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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (54773)	2/26/2006 6:05:50 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Russ, what do you think of tax receipts for this tax season? 2005 could be the peak yr for real estate related capital gains. Could we have a positive surprise similar to the repatriation of corporate income last year? Ramsey

To: russwinter who wrote (54773)	2/26/2006 6:27:26 PM
From: Rarebird	Respond to of 110194

>>"If I'm wrong... business are going to deploy all that cash on the balance sheet and accelerate their capex to such an extent that we will see stepped-up hiring, a drop in the unemployment rate, which necessitates a meaningful pickup in organic personal income growth that more than offsets the inevitable decline in housing related stimulus."<< David Rosenberg; p.8. Historically, when one sees the amount of cash held climbing in relation to debt owed in corporate balance sheets, one can be certain that these corporations are preparing for an economic downturn. I read somewhere that Merrill Lynch took the reported operating earnings of the S&P 500 companies for the US third quarter at its reported face value of 11.5 percent and then factored in the $US 160 Billion in US stock buy-backs. They found that if these buy-backs had not taken place, US EPS would have fallen 7.8 percent in the third quarter. That would have had to be reported as a drastic fall in the earnings of the S&P 500. LOL. What all these maneuvers do is to camouflage the real situation. That sets up a potential situation for the US stock market in which it suddenly breaks down out of the blue. When the real situation is being hidden, the potential increases for some negative news spooking the market much worse than it would have if the real situation had already been known and discounted into present share prices. When the real situation isn't known because of all these maneuvers, a market becomes inherently fragile. In such a market, those in the know privately act according to what they know. Those not in the know, but subjected to the market camouflage, spook when shares do go down because they have seen no reason for them to do so. Spooked investors worsen market declines. That's the real situation today on Wall Street.