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Earnings Collapse -- Worst on Record

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posted on May, 16 2009 @ 08:31 PM
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Trader's Narrative (TN) offers the following...well, narrative:


The magnitude of the economic collapse, as shown in the aggregated earnings of the S&P 500 Index is frightening. The chart below, from Chart of the Day, shows 12-month, as-reported S&P 500 earnings. With almost all earnings reports in, over the past 20 months, this has fallen over 90%.

Keep in mind that this is showing real (or inflation adjusted) earnings. If current estimates are confirmed, towards the end of the year, we may see the first 12 month period with negative S&P 500 earnings!




To date, this has to be one of the more discouraging charts we've seen. It doesn't, however, cover the the period preceding the Great Depression, so TN dug up Professor Robert Shiller's data from this period (chart at opening link) and found that the peak-to-trough plunge was a mere 67% during the period of 1929 to 1932. This pales in comparison to the 1916-1921 period -- when real earnings plunged 87% -- which is still shy of our current plunge. And keep in mind, both of these plunges were over several years, whereas we've collapsed 90% in 20 months.

[edit on 16-5-2009 by theWCH]




posted on May, 16 2009 @ 08:39 PM
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reply to post by theWCH
 


Wow, that chart looks like a re-make of 1929. It doesnt surprise me. That chart doesnt consider hyper-inflation that we are destined for.

Obama is raising interest rates. They are planning in advance, yet they have no remedy for this apocalyptic train wreck of an economy we have created.

Soon it will take a wheel barrel full of money to buy a loaf of bread.



posted on May, 16 2009 @ 08:45 PM
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reply to post by theWCH
 


Modern Money Mechanics outlines the financial cycles of money creation and loans. Lokking at financial markets; it is well known that this cycle takes 70-80 years to complete.
With this knowledge, I often wonder if this is the drivel fed to the public, to make the populace more comfortably accept lower wages?
When people are with the option of job-loss or compromise through lower wages, yet told of skyrocketing unemployment; lower wages are the safer alternative for survival in a capitalist society.



posted on May, 16 2009 @ 10:26 PM
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the U.S.A is fuc%^D so much worse than the average idiot believes

there will be no recovery for the lower middle or upper middle classes

there will be no return to "normal" economy ......because a credit boom of that magnitude is not normal and can not be restarted without decades of debt restructuring

there will be no accountability for any politician, and MSM b.s....any lobbyist or high power lawyer fighting for the elite interests

there will be a growing deficit crisis thanks to the trillions thrown down a black hole of BAILING OUT of the 5 banks who caused the mess.........and who should instead be chopped up and thrown into the mix of the other 8000 banks that are still healthy enough

from this deficit crisis the DECIDERS will again act in our best interests and say "the house is burning down you don't question the fire fighter".......now the astute would reply....well you are also the arsonist but we are not astute (and ordinary sheeple characterize/lump the astute w crazies) ........from the coming deficit crisis .....they will privatize social security and tax medicare heavily ......they will bend us over long after the lube (media b.s) has lost effectiveness

we are willfully pacified thru media

1. playing on our hopes that during a crisis our leaders will take care of us
2. and two constantly feeding us B.S

there is also a likelihood that there are plans for the world inc. our country that bring us back to a feudalist state ........similiar to century's ago.....a virtual class system where the ability to move up and down is minimal....because right now with the ignorance and corruption (acting as a high pressure system and a low pressure system) this cat 5 hurricane (our socio-economic system) will take the path of least political resistance .....big mutli national industry leaders swallowing competition ....getting a tighter strangle hold on the MSM and Politicians...sustained high unemployment.... 3'rd world class system.....and likely a war between u.s/u.k/aust.......and china /russia..........or some more innovative way channel our public anger



[edit on 16-5-2009 by cpdaman]

[edit on 16-5-2009 by cpdaman]



posted on May, 17 2009 @ 01:17 AM
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reply to post by cpdaman
 





there will be no accountability for any politician, and MSM b.s....any lobbyist or high power lawyer fighting for the elite interests

Has there ever been

I think thats why the worlds in this mess!
Fight the power



posted on May, 17 2009 @ 01:18 AM
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I have seen that chart - thx.

If anyone can tell me why the market is still hanging in the do let me know.

[edit on 17-5-2009 by leo123]



posted on May, 17 2009 @ 01:27 AM
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reply to post by leo123
 


I can only surmise that, like most stories in the media forefront; Its mostly Hype! Hype neede to add gravity to a story= crap story!
I think its a clever ploy to make individuals contently accept lower wages; because hey: "The whole world is doing it tough"!



posted on May, 17 2009 @ 01:34 AM
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Some people say it is getting better.
That is utter nonsense.

The bottom has not even dropped yet. Wait for it folks.
The worst is yet to come.



posted on May, 17 2009 @ 01:38 AM
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I downloaded the Shiller data, which dates back to January, 1871. Since 1871, there have only been five periods where inflation-adjusted earnings have dropped by 50% or greater:

6/1892-12/1894 (28 months): 52%

12/1916-12/1921 (60 months): 87%

12/1929-12/1932 (36 months): 66.67% (666!!!
)

9/2000-3/2002 (19 months): 55%

And our current fall, which began in June, 2007.

The first three all took place during or immediately before periods which are now referred to as "depressions."

[edit on 17-5-2009 by theWCH]



posted on May, 17 2009 @ 04:42 AM
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reply to post by theWCH
 


My point is people, that as mere citizens; we have no say over how our governments spend tax revenue!
Therefore is there any point in us worrying about how financial markets are going? The answer is No; unless you are an investor.
Other than that, it is psychology of woeful, negative and hypnotic alliteration.
They are making you believe you should care, when you just have to be content with your lot.
If you've lost your job, I am sorry for your situation. As humans we have been blessed with remarkable adaptation skills; at times we all must step out of the comfort zone and be strong; and be positive!



posted on May, 17 2009 @ 01:29 PM
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reply to post by theWCH
 


Good research. I like your comment on this one. "12/1929-12/1932 (36 months): 66.67% (666!!!"

I also think September 15th was signficant when the DOW dropped 777 points, after Lehman fell.

I am watching for another 666 fall that will stick. That will set off all the survivalists. Spam sales jumped and survival store got heavy business the day of Lehman.

[edit on 17-5-2009 by wonderworld]



posted on May, 17 2009 @ 01:36 PM
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My own charts have had similar effects over the last few months. I recently got into charting the economic collapse and I've got to say that this out weighs anything the 1929 collapse did.

We are in new territory with new and different types of businesses compared to the '29 collapse. It is amazing to look at my charts and just have my jaw hit the floor every single day with how bad this is.

The sad part is that this collapse was caused by the same thing that caused the '29 collapse.

Historians will look back on these days in 50 to 100 years and shake their heads, wondering how stupid we could be to allow this to happen twice.

Edit: KRISKALI777, the point of watching these economic woes and following these things to so teach ourselves to not allow this to happen again. It is the basis of Deny Ignorance that we here in the ATS Economically Inclined follow. Why allow just the investors to follow this information when we ourselves can become knowledgeable in the subject enough to teach others.

[edit on 5/17/2009 by Tentickles]



posted on May, 17 2009 @ 05:39 PM
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Originally posted by Tentickles
Edit: KRISKALI777, the point of watching these economic woes and following these things to so teach ourselves to not allow this to happen again. It is the basis of Deny Ignorance that we here in the ATS Economically Inclined follow. Why allow just the investors to follow this information when we ourselves can become knowledgeable in the subject enough to teach others.

[edit on 5/17/2009 by Tentickles]


the point in watching these things is to learn so you can protect yourself when another huge deleveraging occurs ....or if we pay attention we can protect ourself from the next big consequences of a deficit crisis (and to learn that the MSM won't tell you jack!)...not so they don't happen again......they will continue to happen so long as those in power can continue to TAKE RISKS and be BAILED OUT rewarded when the Ponzi credit boom collapses......

[edit on 17-5-2009 by cpdaman]



posted on May, 17 2009 @ 05:56 PM
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Originally posted by leo123
I have seen that chart - thx.

If anyone can tell me why the market is still hanging in the do let me know.

[edit on 17-5-2009 by leo123]


When you look at earnings to price ratio on the S&P (broadest index) you see that as earnings fall, prices rise. This is abnormal, and indicates the markets are so screwed up right now, that some driving force if pulling the markets upwards .. when in fact all indication is they have not hit their "bottom" yet.

In other words, an extended rally that is inflated through abnormal means -- also called a "Bubble" -- which by it's very nature is do to burst.



posted on May, 17 2009 @ 09:56 PM
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Originally posted by Tentickles
The sad part is that this collapse was caused by the same thing that caused the '29 collapse.

Historians will look back on these days in 50 to 100 years and shake their heads, wondering how stupid we could be to allow this to happen twice.


It's also the same thing that caused the Panic of 1873, and the Long Depression that followed [although, according to the Shiller data, this did not have such a drastic plunge in earnings (34% decrease from 11/1874-12/1876) -- maybe because the underlying problem originated in Europe? Or maybe the problem just wasn't as severe?]. It seems like this sort of thing happens every time that no living person can remember the previous depression.

Nickolai Kondratieff explained this in terms of the four economic "seasons" which seem to always repeat. The brilliant economist Joseph Schumpeter said that K-Cycles are the most important thing to understand in all of economics.

The interesting thing is that this was supposed to happen in 2000, but Greenspan (who was a student of Schumpeter and believer in k-cycles) was able to kick the can down the street a little ways, thinking that he could avoid k-winter all together. He reportedly told a friend decades ago that if he failed in preventing k-winter, it would lead to a depression that would "make the Great Depression look like a Sunday School picnic." Ooops...


[edit on 17-5-2009 by theWCH]



posted on May, 17 2009 @ 10:08 PM
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Part of the driving force of the markets and any artificial gains is purely psychological. The fed will put out stories like this one today:

www.yahoo.com...

In the hope that it can create a bump, or slow a drop... either way it is a sign of desperation on the part of the current administration.

If you actually read the above article there is really NO actual information or data given, just carefully planned words and fancy language mixed with positive speculation. It's funny actually to watch so many investors fall for it over and over again, until the actual data comes out, then the cycle continues.

If they did tell the actual truth, can you imagine what it would do to the markets?

The reality is that what is happening equates to a pathetic attempt to re-inflate a busted balloon that still has holes in it.

[edit on 17-5-2009 by Walkswithfish]



posted on May, 18 2009 @ 05:33 AM
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reply to post by cpdaman
 





Originally posted by Tentickles Edit: KRISKALI777, the point of watching these economic woes and following these things to so teach ourselves to not allow this to happen again. It is the basis of Deny Ignorance that we here in the ATS Economically Inclined follow. Why allow just the investors to follow this information when we ourselves can become knowledgeable in the subject enough to teach others. [edit on 5/17/2009 by Tentickles] the point in watching these things is to learn so you can protect yourself when another huge deleveraging occurs ....or if we pay attention we can protect ourself from the next big consequences of a deficit crisis (and to learn that the MSM won't tell you jack!)...not so they don't happen again......they will continue to happen so long as those in power can continue to TAKE RISKS and be BAILED OUT rewarded when the Ponzi credit boom collapses......

Hi CD, thats cool; but whats the point of wathching something thats hopelessly corrupt. We already know its corrupt, so the only thing to be gained is; a more indepth knowledge as to how and why its corrupt.
The head of the fish is rotten; which means the rest will be there too, its only a matter of time.
the capitalist banking system is obselete. Humanity needs a change.
Its no good trying to polish turds




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