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WTF Chart Of The Day: "It's All About The Earnings"

Tyler Durden's picture


"Earnings are the mother's milk of the stock market," is the oft-repeated anthem of a million marching lemmings; parroting the same phrase come hell or high-water in the dismal hope that they can gather moar assets-under-management, garner moar fees, and make moar TV appearances. However, as the chart below shows, we suspect perhaps given the reality of earnings expectations that the new normal mantra for stocks-for-the-long-term should be - "Central Bank liquidity is the PCP of the stock market."


it would appear the 'mother's milk' is souring...

(h/t @Not_Jim_Cramer)


and furthermore, since September 2011 earnings have been stagnant  - when a multitude of indicators (macro and market) began to decouple from stocks,


- driven almost 100% by buybacks...

(h/t @RonnieSpence)


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Mon, 05/20/2013 - 21:14 | 3582562 Spitzer
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Furst bitches

Mon, 05/20/2013 - 21:18 | 3582572 Thomas
Thomas's picture

And when record profit margins contract...

Mon, 05/20/2013 - 22:52 | 3582875 jerry_theking_lawler
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please quote me on this one....




if you speak the truth, buybacks is the only thing saving this mother from burning down. the truth will set you free. just ask Santelli. if you actually spoke the TRUTH, your ratings might actually soar like the market!!

Tue, 05/21/2013 - 00:27 | 3583056 Rick Blaine
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Tue, 05/21/2013 - 07:15 | 3583339 Mentaliusanything
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I watched three Falcons today , locked by claws, fall from great height. not one... not one would release,! as they fell, flapping in a death spiral I prayed that one would have the smarts enough to release. None did. They hit the ground in a spray of dust, still locked and determined that they knew the right path and was the most powerful. I ran over and found three beautiful birds dead on the ground, still locked in a race to the bottom. Each had a name! one was Arbie, one was Ben and the other was called Euro. I think it a great shame that pride comes before a fall.

There is a lesson in that but I cannot figure it out





Mon, 05/20/2013 - 21:23 | 3582594 Freewheelin Franklin
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This ain't

Mon, 05/20/2013 - 21:41 | 3582648 philipat
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But The Fed, The MSM and the TBTF Banks have, very successfully, convinced the sheeple that it is those (Grossly inflated) PM's which will tank if QEternity is "Tapered". Welcome to The Matrix.

Mon, 05/20/2013 - 21:16 | 3582566 XenoFrog
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Recovery Summer rolls on!

Mon, 05/20/2013 - 21:35 | 3582629 LetThemEatRand
LetThemEatRand's picture

Is it a Wet Hot Recovery Summer, and is it on streaming yet?

Tue, 05/21/2013 - 07:31 | 3583367 ncdirtdigger
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Mon, 05/20/2013 - 21:18 | 3582570 fonzannoon
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It's the dark ages on here right now. Earnings?

Mon, 05/20/2013 - 21:18 | 3582575 infiniti
infiniti's picture

The crazy thing about stocks recently is that they tend to go vertical at the worst times.

1999. 2007, 2013... all have the same symptoms. Extremely high Shiller PE, no earnings growth, flagging economy... stocks go vertical!




Mon, 05/20/2013 - 21:48 | 3582667 chump666
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The crazy and frightening thing is that say 2007, stocks were attached to commodities going vertical (oil at 147 etc) .  This time, commodities have collapsed, stocks are going vertical.

That's an all out deflation nightmare looming.


Mon, 05/20/2013 - 21:52 | 3582687 fonzannoon
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You think chump? I see oil going higher. I see food prices going higher. I see industrial metals possiby going lower, that is about it.


Mon, 05/20/2013 - 22:05 | 3582730 Cursive
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It's one of those what-is-your-time-frame kind of things.  Producer margins compress, forcing prices for goods and services up, which lowers demand and prices decline.  This debt-fueled inflation is unsustainable and will (eventually) result in prices collapsing.  Now that the Fed has shot its wad, what will re-inflate prices after this bubble pops?  For me, the only logical answer would be debt repudiation/jubilee.

Mon, 05/20/2013 - 22:12 | 3582749 fonzannoon
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It's funny that the movie fight club was based on the idea of a debt jubilee. I would love to see that. 

I see prices staying at these levels as more and more people just lose the ability to afford them. Look at crude. I see people driving less. Carpooling. buying more efficient cars etc. etc....yet crude is still around $105 and looks to be breaking out.

this sucks. it's become about trying to stay afloat just longer than everyone else around you, and your reward is to watch everone else fall apart. and that is if you are lucky. 

Mon, 05/20/2013 - 22:38 | 3582825 Cursive
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Maybe I'm wrong about it being unsustainable.  Maybe a global police state can keep a lid on any insurrection.  Regardless, I'm a simple man who doesn't need most material trappings.  These fat cats can have their fill.  I have a good family, marketable skills and peace of mind.  I will try to hold it together as long as I can and keep resisting this financial repression.

Mon, 05/20/2013 - 23:41 | 3582984 Crisismode
Crisismode's picture



Well, we've been waiting for collapse for about 5 years now.


We're still waiting . . . . .


and waiting  . . . .


and waiting . . . . .


How F*cking long can they keep juggling these balls in the air???



Tue, 05/21/2013 - 07:24 | 3583258 Rodders75
Rodders75's picture

Yeah and how long can Tyler and all you chumps on Zerohedge carry on being wrong? As DB said in a recent note "Macro data surprises in Europe and EM are at negative extremes from where they typically revert while those in Japan have already bounced." Thank God none of you is managing my money.

Tue, 05/21/2013 - 07:30 | 3583365 Mentaliusanything
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Zero hedge has been " Grounded" since this flight locked claws.

Its called being the driver who can see an accident happening 5 Cars in front, we brake knowing that bad shit is about to hit the fan. Other drivers drive on listening to the radio/ I pod, chatting away. We see the concertina of metal against metal as more and more pile in on one another as Lemmings going over a cliff.

Drive safe ...... 

Tue, 05/21/2013 - 11:32 | 3584142 Diogenes
Diogenes's picture

I've kept out of stocks through the whole rally from March 2009 thanks to Zero Hedge. I'm not saying the information here is not accurate. What I am saying is that it doesn't tell the whole story, and evidently the part we are ignoring is more important than what we are looking at.

Tue, 05/21/2013 - 10:09 | 3583778 Imminent Crucible
Imminent Crucible's picture

"commodities have collapsed"

Not really. The S&P GSCI commodity spot index is at 633, right where it was in December of 2010. All it's done is chop sideways since then.   (chart weekly view)

Mon, 05/20/2013 - 23:00 | 3582888 sablya
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There is a ridiculous amount of liquidity in the system.  An unbelievable deluge just sitting there.  Right now, with interest rates so low, there's no reason for money to flow, but when interest rates start to climb, the velocity will start to rise and we will surely experience the worst hyperinflation ever experienced in the history of the world.  I don't think anyone will want to say, "I told you so" or there will be any glee in it for anyone at all.  There will be blood in the streets more likely.

Tue, 05/21/2013 - 10:56 | 3584000 Saro
Saro's picture

You can bet there will be some I-Told-You-So's coming out of my mouth to some select people . . .

Tue, 05/21/2013 - 08:47 | 3583504 IamtheREALmario
IamtheREALmario's picture

Maybe you should look over a longer timeframe ... say back 10, 20 or 30 years when all hope of fiscal constraint was thrown out under Reagan.... and then compare prices to the PUBLISHED inflation numbers. Now tell us what the larger trends have been.

Only suckers look at the most recent history because that is where the manipulation is most evidence and numbers can be least trusted.

Tue, 05/21/2013 - 10:14 | 3583799 Imminent Crucible
Imminent Crucible's picture

"when all hope of fiscal constraint was thrown out under Reagan"

Go back even farther: All pretense of fiscal constraint was thrown out by Lyndon Baines Johnson, Escalator of Vietnam, Author of the Warfare/Welfare state in its modern form, and probably the President who sold our gold reserves as well.

Tue, 05/21/2013 - 07:18 | 3583347 Mentaliusanything
Mentaliusanything's picture

They were smart birds, till they found Earth

Mon, 05/20/2013 - 21:19 | 3582581 knukles
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At least this time there're Earnings ... remember the dotcom era when multiples were off projected burn rates?


Mon, 05/20/2013 - 21:29 | 3582592 Dr. Engali
Dr. Engali's picture

At least the dot com days had some good stories. All we have today is ctl-p .......ctl-p........ctl-p.......

Mon, 05/20/2013 - 21:21 | 3582583 Dr. Engali
Dr. Engali's picture

What are these earning you speak of and what do they have to do with markets? The only thing that matters is to not be long on the four non-Pomo days this month.

Mon, 05/20/2013 - 21:32 | 3582621 fonzannoon
fonzannoon's picture

Doc and Knukles here is some perspective and levity on a boring Monday night....

So I consider many of you guys on here my friends, despite never having met any of you. I am out with one of my best friends a few weeks ago. Good guy. Like a brother to me. But he does not want to hear my shit. In his own way he checked out. His thing is soda machines. Antique soda machines. He just takes whatever discretionary money he has and buys them, from all over the country. It's just his way of diverting his attention from this fked up world.

Anyway I tell him about ZH. I tell him I have made friends with people all over the world. I tell him how I have more in common with you guys etc. etc. etc.

He tells me he goes on some soda machines website and has made friends with a whole group of people. Even better, when he buys an antique soda machine in wisconsin or something, a guy in wisconsin picks it up, drives it to a guy in Pennsylvania, who drives it to Jersey and my friend drives to Jersey to get it from that guy.

I sit back, astonished. These guys who don't know each other from a hole in the wall are driving all over the country delivering these things to each other. Crazy eh?

Mon, 05/20/2013 - 21:42 | 3582652 nmewn
nmewn's picture

Yeah...but what we deliver is free ;-)

Mon, 05/20/2013 - 21:47 | 3582666 fonzannoon
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you deliver a free education that is for sure. It's priceless.

Mon, 05/20/2013 - 22:07 | 3582733 nmewn
nmewn's picture

We always get what we pay for around here ;-)

Seriously though, you're interactions with kito & ehm are always read by me...but I don't swing that way no more daily...more about preservation of & risk of, than anything else.

But in all honesty, I have been known to do a scalp now & then with the 401k...thats about it...its really a time burner to be so connected to every gyration.

For me.

Mon, 05/20/2013 - 22:19 | 3582775 fonzannoon
fonzannoon's picture

my favorite days on this site were the days I had 60 red arrows while you and crockett calmly walked me along to reality. and that is not a dig at LTER who i have come to respect a lot as well. It's the discourse that is priceless. The dialogue with the humor combined caused an addiction. I hope something gives soon because it just seems so stale lately.

Mon, 05/20/2013 - 22:06 | 3582734 Dr. Engali
Dr. Engali's picture

That's the beauty of the net isn't it? I can make friends with somebody halfway around the country who would otherwise never have met. It's pretty cool to be engaging in conversations with people all over the globe about topics that both interest and have the potential to impact us all.

Mon, 05/20/2013 - 21:22 | 3582590 Seasmoke
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Mon, 05/20/2013 - 21:25 | 3582598 auntiesocial
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there is some douche on youtube calling zh zero brains... what an awesome handle! 

Tue, 05/21/2013 - 09:44 | 3583686 pmbug
pmbug's picture

Sounds zombie proof.

Mon, 05/20/2013 - 21:30 | 3582616 Atomizer
Atomizer's picture

Just loan us a 0% Central planning 100 year interest free FED Charter banking note offering: we can rule the modern world. Those fuckstick Primary Dealers Muppets won't realize that we skim off inside profits too.


Mon, 05/20/2013 - 21:35 | 3582628 nmewn
nmewn's picture

I've got a great story about PCP...but I think I'll refrain from telling it until reality catches up with perception ;-)

Mon, 05/20/2013 - 21:39 | 3582639 SpeakerFTD
SpeakerFTD's picture

I'll echo the WTF on the S&P, but I don't know about that scaling on the left axis.   Makes a 1% drop in earnings forecasts look overly dramatic.   

Tue, 05/21/2013 - 01:39 | 3583134 dunce
dunce's picture

I guess the point is that the spx rise is a function of QE rather than earnings.

Tue, 05/21/2013 - 10:03 | 3583748 mickeyman
mickeyman's picture

Pretend it's level then. There's still quite a divergence.

Mon, 05/20/2013 - 21:39 | 3582641 maskone909
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Gay dating banner alert zh wtf

Mon, 05/20/2013 - 21:42 | 3582650 balz
balz's picture

Its Google. It uses your recent browsing history to make suggestions to you.

Mon, 05/20/2013 - 21:56 | 3582704 SpeakerFTD
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You make one typo while googling giant rocks and all of sudden every banner ad has a moustached fellow

Mon, 05/20/2013 - 23:53 | 3583006 Crisismode
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Just get Ad-Blocker


End of story.

Tue, 05/21/2013 - 09:03 | 3583565 moonman
moonman's picture

You made coffee shoot out of my nose.

Mon, 05/20/2013 - 21:45 | 3582660 nmewn
nmewn's picture

Another soul saved from making a fool of himself ;-)

Mon, 05/20/2013 - 23:26 | 3582943 TheFourthStooge-ing
TheFourthStooge-ing's picture


Mon, 05/20/2013 - 23:28 | 3582950 TheFourthStooge-ing
TheFourthStooge-ing's picture

maskone909 said:

Gay dating banner alert zh wtf

+1 for unintentional hilarity.

Mon, 05/20/2013 - 21:49 | 3582677 q99x2
q99x2's picture

Them's numbers are the result of FRAUD. Why is anyone even interested in this any longer. I understand people need justification for getting paid at their jobs. But it would better to bribe FED members and lay off the analysts.

Mon, 05/20/2013 - 22:11 | 3582746 Caviar Emptor
Caviar Emptor's picture

It is the duty of every patriot to believe that what is good for the stock market is good for the country -Maestro

Mon, 05/20/2013 - 22:15 | 3582764 CDNX fan
CDNX fan's picture

Earnings Shmearnings...CB liquidity injections and the hyperinflation that is coming are being hedged through ownership of dividend-paying common shares - as in - one can NEVER underestimate the replacement power of equities within an inflationary spiral. Period end. They thought monetary metals were "THE HEDGE" but Bennie and Co. changed the rules. Now the stackers are all boinked and the CNBS-ers are coining huge dough. C'est la vie.

Mon, 05/20/2013 - 22:52 | 3582874 sablya
sablya's picture

Just when you think you've got "the rules" figured out, the rules will be changed.  Those who have been patiently suffering, stacking and/or accumulating miners, will be handsomely rewarded and those who think they've discovered the easy path to riches in the stock market will be the ones "boinked" (as you so eloquently put it).

Mon, 05/20/2013 - 22:16 | 3582767 tornado_watch
tornado_watch's picture

Q1 also enjoyed a full years worth of R&D tax credits that completely saved tech / energy / pharma earnings... with the Jan passage of the tax bill, these cos realized 5 quarters of R&D related tax get backs in Q1. It's good to be king.

Mon, 05/20/2013 - 23:16 | 3582922 besnook
besnook's picture

those charts show the incredible brilliance of bernank and the fed. they have managed to create a fantasy world surrounded by reality so as to confuse the most erudite of reality based prognosticators to question the reality they live in. the closest thing to this experience is lsd. is it real or is it fantasy. it is as real as you can experience but as fantastic as anything you have ever experienced....and you thought you were experienced but....are you experienced. jimi may help

Mon, 05/20/2013 - 23:48 | 3582981 sitenine
sitenine's picture

So, Ben, when do think we'll reach escape velocity?

Tue, 05/21/2013 - 07:27 | 3583361 Downtoolong
Downtoolong's picture

Pay no attention to that Income Statement behind the curtain, or the Balance Sheet either.

It's all great until TOTO (The One That Observes) gets frisky and makes suckers out of everyone.

Tue, 05/21/2013 - 08:25 | 3583426 waterdude
waterdude's picture

First chart is text book ZH data mining - the declinine in expectations for fy13 eps is less than 1%, which is basically statistically meaningless. Maybe another way to look at is since avg for 2009, SPX up 63% & eps for '14eps estimate up 75%.  Unless you're in the tin hat brigade, that is. 

Tue, 05/21/2013 - 08:55 | 3583524 Toolshed
Toolshed's picture

Please present your substantiating data and identify your paymaster. Thank-you.

Looks like troll infiltration.

Tue, 05/21/2013 - 09:11 | 3583593 Shizzmoney
Shizzmoney's picture

There's this thing about cannibalism: you eventually run out of other people to eat.

Tue, 05/21/2013 - 10:00 | 3583732 mickeyman
mickeyman's picture

Stock buybacks are just another way for management to loot the shareholders.

Tue, 05/21/2013 - 10:58 | 3584013 NEOSERF
NEOSERF's picture

The Squid says buy...I stand with the Squid...another two years of POMO and I can retire...

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