Revenues And Earnings: Another “Decoupling”

Posted on July 18, 2012 by DRenegade

As we approach ‘peak earnings reporting’ in the next two weeks, a quick glance at the state of the 65 companies of the S&P 500 that have reported so far may be useful. In yet another miracle of modern-day accounting, and just when you thought there was no more fat to cut, staff to lay-off, or Capex to cut, 73% of companies reporting have surprised positively on EPS while 65% have surprised negatively on Revenues. Industrials stand out in the liberal sprinkling of accounting fairy dust with 100% of the firms having missed top-line while 88% beat bottom-line. Is it any wonder that unemployment is rising once again and CapEx is falling?

65% Revenue misses versus 73% earnings beats…

 

The accounting fairies have been busy meeting and beating those expectations…

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The Only Campaign Argument That Matters …

Posted on July 18, 2012 by Hans

Which philosophy and set of policies has a demonstrated history of economic improvement?

http://www.theloudtalker.com/2012/07/10/economic-opinion/

Thanks to Bubba for posting this link.

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BofA Reports $2.5 BN Net Income On $1.9 BN Reserve Release, Private Repurchase Request Claims Soar

Posted on July 18, 2012 by DRenegade

There were several numbers one should focus on today’s Bank of America earnings release. They were not the Net Income EPS ($0.19 which beat estimates of $0.15), the Income before income taxes of $3.4 billion, nor Revenue net of interest expense ($21.968 which missed expectations of $22.71 billion). Here are the numbers that did matter: Loan Loss Reserve Release $1.9b billion, or 56% of pretax net income, Sales And Trading Revenue exluding DVA plunged by $1.9 billion from Q1 to $3.3 billion (and by $263 million from a year ago), and most importantly, counterparty claims by counterparties for Reps and Warranties purposes (remember those? the realization of their size caused the stock to plummet last August) soared from $16.1 billion to $22.7 billion sequentially: the highest it has ever been, even as the company only took a $395 million provision against losses, and the ending Rep and Warranties balance was $16 billion (driven by nearly a doubling in Private repurchase request claims from $4.9 billion to $8.6 billion!), or well below the potential outstanding claims. BAC is now reserve deficient by about $6.7 billion! Considering the company’s settlement with Syncora yesterday, and imminent settlement with MBIA this may be a tiny problem.

BofA Sales and Trading revenues implode as equity trading dries out, but a big collapse sequentially in the far more profitable Fixed Income.

Reserve release, at 56% of pretax Net Income, says why Net Income is completely meaningless.

More…

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Government Employees, Unions, and Bankruptcy

Posted on July 18, 2012 by DRenegade

logoby James E. Miller

During an economic boom, exuberance finds itself lodged in all types of industries.  When profits soar, so does the public’s disregard for prudence.  And as tax revenues rise, politicians can’t help but give in to their bread and butter of buying votes.  Periods of accelerated economic growth typically come in two different forms.  If capital is drawn from a pool of real savings to finance investment in more efficient forms of production, the boost in wages and income will be sustainable as long as consumers remain willing to purchase whatever is being produced in greater amounts.  In the case of a credit-expansion boom fueled primarily by fractional reserve banking and interest rate manipulation through a central bank, the boom conditions are destined toward bust.  Liquidation then becomes necessary as the bust gets underway and malinvestments come to light.

For private industry it means slashing costs, laying off workers, and possible bankruptcy to discharge debt.  For government, it typically means shoring up the lost revenue due to unemployment by raising taxes and promising to cut spending by some significant amount.  Usually those promised cuts never come to fruition.  Political reelection hinges too much upon filling the pockets of voter blocs.   When private enterprise tightens its belt, the state hardly bats an eye since its revenue is dependent on how much it decides to fleece from taxpayers in any given year.

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London braces for Israeli strike on Iran during 2012 Games

Posted on July 18, 2012 by DRenegade

The main Olympic Stadium in London. Security forces are working overtime on preparations for the games. (photo credit: AP/Sang Tan)

Taking into account the possibility of an Israeli attack on Iran during the 2012 Summer Games, the Olympic committee in charge of the London event has formed a special team to prepare for the contingency.
According to the Hebrew daily Yedioth Ahronoth on Wednesday., the team — consisting of politicians, diplomats, security officials and organizing committee personnel — wrote in a report that such a strike was entirely possible.

…

England is thought to be within the range of Iranian missiles and UK officials believe that a military confrontation between Jerusalem and Tehran could involve the country against its will.

The special team listed a number of steps that would need to be taken in the event of such a conflict, among them: opening a special command center, providing secret safe houses for foreign leaders wishing to meet for diplomatic purposes, and preparing for emergency evacuations of dignitaries.

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Looping Back to Liberty – 16 Steps Illustrating the Decline and Subsequent Restoration of America

Posted on July 18, 2012 by Cliff
  1. People don’t understand the system.
  2. A lack of knowledge coupled with being “fat and happy”, combined with propaganda promotes apathy and stupid decisions by the people concerning their political choices.
  3. Things get bad. People lose their homes, their jobs. The economy takes a nosedive.
  4. Things get SO bad, the media actually starts talking about it and folks like Ron Paul finally start getting recognized as honest people who are just telling the truth and waving the warning flag saying “You’re headed for disaster! Save yourselves!!!”
  5. People slowly put two and two together and begin getting concerned. Continue reading →
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From GBTV: Two very different opinions on how to avoid economic collapse

Posted on July 17, 2012 by DRenegade

On GBTV Monday night, Glenn spent some time focused on the credit crisis and where the United States economy is headed. And while they both agreed America was headed for economic trouble, they had very different opinions about what could turn things around and lead to future prosperity.
Continue reading →

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Now That the Polls Are Closed

Posted on July 17, 2012 by DRenegade

I saw the above picture on Facebook.

1.”For Christ Sake” should be “For Christ’s Sake”. What is the difference? One is taking the Lord’s name in vain and the other is asking us to do something for Christ’s Sake.

2. For Christ’s Sake? Really? If you support this sign’s message, you need to find a church that teaches the Word of God. Does anyone believe that Jesus is supporting Tea Party candidates that certain men and women deem fit for you to vote for?

3. “Vote Tea Party”? As I have written previously, Tea Party endorsements based on personal relationships or feelings will not give us effective government. Case in point. Ed Goodwin for Secretary of State is more qualified than Kenn Gardner? Both served as chairmen for their respective county commissioners’ board. Chowan County (Goodwin) annual budget: $16 million. Wake County (Gardner) annual budget: $900 million.

4. I will “assume” that the author of this “message” would have us also believe that Jesus is wanting us to vote “Republican”.

How do we win our country back from vain and aspiring men? By education and electing competent civil servants at all levels of government. How do we flush the country down the toilet? By voting for political ideologies and politicians who are incompetent or accept a label other than PATRIOT. As for the above sign: it represents everything wrong with the Tea Party in one succinct message.

David DeGerolamo

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Bill Whittle: THAT LOOKS BAD!

Posted on July 17, 2012 by DRenegade

httpv://www.youtube.com/watch?v=NJFgWA8odBM

From YouTube:

Ladies and Gentlemen, Bill Whittle is proud to present just a few of the 1001 REASONS TO VOTE FOR BARACK OBAMA. At least, he thinks he is. Hang on a sec — there might be a misprint in there somewhere…

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Who Exploits You More: Capitalists or Cronies?

Posted on July 17, 2012 by DRenegade

httpv://www.youtube.com/watch?v=kJeuoMh46JY

From YouTube:

One common claim is that capitalism exploits the masses for the benefit of the few. Many people who think capitalism exploits workers advocate increasing government power over the economy. Professor Matt Zwolinski suggests, however, that government power may be more exploitative than free-market capitalism. After all, in the marketplace, individuals have power over how they spend their money. The government, however, possesses the power to coerce citizens to pay for policies or programs they may not support, like bank bailouts. Zwolinski argues that bigger government makes citizens more vulnerable to exploitation.

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Soaring college costs and the Penn State private plane

Posted on July 17, 2012 by DRenegade

By Steven Brill JULY 17, 2012
I was amazed to see this sentence in the piece the New York Times’s ever-amazing Jo Becker wrote last week about all the goodies outgoing Penn State football coach Joe Paterno negotiated in a new contract even as the Jerry Sandusky scandal was imploding around him: “He would also have the use of the university’s private plane…”

Penn State has a private plane? Sure, the school probably charters a jet when the team travels. But do the university executives have their own jet? How many other universities have perks like this?

As this article from Bloomberg.com documents, the relentless rise in higher education tuition and other costs has trapped students in debt from readily available student loans backed by us taxpayers. It is fast becoming a national scandal akin to the mortgage crisis. Which means we need some tough, fresh reporting finally holding university leaders accountable for spending and management efficiency. Continue reading →

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HSBC Executive Resigns At Senate Money Laundering Hearing

Posted on July 17, 2012 by DRenegade

HSBC Holdings Plc (HSBA)’s head of group compliance, David Bagley, told a Senate hearing he will step down amid charges the bank gave terrorists, drug cartels and criminals access to the U.S. financial system by failing to guard against money laundering.

Bagley was among at least six HSBC executives who testified before the Senate’s Permanent Subcommittee on Investigations today after the panel released a 335-page report describing a decade of compliance failures by Europe’s biggest bank. London- based HSBC enabled drug lords to launder money in Mexico, did business with firms linked to terrorism and concealed transactions that bypassed U.S. sanctions against Iran, Senate investigators said in the report.

“As I have thought about the structural transformation of the bank’s compliance function, I recommended to the group that now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance,” Bagley said. “I have agreed to work with the bank’s senior management towards an orderly transition of this important role.”

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Clinton comments slap in Israel’s face

Posted on July 17, 2012 by DRenegade

Esther and Jonathan Pollard

The Committee to Bring Jonathan Pollard Home expressed outrage on Tuesday at US Secretary of State Hillary Clinton’s comments rejecting the possibility of the Israeli agent’s life sentence being commuted.

“With respect to Mr. Pollard, he was convicted of spying in 1987,” Clinton said. “He was sentenced to life in prison, he is serving that sentence, and I do not have any expectations that that is going to change.”

The committee said Clinton’s remarks stunned her Israeli hosts and marred the warm reception she had received from the Israeli public. A committee spokesperson noted that Clinton did not offer any explanation as to why the US would want to keep the aging and ill Pollard in prison forever. “[Clinton said] Pollard was ‘sentenced to life in prison’ and is ‘serving that sentence,’ the spokesperson said. “In what can only be regarded as unmitigated gall, while deflecting Israel’s requests for the release of Pollard, Mrs. Clinton pressed Prime Minister Binyamin Netanyahu and President Shimon Peres to release of a number of convicted murderers and terrorists to the Palestinian Authority, who she also said were ‘sentenced to life in prison’ and are ‘serving that sentence.’ Officials working to bring about Pollard’s release were reassured by the fact that Clinton has no say in whether to commute a prisoner’s sentence. They expressed confidence that US President Barack Obama would still respond favorably to requests for clemency for Pollard from Peres and Netanyahu.

“Clinton’s remarks represent a resounding slap in the face to President Peres, to Prime Minister Netanyahu, and to the People of Israel,” the spokesperson said. “Her remarks are also an affront to the American people, to the numerous Senior American officials and US elected representatives who are calling for Pollard’s release, to the American Jewish community and its leaders, and to honest people around the world who care about justice for Pollard. However, Clinton is not the decision-maker. President Obama is.” In 2000 while campaigning for the US Senate, Hillary Clinton said she had concerns about “due process issues regarding Jonathan Pollard’s sentence.” Her very different statements on Monday were the lead story in three Israeli newspapers on Tuesday.

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THE TOP BANKS IN THE U.S.

Posted on July 17, 2012 by DRenegade

POSTED BY ANN BARNHARDT – JULY 16, AD 2012

Here is the list of all of the banks in the U.S. that scored a PERFECT 0.0 on the “Texas Ratio” metric. Looking at the list, I actually know a couple of the banks in the central U.S., and thought to myself, “Yep. Not surprised to see them on the list. Good people.”I’m linking directly to the beginning of the list on page 2 of the story. The rest of the states are on page 3.

CLICK HERE FOR THE LIST.

If you’re looking to move your money into a good bank, here’s a good list to start from, but remember, just moving into a good bank won’t provide 100% security. No bank can protect you from hyperinflation.

Parenthetically, Obama announced today that his “second-term plan” is a massive increase in government spending, which is just more looting of the Treasury into the hands of his oligarch cronies. He used the Orwellian term “investment.” They are, without any question, executing the Cloward-Piven strategy of total economic and societal collapse in order to achieve complete dictatorial power.

Also, there is a real possibility that the Obama regime, being that its objective is fascism, will move to nationalize all banks. But, these banks on this list might give you more TIME.

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How Close Are We to New Great Depression?

Posted on July 17, 2012 by DRenegade

The risk of a new depression — a sustained, severe recession — has struck fear into the heart of markets and driven monetary policy in developed economies since the current financial crisis began.

“We’re in a very unfortunate position to be here,” Richard Duncan, author of The New Depression, warned on CNBC’s “Squawk Box Europe” Monday.

“When we broke the link between money and gold, this removed all constraints on credit creation. This explosion of credit created the world we live in, but it now seems that credit cannot expand any further because the private sector is incapable of repaying the debt it has already, and if credit begins to contract, there’s a very real danger that we will collapse into a new Great Depression,” he argued.

“If this credit bubble pops, the depression could be so severe that I don’t think our civilization could survive it.”

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