Since January we have been pounding the table that 2012 is nothing but a carbon copy of 2011. Whether this is due to the limited imagination of the central planners, or a quota on the number of pages in the market's script, we don't know. What we do know is that since now everyone acknowledges that the two years have been fused into one, we suggest readers take a double dose of Dramamine ahead of what comes next, which can be easily seen courtesy of the following chart from SocGen's Albert Edwards.
and as Andrew Lapthorne notes:
?Of course this is a particularly silly reporting season period, where on one hand earnings estimates have collapsed, yet on the other the majority of companies are producing positive ?surprises?. Such silliness will only encourage the idea the equity market is increasingly not really fit for purpose?. However there is no denying that earnings optimism is currently very weak, registering a lowly 34% globally and a terrible 27% in the US. Fixating on the forecast growth rate for this year is of course misleading as these can evaporate very quickly, best to look at year-on-year changes in 12-month forward or trailing earnings which are now showing many region profits to be in decline.