Horrible revenue numbers show the real decline in business

[girl gone mad]

BIZARRO MARKET
http://pragcap.com/bizarro-market">the pragmatic capitalist

CNBC, Bloomberg, Yahoo Finance, etc are all reporting that companies reported “better than expected” earnings this morning. Let’s take a look at these great earnings:

Coke - $8.27B in revenues vs estimates of $8.66B. A $400MM MISS.

Caterpillar - $7.98B in revenues vs estimates of $8.86B. Nearly a $1B MISS.

DuPont - $7B in revenues vs estimates of $7.15B. A $150MM MISS.

United Technologies - $13.2B vs estimates of $13.92B. A $700MM MISS.

I can’t ever remember a market where investors turned such a blind eye to top line growth. It’s truly astonishing. These are phenomenally bad revenue figures. There is just no two ways around it. This trend of rising stock prices on poor underlying earnings cannot and will not last.

[Taverner]

1. DuPont has screwed themselves lately

Its not just the economy - they made some VERY bad investment decisions

[DJ13]

2. I can’t ever remember a market where investors

Thats the problem, theres few real investors still trading.

The volume is extremely low, and I read a week or so back that institutions trading between themselves accounts for over 70% of current activity.

With the institutions giving each other a reach around its no wonder the market inches ever higher against all logic.

[Po_d Mainiac]

3. The MSM can slap all the lipstick in the world on those #'s

But the #'s are still swine. Bad revenues equate into even worst profit figures = layoffs = less tax revenue = weeds (not green shoots)

[Warpy]

4. I keep warning people not to pay much attention to the Dow

because the only relationship it has to the larger economy is one of earnings, which are going to suffer greatly this year and every year until those overstuffed, overpaid bastards in Congress finally twig to the fact that the economy runs from the bottom up, not the top down.

While people are underpaid, underinsured, and have absolutely no faith in their future, they're just not going to support the consumer economy. Without the 2/3 of the economy the consumer economy represents, the rest of it is simply not going to do well, at all.

No business can survive without customers, no matter how much bailout money it gets.

[pokercat999]

5. With 70% of our economy consumer generated and with

under and unemployment at such high levels and rising I have one question.... WHAT ECONOMY? Our economy in recent years was really a jobs program for China and India.

To rebuild what WAS our economy we need millions of good jobs, where are these jobs going to come from?

Manufacturing? I don't think so, new manufacturing jobs are all offshore. Tech? not there as those jobs are sent to India as fast as possible. We can't just do one another's laundry and call it an economy.

Congress MUST get off it's fat ass and level the trade playing field if we are to have any chance of a recovery. We need laws that force our trading "partners" to obey US OSHA, EPA and wage laws at the minimum.

[truedelphi]

6. Your last sentence is key.

People tout as "accomplishment" some aspect of lifestyle improvement coming to them because of an Obama-welfare or help-for-the-needy program.

Even in this household, we get about $ 100 more a month because of an unemployment benefit Obama brought about.

I have no problem with welfare-style benefits under normal situations. For example, someone is ill and needs help, fine. Eventually they will get better and become productive. (And for the one or two out of ten that doesn't get better, that is fine too.) An affluent, jobs-based society can see to the care of those struggling, no problem.

But what we have here and now is an entire economic program, supposedly devised by the smartest guys in the room. The plan thus created has taken between 11 to 24 Trillion dollars to help out Wall Street, with only these crumbs thrown to "welfare" and social programs. No jobs are being created for the long haul. Credit is not being issued from the banks to legitimate businesses that need the loan assistance. Consumers with even A-one credit are given high interest loans.

Geithner and Bernanke are either blind to what they reap or else they are bought out, and I doubt that they are blind.

They should remember what has hsitorically happened to tyrants in any and all crumbling social systems.

[JohnWxy]

7. Yes, the REPUBLICAN DYSTOPIA is not going to disappear in 6 months.

Looks like the Wall street analysts underestimated the true impact of The Deregulation Disaster and a couple decades of declining real income for most of the population (except for the wealthiest 5% - thank you GOP) and of several years of overly expansionist monetary policy (to make the economy look better than it was) which goosed consumer spending and created a housing bubble.

So I guess Obama's economic team were not the only ones to underestimate the magnitude of the economic damage of this REPUBLICAN DYSTOPIA.

Of course the Obama economic team and every economist interviewed said it would not be until 2010 (at least) till the economy would actually start to look healthy again.

What surprises me is anybody is surprised that a major economic downturn would start to turn around in 6 months!

[clixtox]

8. Truly astonishing irrational exuberance!

All, (I mean every one), indications point to a continuing economic disaster with a particularly bleak, extended interlude at the bottom.

Deflation, which can not be postponed forever, and the upward adjustment of unsustainably low interest rates will inevitably lead to capitulation and a radical restructuring of markets, margins, and prosperity.

Swine flu is an ironic name for an over-hyped malady because it describes the financial paradigm going forward too aptly, IMHO.

Greed is basically unsustainable. With less and less justice and fairness evident, fundamental changes are required.

One way or the other...

Get ready, more ready!

[truedelphi]

9. But reading the exuberrant post made me happy, while

Reading your post is depressing.

I have been hitting my head against the proverbial wall thsi week. Ona ccount of discussing the economy with friends who have been busy convincing themselves that M$M's reports that "we have turned the corner" and all is going smoothly now.

Some of these friends clearly know they are fooling themselves. But like one of them said - "What can we do? So why not be positive."

Problem is I want to find a way to be positive, while confronting the dismal truth, and I want to change things.

[clixtox]

10. I ran out of lipstick...

Best wishes in all ways, especially in your quest to "change things"!

I would appreciate any, even incremental, improvement in our situation.

Peace and Love