre-SarbOx, but recent events show that they're still awful at their most important job: predicting bad news. They haven't lost their habit of falling in love with the companies they cover and refusing to face unpleasant realities until everyone else has already done so. Now, eight years after they were inflating the bubble, we again have to question whether analysts do retail investors any good.
The latest evidence: Analysts have only just discovered that corporate profits in the fourth quarter aren't going to be nearly as strong as they had supposed a month or two ago. The consensus view going into the quarter was that S&P 500 profits would go up 12 percent to 15 percent, a large jump coming on top of the 20 percent rise in last year's fourth quarter. In light of the credit crunch, the housing collapse, and the towering price of oil, that forecast seemed highly - one might say insanely - optimistic. This it proved to be, but only after the quarter began did the consensus view finally lurch into the real world. Their growth forecast is now about 1.5 percent and still falling.
It has been obvious for many months that profit growth would have to slow way down simply because it couldn't continue at recent rates. Profits have been rising sharply the past few years, which makes sense after the hole they fell into in 2001 and 2002. But by early this year they had grown to 12 percent of GDP, way above their historical average of 9 percent. Analysts knew all this, and in case they didn't, various commentators (including Fortune's Shawn Tully) were insistently pointing it out. But the analysts, ever hopeful, chose to believe that U.S. companies would perform magic.
They still believe it. To see the stubbornness of Wall Street's Pollyannas, look at new data from Merrill Lynch. The firm's chief North American economist, David Rosenberg, regularly and realistically forecasts S&P 500 profit growth. He cut his 2008 forecast sharply (to zero growth) in June, even before the credit crunch. He has since cut it twice more, and it's now -3 percent.
But Merrill's analysts hold a far different view. Add up their 2008 profit growth forecasts for individual S&P companies, and you get 14 percent. In analyst-land, 2008 is going to be another knockout year, with profits yet again growing several times faster than the economy. What's more, Merrill's analysts have actually been increasing their 2008 growth forecasts in recent months. In their bizarre world the logic goes like this: Since we must now admit that 2007 profits will be much lower than we expected, and since we're still certain that 2008 will nonetheless be totally fabulous, then the percentage increases will be even bigger than we thought.
How these nonsensical situations arise is no mystery. Each analyst can accept that the future may be tough overall while still believing that the companies he or she covers are special and will beat the trend. The analysts individually think they're being reasonable, but in the aggregate, they're crazy.
It's similar to what happened in subprime mortgages in recent years or stocks in the late 1990s: Many players realized the situation wasn't sustainable but figured they were especially perceptive and would get out ahead of the pack.
In the days of the market bubble, when many analysts failed to cut their earnings estimates until the collapse was underway, we blamed their motivation. They were afraid their firm's investment-banking arm would lose business. That problem has at least been reduced by SarbOx and by fear of public scrutiny. But if analysts are still predicting fantasy earnings, who cares why? Individual investors are no better off than they were.
Not every analyst gets it wrong. It's always possible in retrospect to find some who hit bull's-eyes. The trouble is, you never know who they'll be. Of course, you may be tempted to believe that while analysts in general are poor, the ones you're relying on are special and will ... no, wait. We know how that turns out. To top of page
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84Bill
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DEC 19, 06:10 PM
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Deflating the value of the U.S. Dollar even more....
Fed to lend $20 billion to banks
Central bank, in a bid to ease credit crunch, gets strong demand for short-term funding. Wall Street shrugs.
Fed Chairman Ben Bernanke and fellow central bankers said the Fed was lending $20 billion to banks.
NEW YORK (CNNMoney.com) -- The Federal Reserve announced Wednesday that it was lending $20 billion to banks in the first of four special auctions designed to help alleviate the credit crunch on Wall Street.
The Fed said that it received requests for $61.6 billion in loans from 93 bidders - illustrating strong demand by banks that need short-term funds. The winning bidders will receive their loans, which will mature in 28 days, on Thursday.
Stocks seesawed throughout the day Wednesday and finished mixed. The Dow and S&P 500 fell while the Nasdaq rose slightly.
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aceman
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DEC 19, 06:17 PM
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Why don't you just save all your energy Bill and post when we have negative growth in the GDP in a quarter. Then post when it has a negative growth for the 2nd consecutive quarter. Then we'll all know that we're on the brink of a recession and then the next post would be that we're in a recession and a bad economy.
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84Bill
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DEC 20, 12:31 PM
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Wall Street firm swings to its first quarterly loss on record, takes $1.9 billion writedown; pulls bonuses for execs.
NEW YORK (CNNMoney.com) -- Bear Stearns swung to its first quarterly loss ever Thursday and said it was taking a $1.9 billion writedown due to bad bets made on risky home loans, becoming the latest Wall Street firm to deliver disappointing quarterly results.
The company posted a net loss of $854 million, or $6.90 a share, in the fourth quarter - a first in the firm's 84-year history.
In the same period last year, the company reported a profit of $563 million, or $4 a share.
Bear's top line took a big hit. The company reported negative revenue of $379 million for the quarter, versus $2.4 billion a year ago[This message has been edited by 84Bill (edited 12-20-2007).]
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Phranc
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DEC 20, 01:04 PM
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Commerce Department reports:
showing that the pace of GDP growth for the quarter was unrevised compared to the preliminary estimate.
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The report showed that GDP increased at an annual rate of 4.9 percent in the third quarter compared to the 3.8 percent growth seen in the second quarter.
The GDP growth in the third quarter marked the fastest pace of growth since the third quarter of 2003, when GDP surged up 7.5 percent.
The report showed that the pace of consumer spending growth was revised up modestly to 2.8 percent from the preliminary reading of 2.7 percent growth. This represents a significant acceleration from 1.4 percent in the second quarter.
The Commerce Department also said that its reading on core consumer prices, which exclude food and energy prices, was upwardly revised to show 2.0 percent growth compared to the previously reported 1.8 percent growth.
Including food and energy prices, consumer prices rose 1.8 percent in the third quarter, which represent an upward revision from the preliminary estimate of 1.7 percent growth.
Growth is still chugging despite macroeconomic mess, dollar devaluation, and inflationary issues. These are weird times.
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84Bill
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DEC 20, 05:06 PM
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Leading indicators were supposed be be released today... This is all I could find
CONOMIC REPORT
Leading indicators point to weak winter growth
U.S. leading indicators off 0.4% in November versus October's 0.5%
By Ruth Mantell, MarketWatch
Last update: 10:30 a.m. EST Dec. 20, 2007
WASHINGTON (MarketWatch) -- Weak economic growth may be on tap for this winter, the Conference Board said Thursday, reporting that a gauge of future economic growth fell 0.4% in November.
Analysts had expected a decline of 0.3% for the index of leading economic indicators. In October, the index fell 0.5%.
Only 3 of the 10 components making up the leading indicators rose in November, with the largest positive contribution coming from vendor performance. Stock prices were the largest negative contributor, a reflection of recent turbulence that has roiled the markets.
From May to November, the leading index declined 1.2% -- the largest six-month decrease in six years, according to the report. The leading index has also declined to its lowest level since mid-2005.
The coincident indicator index, which measures where the economy is at present, has shown some signs of yielding to "unrelenting pressure" from factors such as the housing slump and energy prices, according to Ken Goldstein, labor economist at the Conference Board.
There could be some "consistent declines" after the New Year, Goldstein said.
Elsewhere Thursday, the government said the U.S. economy grew at a 4.9% annual pace in the third quarter, the fastest growth in four years. However, looking forward, economists expect slower growth in consumer spending, business investment, exports and inventory building, and see little or no improvement in the housing market. See full story.
Also Thursday, the Labor Department said first-time jobless claims rose in the most recent weekly data. Economists said the news shows that the U.S. labor market is coming under pressure.
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84Bill
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DEC 20, 05:13 PM
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Initial jobless claims rise 12,000 to 346,000
Number receiving unemployment benefits rises to highest in nearly 2 years
By Ruth Mantell, MarketWatch
Last update: 11:40 a.m. EST Dec. 20, 2007
WASHINGTON (MarketWatch) -- Seasonally adjusted first-time jobless claims rose in the most recent weekly data, the government reported Thursday, and economists said the news shows that there could be weak job growth ahead.
Initial claims rose 12,000 to 346,000 for the week ended Dec. 15, the Labor Department reported. Economists watch claims closely because an increase could be a leading indicator of a slowdown.
David Greenlaw, an economist for Morgan Stanley, said the latest data indicate that labor market conditions are "beginning to show noticeable deterioration."
Initial claims were at 319,000 during the same period a year ago. Last week's result was revised up 1,000 to 334,000.
This week's figures get special scrutiny because they correspond to the week the government canvasses business establishments and households for the December employment report, due out Jan. 4.
Greenlaw's preliminary estimate for December payrolls is an increase of 25,000 to 50,000. In November, the U.S. labor market was slightly stronger than expected, as the economy added 94,000 nonfarm payroll jobs. See full story.
Ian Shepherdson, chief U.S. economist with High Frequency Economics Ltd., said in a research note that the growth in claims is large enough to suggest a "meaningful slowdown in payroll growth" in December. He expects growth of 50,000 or less.
"If claims keep rising, payrolls closer to zero will soon become a real possibility," Shepherdson wrote. "Companies' behavior is fundamentally changing; a hiring freeze is no longer enough."
The four-week moving average for initial jobless claims rose 4,250 to 343,000, according to the Labor Department. That level is the highest since Oct. 22, 2005.
Continuing jobless claims also gained 12,000, reaching 2.65 million for the week ended Dec. 8. The four-week moving average for continuing jobless claims rose 23,000 to 2.63 million -- hitting the highest level in almost two years.
Analysts say the four-week average is a better indicator of the labor market because it smoothes out one-time events such as holidays or strikes.
The insured unemployment rate, representing the portion of all workers covered by unemployment insurance who are collecting benefits, remained at 2.0%.
Initial claims represent job destruction, while the level of continuing claims show how hard or easy it is for displaced workers to find new jobs.
Initial claims ranging from about 300,000 to 325,000 are consistent with healthy job growth, economists say. Readings consistently higher than 350,000 would signal significant weakening in the labor market. End of Story
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fierobear
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DEC 21, 10:58 AM
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Consumer spending surges in November
WASHINGTON - Consumers put aside worries about slumping home sales and soaring gasoline prices and headed to the malls in November, pushing spending up by the largest amount in 3 1/2 years.
The Commerce Department reported Friday that consumer spending surged by 1.1 percent last month, nearly triple the October gain. The gain reflected various promotional efforts by retailers such as heavy discounting and longer store hours at the start of the holiday shopping season.
The November advance was the biggest one-month jump since a 1.2 percent rise in May 2004 and was significantly above the 0.7 percent analysts had expected. Incomes were also up last month, rising by 0.4 percent, double the October increase but slightly below the advance that had been expected.
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