Recession

How Half Of America Lost Its F**king Mind

It really does feel like the worst of both worlds: all the ravages of poverty, but none of the sympathy. "Blacks burn police cars, and those liberal elites say it's not their fault because they're poor. My son gets jailed and fired over a baggie of meth, and those same elites make jokes about his missing teeth!" You're everyone's punching bag, one of society's last remaining safe comedy targets.

Case-Shiller Home Prices Rise To 2006 Record Highs

"Everything is awesome," right? According to the non-seasonally adjusted S&P CoreLogic (Case-Shiller) Home Price index, prices have recovered all of their losses and are back at the highest since June 2006 record highs in August. All 20 cities saw home prices rises year-over-year (and 14 up MoM) but we note that this data does lag the disappointing home sales data from September.

Largest Dow Component 3M Reports In Line Earnings, Cuts Top End Of Guidance

While 3M's current quarter data was good, the largest Dow component confirmed a recurring trend observed among other reporting companies, namely skepticism about the future, when it trimmed the upper end of its full year EPS guidance: "For full-year 2016, 3M updated its forecast for earnings per share to be in the range of $8.15 to $8.20 versus a prior range of $8.15 to $8.30."

Why There's No Economically Sustainable Price For Oil Anymore

"At this point, it has gotten bad enough that there is no price that works. The price that producers need is higher than what the market will bear.  So you end up with a situation where there isn’t any kind price that really will work."

Goldman Cuts S&P500 Earnings Forecasts For The Next Three Years

"We cut our S&P 500 earnings estimates for each of the next several years. Our revised operating EPS forecasts now equal $105 (2016), $116 (2017), and $122 (2018) reflecting annual growth of 5%, 10%, and 5%, respectively. Low interest rates and peaking margins constrain profit growth in Information Technology, Financials, and Telecom and drive the reduction in our index-level EPS forecast." - Goldman Sachs

Frontrunning: October 24

  • The CEO Behind AT&T’s Huge Time Warner Deal (BBG)
  • AT&T-Time Warner deal sparks calls for scrutiny in Washington (Reuters)
  • Wall Street’s $40 Billion AT&T Pledge Offers Fees and Risks (BBG)
  • Bernie Sanders: Obama Administration “Should Kill” The AT&T-Time Warner Deal (Deadline)
  • Oil prices under pressure as Iraq resists joining output cut (Reuters)

Weekend Reading: Time To Be A Contrarian?

Currently, there is little argument the “bullish trend” remains intact. As such the mainstream analysis, if you can actually call it that, continues to the tout the inherent benefits of low cost, passive indexing and the ultimate “chase for yield.” However, it is here the real danger lies. Much of the monetary flows into passive indexes is actually NOT PASSIVE. When the eventual reversion comes, and it will, the pain inflicted on individuals, as is always the case, will turn “passive indexers” in “panicked sellers.”