Economy, oil, yields and earnings down. Stocks suicidal

The major economic releases today were all weaker than consensus forecasts. Oil fell below its March 2009 Great Recession bottom in sympathy. North American treasury yields fell too.  Buybacks notwithstanding, corporate earning forecasts are rolling over (see below).  As they must.

Large cap stocks meanwhile continue to trade in an artificial nightmare of their own making.  The disconnect is so glaring it might be comical, except that the coming re-coupling is destined to compound deficits and hardships for many.
S&P decoupleschart source: courtesy of Bloomberg

David Stockman, former director of the Office of Management and Budget under President Ronald Reagan, talks about the outlook for U.S. fiscal policy and debt reduction. Here is the direct video link.

As we listen to the host in this clips toss out several nonsensical statements (that she picked up from some of her mostly sell-side guests) about the economy “getting better” and stocks “not being expensive”, it is helpful to remember that those who don’t do unbiased analysis work themselves, have no idea what they are talking about. After losses hit, they are the first to admit this and say that they were ‘just’ a host, or a salesperson–that they were relying on or quoting others who gave them bad or incomplete information and analysis.

The entire financial sales complex is built on this model of ‘not my fault, I was just repeating what I had been told.’ Buyer beware.

This entry was posted in Main Page. Bookmark the permalink.