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2012 - 2013 Corporate Margin Bridge In One Word: "Magic"
At the end of January we first discussed the rolling over of corporate margins and sure enough the consensus for 2012 margin compression has turned our way with only 42% of the S&P 1500 now expected to increase net margins YoY. What is simply 'incredible', in the words of Morgan Stanley, is the jump from 2012 to 2013 expectations of net margins as this chart so well indicates. In 2013, 89% of firms are expected to miraculously rediscover their pricing power and increase net margins. Our word for this is 'magic'.
Perhaps we need an Olympic Ice Hockey commentator to take over the programming on CNBC? Do you believe in miracles?
Chart: Morgan Stanley
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Horseshit
My word for this is horseshit.
barliman
60 Minutes ran a segment last night discussing the "only" thing that may impair this amazing US recovery: the European debt crisis. Based on the graph above, it looks like gravity/reality may impair the recovery as well. 60 minutes clip link below is definitely worth the watch:
http://www.ftense.com/2012/04/60-minutes-imperfect-union-europes-debt.html
More fucking QE.
This next round will have to amount in the tens of trillions. The next after that 100's of trillions.
they ain't gonna QE, they gonna bring on financial repression; aka, capital controls.
They'd need a war or something for that. Oh wait, nevermind. Presidential decree is good enough too. And fuck Congress. They 'do nothing' anyway.
Capital controls will increase the need for more QE.
If the price of goods have upper limits you are going to see empty store shelves.
This means that taxable (non-black market) economic activity will crater.
This means the budget hole will become even bigger.
This means Helicopter Ben will have to buy more TBills.
You can have price controls on specific products but not on everything. This is unless you live in a country where the state controls manufacturing and distribution (China, USSR). The only way for price controls to work is to have an authoritarian regime in a country that PRODUCES ITS OWN SHIT.
capital controls as in controlling your capital into treasuries.
My word is BATTshit.
Not wanting to be argumentative ...
... but you misspelled the word. It should be ...
BATShit
barliman
Fat finger :)
Would have been more convincing had you typed "Fatt finger".
Horse hockeystick! Notice how the move to 89% will complete the form of a perfect hockeystick - ironic?
TD - you need a cut and paste hockestick overlay now. It would make it so easy for the sheeple to understand.
<deleted>
My word for this is 'inflation'.
You guys are flailing and being indirect and talking your book.
My word for this is dismissal. You only get margin spikes like this by firing people.
HE SHOOTS, HE SCORES!!!!
I vote for Don Cherry.
Between him and Bidermann, CNBS would be the fashion draw....
Because everyone knows the comedy station bit can't last.
i vote for the other don cherry, he has way better chops.
Don Cherry & Herbie Hancock - Bemsha Swing (Live)In one word I'd call it: BTFD. Its widely understood in all languages
They can just make numbers up.
This is the only chart that Birinyi reads when he uses his crayon & ruler (except on his chart the dotted lines part is solid)...
PJ...you inadvertently left the word "can" in your post. :D
My word for all this is 'bullshit'.
Inside the loony bin, everything is possible.
The only margin expansion that will be happening in 2013 is that of the military industrial complex as we expand our wars into Iran.
If they've predicted even $1 higher margin in 2013, I'm surprised more didn't.
After all, when a dollar is only worth 25 cents a year after the prediction, and everything costs 4x more, with 2% wage increase, everybody will buy more shit. After all, they can afford it.
Must....regain.....magical DOW 13,000....by close....must....pump.......harder...
Quietly, Au has outgained the Dow by 1.5% today, so far (Dow down ~ 0.7%, Au up ~0.8%). These days happen from time to time with little fanfare...and yet they go a long way to explaining the year-end deltas.
Dont sweat it. Look at volume. Anemic. Awful. In a couple more months, zero.
What does a pension plan do if no one is catching that "great" stock action. They collapse same second people understand equities aren't cash or remotely even close to a replacement. That implodes horribly. Bond market goes into full scale pound sell button mode.
Bottoms out at S&P 97...then government paychecks start bouncing. All of them. Including all those IOU's called dollars. Chain reactions now though, could be anything right now. Iran, Bee's, Diesel, butterfly farts in asia and an earth quake happens in Detriot. Anything.
Look at volume. Anemic. Awful. In a couple more months, zero.
Not zero...but just enough for the algo-masters to conform the market movements precisely to the narrative.
Two things that need to happen there. Print job of trillions of dollars...easily done...interest rate hike...won't happen in a million years.
No. No. and No.
You are analyzing. That's not what 2011 taught you. You were taught that governments will do anything to keep the wheels turning. There will be NO bond market collapse. If there is a seller, he will be murdered. Literally.
Anything means Anything. There is no way in hell that they will let their ponzi fall because some action is against an arbitrary law. If they must break the law, they will break the law. If a court tries to prosecute, they will defund the court.
Nothing within the control of governments, legal act or not legal act, will be allowed to take the system down. Learn the lessons. Greece gutted bond holders. GM gutted bond holders. Dominique Strauss Kahn was jailed until he resigned, and then released.
The law and your analysis based on it is not relevant. Only things governments cannot control will take it down. Like the physics of oil.
Very true. Gotta fix my script it appears. #PeakDiesel and #PeakSweetLightCrude is the only real concern as is #PeakCoal.
No problem they just will keep widening the gap ... and I would not bet against the PPT in doing just that. There is absolutely no one trading this market so the manipulation can be accomplished quite easily.
I love the absolutely obvious mechancial grind up also. Just in a relentless linear fashion. Or, better stated, as fucking blatantly artificial as possible.
Isn't it also true that something like 93% of people think they are better-than-average drivers?
60% of the time, it works every time.
Vanity defines humanity. We are all the center of the universe.
Yeah...that's my fault...I drag the number down...93% of all drivers are better than me.
The margin you refer to is not the margin which matters. There is no market, there is only the bernank.
Kinda looks like Al Gore's Global Warming graph
I was thinking more like Al's actual v. his expected "performance" on massage nite...
Is thie were we all act like underlying factors, fundamentals, and normal valuation measurables matter?
Meanwhile, Ben is slamming fuckloads of money into the market to fully reverse today's opening loss?
I love this shit. Can we talk PE ratios next?
I check Websters and the MLS and I believe the correct metaphor would be "slamming massive fuckloads".
The ' Douche Bags " at Goldmans and their (XLF) brethren will lower guidance, and make everything OK! Look at the melt-up happening as I post!
welcome back from holy week, Y/C!
{holy week = birthdayParty, BiCheZ!}
i wuz "hoping" we hadn't lost you to a midlife crisis
tell us about her?
Thanks Slewie. I read your post's last night. Nice work , I must say! I forgot how to " shrinkey-dink letters". A little help would be appreciated? It's written down somewhere. I suspect it's when Sacrilege did that update on ( green /red arrow policy), last spring.
Those { Bankrupt Europeans sure know how to party}! Been on Holiday since last Thursday! ( DENIAL)...
Midlife Crisis, Yea I'm F..king the Maid! Wink Wink. I hope you and your family are well. I noticed Tyler open a chat "area".
That is a nice addition to Z/H. I'll( watch), see how it works out.
the slewies are all fine, wherever they are, we can hope. thxz
egypt again, huh?
imo, our resident douchebag banksters have still got everything "screwed down tight"; tyler predicted the "india" bid in gold, yest: +$13.+; plat + $13.; silver -$0.17 <shrugZ>
europe will re-open tomorrow; stay tooned2C if they can continue to forestall the rush to the exits by QE ri-fin's...
for those of you long prepH, since only 80% of "accountableBullshit" is underwater at this point, i don't see a problem. just push the buttons and print
really, why tf not, at this point? as long as 8BilPeople agree that these moronic colored coupons are worth 10nth the papier&cotton and rfd's, what is the problem? L0L!!!
{try experimenting w/ the X sub&super-script}
so, there was more than one? we have time...
You forgot J&J and Treasuries.
Helicoptors and ass wipes! nice post by the way!
I know the IRS margins will be improving next year, which makes this seem all the more unlikely.
Their hiring like crazy at the IRS too. And gotta love the $500mill handout from brobama to the IRS too!
Hope springs eternal.
Hopium feels really good too.
As I said, by Monday who is even going to remember what happened on Friday. New Week, new Hope
The neverending con!
I just had a "Over the Rainbow" epiphany!
w/ the nore @ 131+ and the bond @ 140.4, you ain't the only one!
say hi to the man behind the curtain, from all the BiCheZ!
I forgot one thing Slewie. I'm still long aud/usd and aud/jpy. I follow China very closely. When you factor in the carry and fair value, along with debt/gdp, the aud is a pretty good hold! Even if ( RBA) lowers the rate 25 basis points. I think q-1 earnings will be on ( par), and it's an election year.
Just trade smart and fast! Who is the ass clown that junked me? Show your face pussy!
well, as you were discussing with others here, b4, china's resource needs are important to your aussie friends
there was a little hiccup, there, and then more ??? abt china
including the "news" about the political situ; also internationally, 3 carriers off iran, but not too much sabre-rattling from the shitheaded MIC; they were probably celebrating holy week, too...?
interesting the two 'shorts' on the crosses; almost as if you thought "they" were using to yen to support&'takeDown' the dollar... or rather: "dollar"
China printed solid CPi PPi #'s, and they were off 3 days last week. If you look at GBP and EUR, they are at the higher end of their s/t trading ranges. I'm not impartial to aud, but it is ( oversold on the daily), and has a good fundamental outlook.
I'm personally doing some repositioning, into aud because s/t,( jpy and usd) are their #2 & #3 trading partners, and I like the 4.25% carry on a low debt /gdp, coupled with Japans loose policy ( recent trade numbers).
What do I know though? I'm long aud/jpy. It takes two sides to make a trade. That's why I enjoy your posts.
March's low unemployment number was due to Catholics not eating meat on Fridays during Lent now that Lent has ended, unemployment will drop and margins will soar!
"Erroneous! Erroneous, on all accounts!"
when the margins first rolled over (see chart), tyler wrote an amazing piece about why and what it meant
shot the fuking bull'sEye out, too, BiCheZ!
Ok course they bold "only 42% of the S&P 1500 now expected to increase net margins YoY." That figure has hardly ever been over 60% and has never reached 70%. So only 42% is not very bad.
89% is obivously retarded tho.
Vincenzo Coccotti: Sicilians are great liars. The best in the world. I'm Sicilian. My father was the world heavy-weight champion of Sicilian liars. From growing up with him I learned the pantomime. There are seventeen different things a guy can do when he lies to give himself away. A guys got seventeen pantomimes. A woman's got twenty, but a guy's got seventeen... but, if you know them, like you know your own face, they beat lie detectors all to hell. Now, what we got here is a little game of show and tell. You don't wanna show me nothin', but you're tellin me everything. I know you know where they are, so tell me before I do some damage you won't walk away from.