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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Sr K who wrote (124898)	10/24/2012 10:14:13 AM
From: RetiredNow	Respond to of 149317

I'll ignore your first sentence. However, It's a good point you raise. Essentially, you are saying the lower earnings in Q3 and guidance lower for Q4 is due to corporations intentionally lowering their earnings this year to minimize tax impacts this year, which will have the effect of increasing their earnings in future years, when tax rates are anticipated to be lower. That's quite possible. However, there are several problems with that theory. First, Obama will not lower taxes on corporations. We know that. Romney may lower taxes on corporations, but first he's not likely to win, second, the Democratic Senate won't let a measure like that even get a vote, and third, the pressure to increase taxes on the last pool of major cash (corporations) is abominably high due to the massive ongoing deficits the next President will have to deal with. Therefore, the probability that taxes will decrease in coming years is extraordinarily low. I'd give it a 1-5% chance, optimistically. Corporations are not fools. They are hoarding cash, hunkering down, getting lean, and saving for the coming storm. They expect tax increases and ongoing uncertainty, not favorable treatment. Another problem I see with your theory is that you can look at the major macro indicators, which I've posted plenty of times on these threads, and they are declining. So the simplest and most likely theory is that earnings are coming down, because the macro environment is bad. You are falling into that trap of looking for a theory that fits your desire that everything is ok, instead of just looking at the big picture and providing the simplest explanation for poor corporate earnings. The simplest answer is usually the correct one.

To: Sr K who wrote (124898)	10/24/2012 2:18:17 PM
From: RetiredNow	Read Replies (2) \| Respond to of 149317

Juniper and Cisco seem to have other reasons for having a challenging Q4 earnings outlook, than tax reasons...And they aren't the only ones. 7 companies out of 8 who have given a future earnings outlook have said the macro environment is squeezing their growth and/or margins. Juniper provided a bleak fourth quarter guidance in view of the cautious spending nature of its customers. Read more: community.nasdaq.com --------------- At the same time, Mr. Chambers echoed other technology executives' caution about the state of business spending and the federal regulatory climate, saying any improvement in the global economy must come from the U.S. "Business leaders are not confident in the state of the economy," Mr. Chambers told Dow Jones Newswires during a gathering here hosted by research firm Gartner Inc. He pointed to underwhelming revenue from other big technology providers such as chip maker Intel Corp. (INTC) and Microsoft Corp. (MSFT) in recent days as signs of corporate trepidation. Investors often take cues from Mr. Chambers's observations because of the predictive nature of tech spending and the broad scope of Cisco, which supplies the routers and switches that make up the Internet's backbone. Shareholders balked in May after the San Jose, Calif., company forecast much slower-than-expected revenue growth in its fiscal fourth quarter, blaming rough economic conditions in Europe and meager telecommunications spending. Mr. Chambers returned to many of those themes in August with comments that overshadowed talk of some encouraging signs from state and local governments in the U.S. Read more: foxbusiness.com