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First Oil, Now Earnings Revisions Scream Recession

Tyler Durden's picture




 

Two short weeks ago we warned of the looming 'profit recession' in the US on the heels of significant downward revisions from the Energy sector due to sustained low prices. While we assuredly will not do the 'told-you-so-dance' quite yet, perhaps all the professional hockey-stick extrapolators and 'smart money' should look away from the following three charts...

 

Downward Earnings Revisions are surging...

 

And so Forward-Earnings expectations are plunging. We are sure "it's different this time"... or just "transitory"...

 

 

And we suspect - if T. Boone Pickens timing is right - this will get much worse before it gets better...

 

But apart from that... BTFATH.

 

Charts: Bloomberg and @Not_Jim_Cramer

 

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Tue, 12/23/2014 - 19:36 | 5586561 stant
stant's picture

No one mentions copper. It says global depression

Tue, 12/23/2014 - 19:52 | 5586616 Id fight Gandhi
Id fight Gandhi's picture

8 1/2 year high in DX is notable too.

Tue, 12/23/2014 - 19:53 | 5586621 surf0766
surf0766's picture

NOT

Tue, 12/23/2014 - 20:03 | 5586648 Statetheist
Statetheist's picture

Sure man, aaaany day now.

Tue, 12/23/2014 - 21:03 | 5586810 NoVa
NoVa's picture

Copper is hurtng big time

 

Tue, 12/23/2014 - 21:34 | 5586879 cossack55
cossack55's picture

Not to mention the BDI is back under 800 again.

Tue, 12/23/2014 - 19:41 | 5586576 Carpenter1
Carpenter1's picture

At least something has finally gone down, we're not just looking at chart patterns. $56 oil is an event.

Tue, 12/23/2014 - 19:44 | 5586588 Keltner Channel Surf
Keltner Channel Surf's picture

After analyzing 6 billion pieces of data in, what else, an excel spreadsheet (the AK-47 of the poor), I may have uncovered the double-secret strategy used this quarter by the algos:

Churlishly, they’ve been playing a financial form of the children’s game duck, duck, goose, with shorts being repeatedly ‘goosed’, but thus far none have been unable to catch the picker, running about in circles, saying nothing but “duck, duck, duck …” (though, oddly, it sounds like “fuck, fuck, fuck …”).

Tue, 12/23/2014 - 21:43 | 5586900 Consuelo
Consuelo's picture

'Doug-doug-goose'...

https://www.youtube.com/watch?v=sxNxSzDFW6g

Still gets a chuckle...

Tue, 12/23/2014 - 19:48 | 5586608 Winston Churchill
Winston Churchill's picture

Just got to get those year end bonuses booked and then its devil take the hindmost.

Those exits, are open elevator shafts.

Tue, 12/23/2014 - 19:50 | 5586611 noben
noben's picture

Some are "Dreaming of a White Christmas".
Others are "Screaming of a Red Christmas". Deep in the red.

The "In debt" red, or "socialist" kind of Red.

Tue, 12/23/2014 - 19:54 | 5586619 Hawkey Schtick
Hawkey Schtick's picture

"We recessioned some folks.."

Tue, 12/23/2014 - 19:53 | 5586620 disabledvet
disabledvet's picture

"Suck on my chocolate balls baby....

Stick 'em in your mouth and suck'm and suck'm!!!!.....

Tue, 12/23/2014 - 19:55 | 5586625 rum_runner
rum_runner's picture

Um, bullish?  The US dollar is strengthening like crazy and we've stopped QE.  Quizno et salsa, the next QE round is gonna be even more exciting.  

Granma Yellen is not just Santa but the Easter bunny too.  Get your 20k hats ready kids, it's gonna be crazy with a K.

Tue, 12/23/2014 - 19:55 | 5586627 katchum
katchum's picture

You can't have a recession with 5% GDP growth.

Tue, 12/23/2014 - 21:05 | 5586814 NoVa
NoVa's picture

yes you can when all the "growth" is centralized into healthcare assumptions.  

 

Tue, 12/23/2014 - 20:17 | 5586685 f16hoser
f16hoser's picture

NBC Nightly News just said the Econnomy and Stock Market are ROARING and doing well! Crap, I don't know who to believe...

Tue, 12/23/2014 - 20:21 | 5586698 TheRideNeverEnds
TheRideNeverEnds's picture

Lets look at the facts

-domestic companies see record amounts of deliveries this christmas.

-unemployment under 6%

-oil is basically free

-inflation is low

-people and countries cant get enough of our debt

-our military controls the globe

-all major US indexes have been making new highs on a weekly if not daily basis

 

yup, times sure are tough....   

 

Face it, Krugman knows best, FED has it all figured out, Obama is the best leader in the history of the world and we will never again see a recession or world war on the scale of those previous experienced.   

Tue, 12/23/2014 - 20:35 | 5586737 Winston Churchill
Winston Churchill's picture

Where did you buy that shit,and what did it cost  ?

Tue, 12/23/2014 - 21:08 | 5586821 Al Tinfoil
Al Tinfoil's picture

Its FREE on your TV!  All it costs is your mind, your soul, and $65 per month for cable fees.  And a couple $Trillion a year to run the government propaganda machine.  

Such a bargain.

Wed, 12/24/2014 - 06:05 | 5587586 One Eyed Jack
One Eyed Jack's picture

Face the fact that you are a fucking Kool-aid drinking moron:

-manipulated unemployment numbers actually near 20%
-oil is in a free fall from lack of demand due to the shitty economy.
-we are entering a deflationary spiral.
- other countries are uncoupling from the reserve petro dollar fantasy.
-the US military hasn't won a war since WWII and has been defeated in the field by untrained people armed with weapons from the korean war era and no sophisticated equipment more than a cellphone in two theaters of operation. The us military is also being told to leave from many of their bases overseas by their european "friends".
- the stock market is. Highly manipulated financial fuck fantasy.
- you are as is your heroes the queer Kenyan and the Keynesian retard fucking idiots.

Tue, 12/23/2014 - 20:45 | 5586732 Soul Glow
Soul Glow's picture

Obviously we are heading into the shit storm.  The question is, who was long oil going into its collapse?  

There will be your Bear Sterns.

And next summer whoever shorts gold and is long the dollar/US bonds?

Your Lehman.

Tue, 12/23/2014 - 20:37 | 5586741 Temerity Trader
Temerity Trader's picture

So, the quarterly “earnings” numbers start pouring in and they are lousy. A few weak hands bail and the shorts pile on. High P/E’s, low revs, weak balance sheets, owe billions of $$ thanks to stock buybacks using borrowed money.  Janet sits back and laughs. She tells her buyers to let the bears win a few days, let them get confident and build big positions.  Then she directs her public affairs person announce after market close how the Fed has plenty more tools and is prepared to do QE4 if conditions warrant.  She also has about $100 billion transferred overnight to the BOJ. The BOJ buys the S&P futures on this “good news”.  The Dow opens limit up and explodes 500 points a day; shorts get out the Vaseline again. The BOJ backs out of the position after a couple of days and splits the profits with the Fed. Win-win.  What part of this ‘New Normal’ is so hard for bears to understand?  Too big to fail.

Tue, 12/23/2014 - 20:44 | 5586760 First There Is ...
First There Is A Mountain's picture

Everything screams recession and yet 2015 will play out precisely like 2014 and the year before that. It's all about recessions/depressions until Old Yeller puts her foot back on the gas as our illusive recovery remains perpetually just out of reach. Yawn....

Wake me when we actually raise rates and stop jawboning the market higher on the slightest sign of weakness.

Tue, 12/23/2014 - 20:53 | 5586777 Al Tinfoil
Al Tinfoil's picture

But, But, Butt, the cheerleaders are still doing their routine, shaking their pom-poms and their booties - "The price of oil will rebound soon", and "The fall in gas prices puts more money in consumer's pockets to that will stimulate the economy".  "Invest now, while prices are down" (well, share prices are not down much...) and BTFD!

Since a lot (if not most) of the real job growth and industrial activity growth since 2009 was in the shale patches, and those shale patch jobs are going down a hole fast (pun intended), where do the cheerleaders expect the economic growth to come from?  Bankruptcy and M&A lawyers and vulture funds?  

The idea that decreased output will force price increases seems doubtful as well, at least in the short term, since many firms will have to keep producing as much as they can to keep some cash flow to keep the lights on.  Even as shale drilling shuts down, wells nearing completion will still get finished in an attempt to recover sunk costs (another pun, Please Forgive me for that, Lord).  As the world economy tanks, demand seems destined to sink further and exacerbate the supply glut. China has been developing its oil fields quickly, and some forecasters say China's demand for oil imports may well lessen.  Unless Abenomics miraculously stimulates Japan somehow, oil demand in Japan does not look likely to grow. Canada's economic policy is so heavily invested in the idea that the oil sands will be its economic engine for decades to come, that Canada is likely to jump through hoops to keep the oil sand producers alive, if not very healthy.  It may well be years before prices start to recover.

Hype, Borrow, Drill, Boom and Bust!  Repeat.....

 

Tue, 12/23/2014 - 20:54 | 5586781 Captain Chlamydia
Captain Chlamydia's picture

There are going to be a lot of ups and downs in the near future, is my prediction. S&P will fall and climb, same goes for oil, gold, etc. Until the Big Crash. That will only take another 10-15 years or so. 

The main reason we'll see this happen is WW III which is not fought by armies (yet) but by money (money is power, remember). Whether you call it Deep State or Mil-Ind Complex or NWO - doesn't matter. 

The ONLY thing that can stop this Apocalyps from happening is all of you. Stop paying tax and mortgage. Quit your army navy luftwaffe job. Quit sitting at a desk shuffling papers. Start an eco farm in your community. 

No, I did not inhale or drink. I'm not wearing my tinfoil suit. Yes I'm not from the US of A. I'm from a planet called 'If we're not going to do things different soon then we're fucked'. 

Tue, 12/23/2014 - 21:11 | 5586826 will ling
will ling's picture

"what charts larry" ?

Tue, 12/23/2014 - 21:47 | 5586906 holdbuysell
holdbuysell's picture

And GAAP YoY earnings growth is looking to come in at negative 1.4%. Is GAAP about to become the victim of revisions?

Notwithstanding,

Still waiting for the CNBS shills to say some whopper like: Home Depot? Oh, we no longer measure Home Depot by cash flow; we measure them by credit cards hacked as that provides a true picture of the number of people coming into the stores.

Tue, 12/23/2014 - 23:04 | 5587060 Amerikan Patriot
Amerikan Patriot's picture

I'm going to go out on a limb here and suggest that Russia's recession will be worse than America's.

Tue, 12/23/2014 - 23:20 | 5587104 clasutrum
clasutrum's picture

Plus that 5% US GDP read was down right scary. Nothing scares me more than when the biggest economy in the world is growing almost as much as China.

Tue, 12/23/2014 - 23:39 | 5587172 Ewtman
Ewtman's picture

Just reiterating the debt bubble...

 

http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...

 

of course OIL is headed into the abyss too...

http://www.globaldeflationnews.com/whats-really-happening-with-oilthe-la...

 

 

 

Wed, 12/24/2014 - 00:23 | 5587260 LiquidBrick
LiquidBrick's picture

Oil Is down for 1 simple reason:

The unholy alliance between Govts, Bankers and Oil producers are done canibalizing the middle class.

Now they are beginning to canibalize each other. 

Wed, 12/24/2014 - 11:54 | 5588409 Omega
Omega's picture

The economical situation now is unstable and people feel all this changes on their lives. And we should not expect some relief, because the taxes are planed to be increased in the next year. Also the interest rates will grow up from their low level. Now we have not solved the problems in the labor market. The companies are reducing people and relocating. More and more workers need the other source of funding to cover regular expenses. I think it is up to the government to pay attention and use instruments to normalize the economy.

Wed, 12/24/2014 - 14:50 | 5589128 PTR
PTR's picture

Unpossible.

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