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Meet Richard Bernstein's Jolly And Much More Optimistic Replacement David Bianco
With normalized cover page headlines like these:
- Robust S&P 500 EPS growth expected for 2010 and 2011
- S&P 500 EPS recovery to outpace the US GDP recovery
- Financials to contribute to EPS growth in 2010 and 2011
- Normalized S&P 500 EPS is above our 2009E and 2010E EPS
- Our normalized EPS supports a strategically bullish stance
is there any wonder how happy Bernstein and Rosenberg must have been to go to work every day? One can hardly wait to see what the overall tone of David Rosenberg's replacement Ethan Harris will be like.
h/t deadhead
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The research being produced by BASML is a joke. Ken Lewis should be ashamed. I wonder how many of ML thundering herd have left since the acquisition. Does anyone know?
lots....any names were covered in the financial msm (wsj, ft, etc) and many of the better retail/private bank brokers jumped ship.
no problems though, salli krawcheck will work her citi magic on the herd.
Bailout Bubble!
Long on cynicism, long on disdain, short on patience...
Where's Mackie when you need him
"It's like I'm talking to a bunch of children who just don't get it!!!" (or something like that)
The business model of the TBTF banks only works in a bullish paradigm.
In Jan 2009 consesus EPS for q3 2009 s&p was +2.6%. As of July 31, 2009 it was -21.5%.
Good luck with those 2010/2011 forecasts.
This is the kind of crap I like to see out there!
Clear efforts to try and pump an already over-pumped market at or near its highs.
Now that's a green shooooooot I can sink my teeth into.
Let's assume the Sec of Treasury frequently has market discussions with a select group of hedge fund managers. Should this not send up red flags all over the place? How in the world is possible for Paulson or Geithner to legally be permitted to have private discussions with the GS Hedge fund or JPM Hedge Fund? Why is it not required for all private discussions to be disclosed immediately to the general public? Raise your hand if there is any Hedge Fund Managers or Private investors out there in ZEROHEDGE land who might have an interest in speaking with the Treasury Sec. It would have been nice to get that call the day before the last August 07 rate cut!
bianco seems to think that the setting aside of loan loss reserves is peaking....from everything that i have gathered, most commercial loans on bank's balance sheets are carried at par...perhaps he is aware of greater "pretend, amend, extend" in the offing.
and, what about those nasty siv/spv doodads that are coming back on balance sheets in 2010? (unless the ABankersA wins the lobby battle to overturn the FASB).
DH,
Let's examine possible motives for FASB's recent apparent change of heart.
1) It is a genuine change of heart. If so, it marks one of the speediest crises of conscience that I have ever seen; mark to market having been relaxed less than 6 months ago. I genuinely hope this is the motivating factor. However, if it is, then we have an inordinate number of grossly incompetent people inhabiting key positions in our Federal government's cabinet departments, Congress, and agencies (regulatory and otherwise).
2) It is the accounting rules equivalent of a bait and switch (i.e., relax a rule to help draw investors back into financial stocks and float APOs of those companies, only to pull the rug out from under these investors at a later date). I genuinely hope that this is not the motive because this would mean that, rather than large numbers of the aforementioned grossly incompetent people, we have large numbers of people who know exactly what they are doing (and it wouldn't be very nice).
I am open to additional thoughts regarding motive.
the rule change i was referring to is not mark to market (fasb 157). i was noting the rule change already effectuated (don't know the rule number) requiring off balance sheet fecal matter to come back on in jan 2010. yuengling and the aba team are working very hard to undo this one.
i did see that fasb wants to amend 157 and make it stricter. that will be interesting. as to the motive on toughening 157, my guess is that fasb fits your number one definition...remember that fasb did not want to change it but did so after the hammer came down from congress. seems to me that fasb is trying to do "what's right" here....
I see now that to which you were commenting DH. Again, w/r/t #157, my hope is that motive #1 is accurate.
truthfully, i think fasb's motive IS #1 option...there was definitely resistance to the change from fasb directors but several congress reps (kanjorski (sp), gary ackerman, and implicitly barney) made it clear that they would legislate a change. the fasb people simply got bulldozed big time.
i still don't think they will be able to reverse 157 under the current economic and political climate
Read the book, The Sociopath Next Door, that explains it all. Really.
Dixie,
Thank you for the read recommendation.
In all honesty it is a good book, especially for people who work in a Wall St type arena (I imagine law firms and politics too).
Dixie, thank you again. Picked it up this afternoon. Looks very interesting.
He's making a top down prediction without any substantial backup data. Think that exports or foreign operations (Asia) of domestic companies, commodity prices and emerging economy led global growth is going to create 40% earnings gains for the S&P in 2010 - 2011 shows a complete lack of economic understanding. The growth rate of those areas (based on the small percentage they represent in the total) would have to be astronomical with a probability of achievement of near zero. Without the US consumer (which there are fewer of working with less income) and their willingness (along with the willingness of a financial institution to accommodate) to increase debt to any significant degree the economy's "malaise" will start around the 1st quarter of 2010. Because of cost cutting during the first quarter comparables from a net income basis have been easy.........starting Q1 '10 if revenue doesn't ramp considerably the game is over for earnings. All the other nonsense is nothing but sand and is meaningless. I advise people not to take their eye off the ball in the shell game that "green" shooter are trying to promote. How many people thought that we would end up touching S&P levels of September 1996 again. I'm willing to bet it was zero. Even these fools. The imbalances still exist and have most likely only gotten worse.
What are net margins without leverage.....and I mean consumer leverage???
PS: To believe anything these guys say about loan losses and provisioning.......would be too funny!
I just wonder...do these people actually believe the shit they put out...or is someone holding a gun to their head or waiving a big pretty check in their face?
Let's assume the Sec of Treasury frequently has market discussions with a select group of hedge fund managers. Should this not send up red flags all over the place?
recommended: my newest bookmarked finance site: http://www...
As someone on the buyside who reads a fair amount of research, I find Bianco (ex-UBS) has always been a perma-bull. He never, ever, takes a deviant view. He reminds me of Abby Joseph Cohen of GS.
From the little I read of Ethan Harris while at Lehman, he seemed to be one of the more realistic and bearish economists on the street. The irony is that the banks with the more bearish economists (ML and LEH) were the ones that got hurt the most. Ex-Lehman analysts (now Barcap) were actually the most bearish on the street for SPX in 2009 (expecting it to hit 600).
If only they listened to their in-house economists in 2007!
thanks for your insight on bianco
Seems I have been here before. Remember when Merrill forced out Charlie Clough as the CIS because he was too bearish. That was 1999. Put Christine Callies in and she ramped up the equity allocation right into the tech wreck. Is it dejavu all over again....?