Steve- OT
Thanks for having the courtesy to notice what happens on this thread like always. Europe was mixed yesterday, reason no interest cut from Banque de France as well as Bundesbank, I think the earnings are coming alright, although First Call thinks we are 3% lower than last year third quarter, but Technology which lost the most in the second quarter of this year is making amends, Financials were prime movers in most of these quarters now BKX is down from 950 to 550 and hovering around 740 area stil 25% lower than the previous highs, as I have always said this market takes no prisoners.. I would think that big days of BKX making double digit growth based on huge one sided John Meriwether type bets are over, anyway most of these bets on exotic instruments were being conducted by Hedge Funds and banks were innocent lambs extending credits, what has come out of this carnage is the fact that global financial system was able to unwound huge trillion plus positions without putting the stability of system at stake, it was always in the back of many a minds what happens if every thing goes wrong, can we manage the worst, I would think that recent test of workability of global system its strength and weakeness has demonstrated that it is solid and can take abuse to an extent which is far beyond computers outer limits, it worked perfectly well and annuled Murphy's Law that anything which can go wrong will go wrong, it happened to quite an extent, things did go wrong, SI people are not of the same standard as professional pundits they were shivering green, but the system held on it took multiple abuse but did not break, the market was pricing itself for lock outs that did not happen, Lehman was suppose to close doors, Bankers Trust was rumored to hide losses that has wiped out its capital, now it is said that this not good enough, first the estmastes are lowered and than companies handily beat those estimates, but in my opinion no one expected when selling this market like a mad that we would meet lowered expectations.
No one at First Call is ready to answer one small question when they keep hyping the issue of lowered earnings and that simple question is that although S&P earnings have increased to 41$ but the levels of this index are still around Oct last year levels, why it so that with everything else counted at the end of the day we at composite are only at 1699 same as last year, last year MSFT made 29 cent this year it mad in smae quarter 51 cent, somewhere something is just not right, we are priced of this kind of slow earning momentum, with interest rates at these lows I would hink that fourth quarter will deliver better momentum. No one ever answers question that make perfect logic like raised on these bearish sites, it is cited 'Japan interest cuts never really helped the economy? But is Japanese economy with a bad debt of a trillion $ comparable to US economy? The domestic nature of demand led growth in US is exactly what is required and being tried to be stimulated since last five years, demand and troulbled banks are at core of this whiole Japanese crisis leading to injection of 550 bilion $ worth of public funds- In these circumstances it is sad to see that reputed Banker's Credit Analyst keeps making these comparisons, is Japan rate cut comparable to US. If this farce and gross misrepresentation can survive every hting else would also. I dismiss these questions as foolish as they just don't make economic sense, another example is Jerry Favours 'tryst with centuries' fixation, whenever Fed has cut the rates invariably markets fall and test new lows, now this is a common fact that rate cuts come amidst weakening economies by the time they work their ways thru it is atleast a quarter so initial euphoria of cuts is overwhelmed by realities on ground as weaker economic numbers and earnings doose cold water on expectations it is only after a series of cut the economy start showing signs of life, this is the first time that we are seeing cut of rates in a strong economy environment, the old theories are being thrown to fire, never before rate cuts have been made in this kind of strong economic environment, so it ican only improve profitibility associated with lowered $, if Abby says something it has lot of thinking behind it, Jerry Favours look at carts and make a point it is looking at chart with knowledge that makes al that difference, if one is not getting this type questions while examining numbers one will never become independent of CNBC. To cut that umbilical cord . I need to think I make comparison ,I ask questions , learning is an unending process I go thru it every day, even when I am wrong temporarily I know I will see my levels back, in these mnarkets longs survive to tell stories -- short termers loose every thing to bad timing and whip saw. The only way to suceed is learn about treacherous contours of this very diffcult global phenomenon unfolding before us, provincial and fly by night kind of approach never works, I am in my opinion is still a student but I think I will learn quickly... |
