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Weekly Themes And Charts
From Goldman Sachs, primary unfolding Q3 themes:
- Theme 1: Consumer Outlook remains weak; “End demand” in question. In a marked change from last earnings season, when companies discussed a “stabilizing” economy, this quarter’s conference calls focused on the continued challenging environment for the US consumer, a slow economic recovery in 2010, and the lack of underlying “end demand”.
- Theme 2: Pricing Power remains weak due to low Capacity Utilization. Most management teams cited weak pricing power in the current environment. A few even expressed deflationary concerns. Firms tied to commodities-related businesses tended to have a slightly more favorable
outlook on pricing power. Several calls referenced low capacity utilization rates and the probable lack of pricing power until utilization rates rise. - Theme 3: Cost Cutting: Still at rapid pace, expect more in 4Q and 2010. Management teams pointed proudly to their ability to cut costs faster than expected in recent quarters and alluded to further expense reductions ahead. Only a few firms mentioned a willingness to re-hire staff into their company. Rather, companies tended to emphasize the permanence of expense reductions.
- Theme 4: Use of Cash: Appetite for capital spending slowly growing. In contrast with earnings seasons during the past year when companies emphasized the importance of cash positions on the balance sheet, management’s 3Q comments expressed a growing tolerance for capital
spending. Although not all companies had ramped up spending plans, most teams mentioned some sort of revitalization in spending via dividends, share repurchases and/or capital expenditures.
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How the heck do the majority of firms make permanent expense reductions ??
Only one way : anticipate little or no product demand growth.
This is bullish for stocks, no ??
All of this is gospel; after all God is on Goldman's side guiding them to new heights of greatness.
Too funny!
Do you think Blankfein invoked God hoping that the Bible thumpers will defend GS when the meltdown hits?
TD, thanks for sharing Goldman Sachs weekly Racing Form. Is this the Racing Form with false tips for little guys and retail investors, or the Racing Form for Goldman Sachs wealthy clients who get tipped off days or weeks before the horse race, or is this the Racing Form for Goldman Sachs trading desk who get tipped off days or weeks before wealthy clients?
I'm confused. I'll stick to a clear, honest Daily Racing Form from America's Turf Authority Since 1894 at:
http://www.drf.com/
"Rather, companies tended to emphasize the permanence of expense reductions."
The new normal. People really need to get focused on survival before it is too late. Consider the reality of a world with 17+% of the US workforce not commuting to work every day and oil at $77+/barrel.
Think real carefully about that. Someone has decided this is the only way to stretch oil.
Personally, it'd be nice to get a job. Instead, 700B is in the pockets of companies like Goldman.
Now that's change I can believe in. Before Obama, it was possible to support my family.
'More positive earning surprises'
Please don't make me sick.... so you underestimate on purpose so they can surprise!
Now that isn't a surprise is it!!!!
Fiddle and fiddle and scam and spin... here's another pyramid scam I want to sell you, roll up, roll up suckers....
What's the matter with the US futures? In the red?????????????? Shock horror...
Can't be the GS night shift slept through the alarm for work did they?
Don't worry, all is good now
Mark Vitner from Wachovia/now Wells Fargo told the crowd at the NAHB Fall Forecast that he's not allowed to talk about he sees - he was kidding in a sense, in a sense he was not - and that while everyone stares at GDP he sees a profound decline in "final demand," and that when he models the US economy based on what seems pretty evident - the consumer is dead - unemployment should hit 12%. That's the official baseline, and that means a 20% or better "all in" unemployment and underemployment number. That, friends, is a depression.
I'm convinced there's no Mad Max coming, but there is a serious collison with reality coming that may take some really odd, completely unforeseen form. One world currency perhaps, when the CDS detonate and they have to start over. If you believe it - and do we really believe it? - empty your 401k tomorrow, pay the tax and trade in your fiat dollars for stuff that lasts, and precious metals.
i read the following from prag cap earlier today about the friday employment numbers and laughed like hell when i read your story Ned.
"Cyclical recovery is evident as job gains rise in temporary help and education/health and smaller job losses in retail and financial services. Turn in the labor market is very evident. Do expect job gains in 2010. –John Silvia, Wells Fargo"
The guy Kostin who writes this stuff should be looked at as a hero. Can you imagine how hard it must be to work inside the (Bullish) giant vampire squid and actually question the rally via the "end demand" arguement?
The man has courage.