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It Sure Feels Like A Recession

Tyler Durden's picture





 

While stocks suggest all is well, and anecdotal macro data (seasonally slandered by fiscal cliff drag-forwards and 'weather') might offer hope that green shoots are back; one glance at the following chart of US, Europe, and Asia (ex-Japan) EBITDA tells a very different story. With cashflow clearly barely budging, is it any wonder that companies are creating conservative balance sheets? It sure feels like a recessionary environment...

 

 

Chart: Morgan Stanley

 


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Tue, 02/12/2013 - 15:14 | Link to Comment King_of_simpletons
King_of_simpletons's picture

Don't tell that to the Federal Reserve.

Tue, 02/12/2013 - 15:19 | Link to Comment Say What Again
Say What Again's picture

ES is growing at over 50% annualized.

Why do I care about something as mundane as, "earnings?"

Tue, 02/12/2013 - 15:30 | Link to Comment AlaricBalth
AlaricBalth's picture

I'm heading to the library to donate a bunch of books. One of them, Security Analysis by Graham and Dodd was once a favorite but, thanks to the Fed, it's useless. I think I will tell them to put it in the History section, because as a Finance book its utility is, alas, no more.
-sarc-

Tue, 02/12/2013 - 15:35 | Link to Comment The Juggernaut
The Juggernaut's picture

Are you kidding me?!  You can do NOTHING and the Federal Reserve and DC will boost up the numbers.  Fuck working and paying taxes.  Get a printer and print your annual income.  Fuck it.

Tue, 02/12/2013 - 15:42 | Link to Comment Manthong
Manthong's picture

Everything is peachy-keen when you are bringing in extra billions.

U.S. posts $3 billion budget surplus for January
http://www.reuters.com/article/2013/02/12/us-budget-surplus-idUSBRE91B1E520130212

I guess we are in the clear now.

Tue, 02/12/2013 - 15:15 | Link to Comment DrDinkus
DrDinkus's picture

this 'market' is boring as BOCK. hoping our dear leader's words tonight will wake up some red algos. or time to find a new career.

Tue, 02/12/2013 - 15:30 | Link to Comment walküre
walküre's picture

So you may get a couple down days. Enough to get bears excited and pile into shorts. Then it snaps back up when stupid shorts start to cover. Who is playing this anymore and why?

I've waited patiently for the big drop in gold and silver. I'm loaded lock, stock and barrel to convert all remaining fiat into metals. It's not happening and I'm getting nervous.

Tue, 02/12/2013 - 15:15 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Oh, pshaw. If we've learned anything over the last 15 years, it's that Earnings Don't Matter.

Tue, 02/12/2013 - 15:16 | Link to Comment sbenard
sbenard's picture

It CAN'T be a recession. We still have green ink in the printer!

Tue, 02/12/2013 - 15:16 | Link to Comment lunaticfringe
lunaticfringe's picture

Nothing fundmentally sane matters anymore. It is a brave new world they've created for us. 

Wed, 02/13/2013 - 17:50 | Link to Comment Radical Marijuana
Radical Marijuana's picture

Indeed, lunaticfringe! I tend to represent what I call the Fringe Cubed positions ... Welcome to a Bizarro Hall of Mirrors, that is our world, as its hinges swing closed.

As your sarcasm implies, we are entering into the most cowardly, neofeudal, slavery systems, that there have ever been! The runaway triumphs of globalized electronic fiat money, backed by atomic bombs, are so astronomically insane that there are no sane ways left to attempt to resist them! Nothing fundamentally sane matters anymore, inside of a "brave new world" of financial frauds backed by weapons of mass destruction. GIVEN HOW TOTALLY INSANE THAT REALITY HAS BECOME, THERE IS NOTHING SANE LEFT WHICH CAN OPPOSE THAT!

Tue, 02/12/2013 - 15:19 | Link to Comment buzzsaw99
buzzsaw99's picture

Still have a year or two worth of loss reserves they can book. It's all good.

Tue, 02/12/2013 - 15:19 | Link to Comment blindman
blindman's picture

everything is fine, the course is good and sound
untill it isn't then no one could see it coming
or detect that there was any underlying rot,
that is it. move along, nothing to see here.

Tue, 02/12/2013 - 15:19 | Link to Comment Flaming Ferrari
Flaming Ferrari's picture

Yawn. I guess if you were bearish at 1360 in November and calling for the markets to tank then you must uber bearish now it's 160 pts higher. And prob uber miserable too.

Tue, 02/12/2013 - 15:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

In the limited world of people (small business people) I talk with, I see no green shoots.  The "numbers" they (TPTB) put out (and, to be fair, some new construction I see) say things are slowly improving, but among those I know who have "skin in the game", it looks recessionary and ugly out there.

Tue, 02/12/2013 - 15:21 | Link to Comment thismarketisrigged
thismarketisrigged's picture

if the market does not go major red tommorow, then there is a big problem.

 

tonight is our night, i better fucking see some futures dow - 80 plus, s&p- 15, nasdaq - 20.

 

nothing obama says tonight can be positive, the algos better read it as a bad thing.

 

i want a free fucking market, not one intervened by the fed

Tue, 02/12/2013 - 15:26 | Link to Comment lunaticfringe
lunaticfringe's picture

good luck with that

Tue, 02/12/2013 - 16:48 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

"Buzz" I heard today is that many (even on the D-Team) are worried that Obama is lurching into hubris.  THAT convinced me to watch his speech after all tonight, to see if he is heading out into the deep end...

Neither do I see any good end coming...

Tue, 02/12/2013 - 15:31 | Link to Comment Dr. Engali
Dr. Engali's picture

He could say.."I Quit!" .........that would be positive.

Tue, 02/12/2013 - 16:04 | Link to Comment waterwitch
waterwitch's picture

Maybe lightning will hit the Capitol.

Tue, 02/12/2013 - 15:21 | Link to Comment Charles Nelson ...
Charles Nelson Reilly's picture

Cramer says otherwise, and he is always right!

Tue, 02/12/2013 - 15:26 | Link to Comment Say What Again
Say What Again's picture

Cramer was sanctioned many years ago.  Does anyone know the details of his malfeasance?

Tue, 02/12/2013 - 15:30 | Link to Comment Dr. Engali
Dr. Engali's picture

Yes he got a contract extension and a signing bonus.

Tue, 02/12/2013 - 15:45 | Link to Comment Hippocratic Oaf
Hippocratic Oaf's picture

.........and 2 more fucking billboards on the west-side highway.

 

Wed, 02/13/2013 - 02:04 | Link to Comment Notarocketscientist
Notarocketscientist's picture

Dunno but the retard admitted on camera that hedge funds spread rumours to try to crash companies - he gave a specific example of what he did when in the biz...   I'd say he was a moron for saying that but more likely he'd just come from doing a FAT LINE in the CNBS shitter and got carried away when he went on air.

Tue, 02/12/2013 - 15:23 | Link to Comment Dr. Engali
Dr. Engali's picture

Feels like a recession? When were we upgraded from the depression that started in 2000?

Tue, 02/12/2013 - 15:24 | Link to Comment francis_sawyer
francis_sawyer's picture

Sooner or later we're going to run out of countries who we need to bring freedom to by bombing the shit out of... What's going to happen to GDP then?...

Tue, 02/12/2013 - 15:32 | Link to Comment Dr. Engali
Dr. Engali's picture

They are going to bomb and bring the shit out of and bring democracy to the U.S.....we hate them for their freedoms.

Tue, 02/12/2013 - 15:34 | Link to Comment fonzannoon
fonzannoon's picture

does anyone know if Obama is going to update us on the whole high speed rail thing?

Tue, 02/12/2013 - 15:55 | Link to Comment espirit
espirit's picture

Christ, don't you think we're being railroaded fast enough?

/sarc/ on/off - I forget which.

Tue, 02/12/2013 - 15:40 | Link to Comment francis_sawyer
francis_sawyer's picture

Yeah ~ well all I can say is that I'm going to laugh my ass off the day that the LAST TWO STANDING are Israel & the United States... It'll be like that moment in 'Moonraker' when James Bond asks Drax about his 'master race' plans & a quizzical looks comes across the face of Richard 'Jaws' Kiel [who was Drax's bodyguard & enforcer up until that point]... 'All hilarity ensues' from that moment forward...

Wed, 02/13/2013 - 02:01 | Link to Comment Notarocketscientist
Tue, 02/12/2013 - 15:25 | Link to Comment OutLookingIn
OutLookingIn's picture

RECESSION???

More like an ongoing depression! 

Looks like 1933 and the worse is yet to come.

What the last 4 years have been is a major "Dead Cat Bounce!"

Tue, 02/12/2013 - 15:25 | Link to Comment CheapBastard
CheapBastard's picture
10 Insanely Overpaid Public Employees

 

See our slideshow here on 10 insanely overpaid government employees. We reported all their yearly earnings, which in addition to base salary, includes bonuses, overtime pay, and other pay.

Read more at http://www.thefiscaltimes.com/Articles/2011/07/13/10-Insanely-Overpaid-Public-Employees#YzmlhjPCrkocvosU.99 Gosh. I'm speechless.
Tue, 02/12/2013 - 15:27 | Link to Comment AcidRastaHead
AcidRastaHead's picture

Dammit! If only we could rid the markets of excel errors, fat fingers and weather then the 'economic recovery' could truly become 'self-sustaining'.

Tue, 02/12/2013 - 15:27 | Link to Comment yogibear
yogibear's picture

Still not enough muppets paticipating. It's not a recession until more muppets are sucked in and Wall Street says it is.

History repeats. So does greed.

 

Tue, 02/12/2013 - 15:31 | Link to Comment Hongcha
Hongcha's picture

I too think the tide is changing; and yes, I have been trying to short this flying pig.  I went short again at SPY 152.24 earlier today.

Even if O utters a Magisterial comment on the stock indices, in his firmest, best baritone ... how much more gravity can they defy?

And if he does not, considering his relish (and the Bernanke's) in having done so before, what might the effect be?

And now Japan is in on the act.  There really appear to be only adolescents running the show.  But adults are watching.

Volume is dropping off a cliff with the vix.  I think there is more upside than down at this point.  If you are short.

Tue, 02/12/2013 - 15:32 | Link to Comment thismarketisrigged
thismarketisrigged's picture

why the fuck are all the financials up 2 plus percent today, considering the market is not that high today?

 

when the market is deep in the red ( the rare time) the financials, the sector that should suffer most, falls o so slightly.

 

whenever market is deep in green though, u will get 4 plus percentage point moves, or even today when its up modestly. 

 

such a fucking joke

Tue, 02/12/2013 - 15:36 | Link to Comment All_Is_Well
All_Is_Well's picture

All I know is that food prices are going thru the roof!

Tue, 02/12/2013 - 15:37 | Link to Comment Atlantis Consigliore
Atlantis Consigliore's picture

the NAR of realtors say you cant be a stud or a real woman without being in debt, in FHA 3% and buying a home any home now:

see your pimp realtor hooker quickly, as the stock market is a scam with  $ 85 printing a month going into stocks;

remember homes, its not a home, its an investment in the future.

SPONSORED BY, DA FED the Czars, Regulators, and all those scammed, and the central planned USSA economy, LOL.  FORWARD. 

Who have you fired today, to save whats in your wallet.? 

 

 

Tue, 02/12/2013 - 15:48 | Link to Comment busted by the b...
busted by the bailout's picture

I think I've lost what little mind I had.  I don't understand anything anymore.

 It is getting harder and harder to see how this is sustainable, and if not, how it can possibly end well.

We went from what I thought was a sterilized operation twist to and unsterilized $85B / month in QE4 without a recession or even a significant stock market correction!  Why?

Why was it needed?  And what do we do next if it doesn't work?  I thought the prudent thing to do before QE4 would be to begin to unwind a little or at least keep some powder dry in the event the economy faltered.  But no, they did just the opposite, so what happens if it falters now?

And I keep thinking, now in the first year after a presidential election would be the best time to begin to normalize the economy.  TPTB often use the first year of a presidential term to have a recession in order to ensure expansion and good times as the next election approaches.  But it appears to be a "no" on that one too.  Apparently they think they can keep this bloated pig flying for the entire four years.  The “great moderation” is back!

But if the worldwide CB blown bubble pops before then?  Well, O won't care anyway, I guess, because he is going out the door; his legacy would take a big hit though, imo.

But what do I know anyway?  Less and less over time it appears; until all the things I thought I knew about the economy are shown to be wrong and the world becomes completely incomprehensible.  Perhaps it's just Alzheimer’s and everything really is OK, but I just can’t “see” it anymore.

Tue, 02/12/2013 - 17:22 | Link to Comment Shizzmoney
Shizzmoney's picture

Just wait until the "QE5" talk starts........

Wed, 02/13/2013 - 01:59 | Link to Comment Notarocketscientist
Notarocketscientist's picture

You are too optimistic.

There will be no 'normalizing' of the economy.  There can not be. 

How can rates of interest increase without crashing us?  Higher rates would kill car and home sales - they would put a massive drag on a country that owes nearly 17T.

Bernanke knows exactly what he is doing - he is desperately trying to keep the Titanic afloat for as long as possible - and he is praying for a miracle in the meantime.

There will be n recovery - I said this 5 years ago - the US and world's best case scenario is a Japan like outcome - one where we remain stagnant for two decades then crash.   I don't see us getting 20 years out of money printing though

Tue, 02/12/2013 - 15:55 | Link to Comment Jim in MN
Jim in MN's picture

http://www.advisorperspectives.com/dshort/updates/DPI-Monthly-Update.php

 

Real per capita disposable income says....Lost Decade in full effect.

 

 

Tue, 02/12/2013 - 16:20 | Link to Comment WTF_247
WTF_247's picture

Until the tables flip, all news = buy.

Earnings could drop 15% from 2012 levels, market will just be viewed as cheap.  When the fed is handing out free money (with the hidden agreement to buy the market with it), you do as you are told.  Plus, considering the Fed said he has their backs there is absolutely no worry the market will dip even 5%.

Longer term this is not sustainable at all, but when you control the mechanisms that make the market move you can do whatever you want.  We could come out with GDP -10%, futures would gap down (limit probably), Fed can just go into the futures market and buy unlimited contracts if they want.  Need another 50bil - just print it up and buy, buy buy!  It is this type of stupid thinking that has wrecked the market for now.

Any shorts HAVE to be hedged with calls to avoid getting killed.  Since the beginning of the year there have been maybe 3 dip days where the market was down 1%, 2 of the 3 fully recovered by the close.  Most of the rest of the days finished higher.  Most stocks are correlated with the market - there is not a lot of sector rotation going on.

Tue, 02/12/2013 - 16:32 | Link to Comment q99x2
q99x2's picture

Polarization works in such a way that unexpected possibilities rise equal to the unreal perception.

Change is forced to occur at a faster rate.

The longer that change does not occur the more sudden and dire the consequences to the existing perception.

Lasting real stability equal to the change follows.

In the case of an extinction level event the stability of the new system may remain as long as 7 billion years.

Tue, 02/12/2013 - 17:21 | Link to Comment Shizzmoney
Shizzmoney's picture

Because it IS one?

I know the corporations/government keep tellign us, "no, no, no...it's a 'recovery'!", but yet again, if you were in their positions - you would think so as well:

In the meantime, we're left with an economic "recovery" in which the bottom 99 percent saw its pre-tax income decline over two years, and, during the second year, even the top one percent experienced negligible pre-tax income growth. If not to the one percent, where, in 2011, did the (admittedly anemic) economic recovery go? We have progressed from a members-only recovery to a Where's Waldo? recovery.

So where is Waldo? Initially I figured he had to be hiding in the nosebleed sections--the top 0.1 percent or the top 0.01 percent. But that turns out to be wrong.* The biggest gainers in 2011 were the bottom half of the top one percent, i.e., those making between $358,000 and $545,000. They saw their incomes increase, on average, by 1.70 percent (not much to write home about, but you've got to put a weak recovery somewhere). Interestingly, the group situated above the 99.99th percentile (2011 threshold: about $8 million) lost income in 2011. Remember, Saez urged me via e-mail, that not all the expansion in Gross Domestic Product for 2011 would be measurable as somebody's income. Undistributed corporate profits and non-taxable health insurance benefits both grew in 2011, Saez noted, but these wouldn't turn up in the IRS data on which he based these calculations.

Tue, 02/12/2013 - 17:32 | Link to Comment CDNX fan
CDNX fan's picture

Another nice up day again for me - inflation is driving my portfolio to record highs and I don't even own a "stack"! E/S is a superb inflation hedge, ain't it?

Tue, 02/12/2013 - 18:07 | Link to Comment Sigep0612
Sigep0612's picture

Com'on...what would you expect?  Do you think some high ranking nitwhit will standup and say..."Ya know what...I have doubts about the integrity of our national finances?"   The whole idea is to slowly melt into oblivion.  Frankly, the world (especially the US) can't handle the swan dive into a shallow pool.  It's too painful.  So....the world leaders have decided its more tolerable to drain the pool and raise the platform and then let everyone dive in.   

If world leaders told the real story their would be blood running in the streets.   There is no major event that will cause a rapid deceleration.  The turmoil is oozed out gradually.  When things get bad......there is a diversion. The stock market increases to create an illusion of wealth.  It calms the nerves and gives politicans the ability to convey the fact that "Hey, we're recovering."  Unrest in the Middle East is calmed by money in the pockets of the right people.  China and Japan going to war?  Global Warming?  Gun Control?  Immigration reform?  They're all side shows to distract our attention away from the real culprit..DEBT and lots of it.  

I don't have a clue as to when the merry go round stops, it may be two months or two years, but I do know its only a matter of time folks.  So drink up...give your kids a hug...eat well....because the times are a changin'.        

Tue, 02/12/2013 - 18:51 | Link to Comment mt paul
mt paul's picture

debt

the new white meat....

Wed, 02/13/2013 - 02:56 | Link to Comment Aussiekiwi
Aussiekiwi's picture

Just got a new laser printer delivered with Toner etc all ready to go, for $29.....for some reason as I sit here and look at it and imagine all the manufacturing steps involved, the transport and shipping to Australia etc and all the other costs involved in getting to the point of the Courier handing it to me at the door of my home, it makes me very nervous about the future.

Tue, 02/12/2013 - 19:04 | Link to Comment trendybull459
trendybull459's picture

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