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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 | Link to Comment Spitzer
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Furst bitches

Mon, 05/20/2013 - 21:18 | Link to Comment Thomas
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And when record profit margins contract...

Mon, 05/20/2013 - 22:52 | Link to Comment 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 | Link to Comment Rick Blaine
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Tue, 05/21/2013 - 07:15 | Link to Comment 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 | Link to Comment Freewheelin Franklin
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This ain't

Mon, 05/20/2013 - 21:41 | Link to Comment 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 | Link to Comment XenoFrog
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Recovery Summer rolls on!

Mon, 05/20/2013 - 21:35 | Link to Comment LetThemEatRand
LetThemEatRand's picture

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

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

Mon, 05/20/2013 - 21:18 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Crisismode
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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 | Link to Comment Rodders75
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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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Saro
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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 | Link to Comment IamtheREALmario
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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 | Link to Comment Imminent Crucible
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"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 | Link to Comment Mentaliusanything
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They were smart birds, till they found Earth

Mon, 05/20/2013 - 21:19 | Link to Comment 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 | Link to Comment Dr. Engali
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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 | Link to Comment Dr. Engali
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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 | Link to Comment fonzannoon
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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 | Link to Comment nmewn
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Yeah...but what we deliver is free ;-)

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

Mon, 05/20/2013 - 22:07 | Link to Comment nmewn
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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 | Link to Comment fonzannoon
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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 | Link to Comment Dr. Engali
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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 | Link to Comment Seasmoke
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Mon, 05/20/2013 - 21:25 | Link to Comment 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 | Link to Comment pmbug
pmbug's picture

Sounds zombie proof.

Mon, 05/20/2013 - 21:30 | Link to Comment Atomizer
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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 | Link to Comment 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 | Link to Comment SpeakerFTD
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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 | Link to Comment dunce
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I guess the point is that the spx rise is a function of QE rather than earnings.

Tue, 05/21/2013 - 10:03 | Link to Comment mickeyman
mickeyman's picture

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

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

Mon, 05/20/2013 - 21:42 | Link to Comment balz
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Its Google. It uses your recent browsing history to make suggestions to you.

Mon, 05/20/2013 - 21:56 | Link to Comment 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 | Link to Comment Crisismode
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Just get Ad-Blocker


End of story.

Tue, 05/21/2013 - 09:03 | Link to Comment moonman
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You made coffee shoot out of my nose.

Mon, 05/20/2013 - 21:45 | Link to Comment nmewn
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Another soul saved from making a fool of himself ;-)

Mon, 05/20/2013 - 23:26 | Link to Comment TheFourthStooge-ing
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Mon, 05/20/2013 - 23:28 | Link to Comment TheFourthStooge-ing
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maskone909 said:

Gay dating banner alert zh wtf

+1 for unintentional hilarity.

Mon, 05/20/2013 - 21:49 | Link to Comment q99x2
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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 | Link to Comment Caviar Emptor
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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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment sitenine
sitenine's picture

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

Tue, 05/21/2013 - 07:27 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Shizzmoney
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There's this thing about cannibalism: you eventually run out of other people to eat.

Tue, 05/21/2013 - 10:00 | Link to Comment mickeyman
mickeyman's picture

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

Tue, 05/21/2013 - 10:58 | Link to Comment 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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