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Blackrock Stunner: S&P 500 Profits Are 86% Higher Than They Would Be Without Accounting Fudges

Tyler Durden's picture




 

We have previously observed that while pundits are happy to focus on non-GAAP earnings which over the past several years have become a total farce, the reality is that GAAP EPS for the S&P in 2014 will be 1.3% lower than a year ago, and that as a result of crashing energy company profits, 2015 GAAP EPS will be lower still, meaning that contrary to the propaganda, the US will see two consecutive years of declining wage growth. That said, not even we expected to read the following shocker revealing just how naked the corporate profitability emperor truly is, and coming from the world's largest asset manager on top of everything.

Presenting the stunning punchline from Blackrock's 2015 Investment Outlook:

Corporate earnings are a key risk. Analysts predict double-digit growth in 2015, yet such high expectations will be tough to meet. Companies have picked the low-hanging fruit by slashing costs since the financial crisis. How do you generate 10% earnings-per-share growth when nominal GDP growth is just 4%?

 

It becomes tempting to take on too much leverage, use financial wizardry to reward shareholders or even stretch accounting principles. S&P 500 profits are 86% higher than they would be if accounting standards of the national accounts were used, Pelham Smithers Associates notes. And the gap between the two measures is widening, the research firm finds.

So assuming 126 non-GAAP, accounting-levitated 2015 S&P consensus EPS, this means the real EPS is... 67? Which in turn means that the real forward P/E as of this moment is over 30x!

Then again, judging by the buying frenzy being unleashed in the S&P, it is time to BTFATH with both hands and on margin, because as long as nobody admits the truth, one must buy, buy, buy.

 

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Fri, 12/26/2014 - 11:13 | 5592975 Headbanger
Headbanger's picture

BLASPHEMY!

Or translation:  "SEEEE YA!!!"

Fri, 12/26/2014 - 11:14 | 5592993 BaBaBouy
BaBaBouy's picture

A Keynesian Dollar, In The Right Hands, Is Worth $1.86 ... Really!

Fri, 12/26/2014 - 11:17 | 5593011 Bindar Dundat
Bindar Dundat's picture

And we are surprised...Why?

Fri, 12/26/2014 - 12:06 | 5593226 OceanX
OceanX's picture

"And we are surprised...Why?"

Because some thought they were 2 to 300% higher...

Fri, 12/26/2014 - 12:32 | 5593322 max2205
max2205's picture

Wall St lie about earnings?   Shocked!

 

We shocked and lied to some folks.....

Fri, 12/26/2014 - 12:40 | 5593355 logicalman
logicalman's picture

More proof that the law is applied asymmetrically.

If the average Joe tried it, he'd be enjoying striped sunlight in short order.

Fri, 12/26/2014 - 14:33 | 5593803 KnuckleDragger-X
KnuckleDragger-X's picture

Wall St doesn't lie, they merely state a different reality. Besides, GAAP is for the lower class proles....

Fri, 12/26/2014 - 12:04 | 5593218 Hal n back
Hal n back's picture

Blackstone needed to pay for a study to find that out?

Fri, 12/26/2014 - 12:53 | 5593426 PT
PT's picture

They paid their accountants to do their own books, just like they always do.  But then they released the results and called it a "study".  So, yes.

Fri, 12/26/2014 - 14:35 | 5593812 KnuckleDragger-X
KnuckleDragger-X's picture

There are two numbers, the ones they tell the IRS and the ones they tell to the sheep.....

Fri, 12/26/2014 - 13:09 | 5593465 Hal n back
Hal n back's picture

So let me get this straight: Blackrock manages money in a lot of mutual funds for the public. Fior 5 years they say nothing about the market being overvalued--but for some reason today they say it--now-the markets did not just get overvalued today using buybacks and non gaap. How about bank mark to fantasy accounting and the Volcker rule?

 

So they have been happily collecting their fees while knowing the marekts were overvlaued just like all managers of these funds.

 

Now lets pontificate on how much of the MSM picks up on this little thing thats been discussed here for 6 years.

This market has to adjust down to several issues: 1) buyback BS, 2) Non Gaap BS, 3) high pe when no growth,

 

I think tyler posted about the san fran fed releasing a research paper saying the pe comes down 50% due to boomers leaving the stock market. What happens when the boomers stop spending for 2 reasons at least--first as we get older we just do not need stiff and second, most are financially unprepared for retirement and are working longer--when the market crpas they will have less to spoend--then soc sec and medicare and state  and federal   and private pensions are in trouble,.  so good bye to that source of funds for spending.

Nope--the fed will keep buying futures on SPX and Treasuries. If nothing else just for fun to see how far it can push this.

Fri, 12/26/2014 - 14:12 | 5593725 sun tzu
sun tzu's picture

S&P PE reached 45 before the dotcom bubble burst. Let's see how high it goes before the QE bubble pops. This rally is running on fumes, but the market can stay irrational longer than anyone can stay solvent

Fri, 12/26/2014 - 14:39 | 5593825 KnuckleDragger-X
KnuckleDragger-X's picture

Magic money is...well....magical. 80% of all trades are computer derived and sooner or later Skynet will declare war....

Fri, 12/26/2014 - 11:30 | 5592982 SoilMyselfRotten
SoilMyselfRotten's picture

Gonna take one helluva trick to make their numbers next year

 

P.S. CNBC just made their commodity calls for 2015. Drumroll, gold to flirt with $1000. TIME TO BUY!

Fri, 12/26/2014 - 14:14 | 5593729 sun tzu
sun tzu's picture

They'll all lower their tax estimated tax rates to zero

Fri, 12/26/2014 - 14:12 | 5593730 sun tzu
sun tzu's picture

They'll all lower their tax estimated tax rates to zero

Fri, 12/26/2014 - 11:12 | 5592987 spinone
spinone's picture

The entire "recovery" is built on manipulation and fraud.  But you also missed out on some big returns if you let that keep you out of the market.

Would you pick up $1000 bills in front of a steamroller?

Fri, 12/26/2014 - 12:54 | 5593434 PT
PT's picture

But for the last 15 years that steamroller hasn't run anyone over.  I'm not sure.

Fri, 12/26/2014 - 14:15 | 5593732 sun tzu
sun tzu's picture

Plenty of people have been run over. Those who were over-leveraged and not protected by the Fed. Case in point Lehman and Bear Stearns. 

Fri, 12/26/2014 - 11:15 | 5593001 RaceToTheBottom
RaceToTheBottom's picture

WS pretending that it was not of their doing?  Very Rich.....

Fri, 12/26/2014 - 11:17 | 5593004 JRobby
JRobby's picture

GAAP? FASB? More useless letters in a simple to understand scenario: TOO MUCH DEBT!!!!!!

Give the world economy a qualified audit opinion, namely: GOING CONCERN

Happy New Year!!

Peace, be healthy and happy.

Fri, 12/26/2014 - 13:56 | 5593656 actionjacksonbrownie
actionjacksonbrownie's picture

The only letters that metter:

 

 

FED   .GOV    BTFD!!!

Fri, 12/26/2014 - 11:18 | 5593007 fuu
fuu's picture

Hoocoodanode?

Fri, 12/26/2014 - 11:24 | 5593031 wmbz
wmbz's picture

Most likely an understatement.

In the world of make beleive, numbers are always what you want them to be!

Nobody cares or calls you out on blatent lies what does it matter!

We need MOAR! It is never enough.

Fri, 12/26/2014 - 13:00 | 5593444 PT
PT's picture

Using Blackrock standards, profits are 86% higher.  Using honest accounting standards, profits are , ummm, what % turns a negative into a positive?

Using honest accounting standards, profits CYNK quite rapidly.

Fri, 12/26/2014 - 11:23 | 5593034 BeerMe
BeerMe's picture

Accounting is for liars and always has been.

Fri, 12/26/2014 - 11:40 | 5593104 thepigman
thepigman's picture

Pelham Smithers must be wrong!!!! Otherwise equity buyers are being defrauded. lol

Kevin Henry loves stocks at this level.

Fri, 12/26/2014 - 11:24 | 5593035 JustObserving
JustObserving's picture

What is not fake about fiat economies?  From conjured currencies to artificially induced zero or negative interest rates to manipulation of all commodities including oil and gold and silver. It is just a magic show but all shows end and reality asserts itself

Fri, 12/26/2014 - 11:25 | 5593044 Colonel Klink
Colonel Klink's picture

Blackcock, another scumbag financial corporation just like Gollum ballSacks.

Raping, pillaging, and murdering the world daily.

Fri, 12/26/2014 - 11:26 | 5593046 matt1021_98
matt1021_98's picture

ZH - give us ACTIONABLE info in 2015! I can make 100x more money listening to dumb dumb Jim Cramer. Where is the top? Why? When are all the fed miracles priced in? Where did you get it wrong in 2014, 2013...? What has changed? Think timing and think profits - that's all that matters. Regurgitating the gloom boom and doom report doesn't provide much value unless you stick your neck out with actionable recos. Happy holidays

Fri, 12/26/2014 - 11:29 | 5593063 Colonel Klink
Colonel Klink's picture

Hard to give actionable information on feral Federal Reserve manipulation unless you're on the inside, like any robbery job.  Where they got it wrong in 201? is failing to realize the unlimited amounts the Fed can pump into the market and the unlimited ignorance of the world.

Fri, 12/26/2014 - 13:02 | 5593448 PT
PT's picture

Which company subcontracts to the NSA to provide the taps on Jamie Dimon's telephones?

Fri, 12/26/2014 - 13:15 | 5593497 Colonel Klink
Colonel Klink's picture

Here in 'Murika, Jamie Diamond taps the NSA.

Fri, 12/26/2014 - 13:54 | 5593640 PT
PT's picture

Damn!  I was worried someone would say that.  But surely there's some other rich psychopath needy enough and powerful enough to do the deed.  All he has to do is put in a cheap quote while paying his people well ...

http://dilbert.com/strips/comic/1997-12-15/

Fri, 12/26/2014 - 11:30 | 5593072 Duc888
Duc888's picture

 

 

Matt, just buy stawks.

Fri, 12/26/2014 - 11:32 | 5593076 Wahooo
Wahooo's picture

There is no top.

Fri, 12/26/2014 - 18:08 | 5594398 Freedumb
Freedumb's picture

I'd put the top at about S&P 300000, because at about that level we've made the full transition to the Weimar Republic

Fri, 12/26/2014 - 11:45 | 5593134 jcaz
jcaz's picture

Ah, so you want someone to hold your hand and tell you when to buy and sell...  Call mommy.

The mere fact that you made your request precludes your ability to understand even the most elementary response,  but lemme give it a shot-

This ain't Moneyline,  douchebag-  Tyler has NEVER told you to buy or sell shit, and if you think he has,  you live in your own Jim-Cramer-masturbatory fantasy world...

The fact is, if you even had a working clue about trading,  you'd benefit from Tyler's work-  his data has been spot-on, and well above any other source of info, and guess how much you've paid for it?   DUH!!!!

In short- go back to Yahoo chatboards and fuck off while the adults do business here.

Fri, 12/26/2014 - 11:48 | 5593151 Government need...
Government needs you to pay taxes's picture

Fade the Golden Sacks equity research department, with a lag of 2 tradiing days. 

Fri, 12/26/2014 - 11:58 | 5593190 Emergency Ward
Emergency Ward's picture

Here: When the DOW hits 99,000, get out!  Only the over-optimistic will wait for 100,000 (that won't happen until 2016).

Disclosure: I am completely unqualified to give financial advice.

Fri, 12/26/2014 - 12:02 | 5593207 The Most Intere...
The Most Interesting Frog in the World's picture

I don't know the exact number, but something on the order of 90+% of hedge funds have underperformed the S&P 500 index in the last two years.  And the vast majority of active managers, same thing.  But, this is exactly what happened in late '90's/early 2000 and 2007.  Amybody that has done their homework, frankly, has underperformed.  

The Fed has to be shitting their pants at this point.  I do not believe they are coordinating with Japan, China and Europe as some have suggested.  I believe we have an all out currency war.  The US dollar is strengthening and given China's recent action, which was in reaction to Japan, which was in reaction to US policy, and if Germany caves, Europe will be in full blown currency deval to offset what China, Japan and the US have already done.  It is circular and self-defeating.  

The only question at this point is, will the Fed re-start QE early in 2015? This whole notion of raising interest rates while the rest of the world is going full retard ZIRP, NIRP, QE and Kamakzi Keynesianism is an absolute joke.

Fri, 12/26/2014 - 13:12 | 5593486 PT
PT's picture

matt1021_98 :

I, too, am too ignorant, too far from the action, to work it out.  For us, the answer ain't here.  This merry-go-round don't stop so the noobs can get on.  You gotta take a running jump and hope you make it.  Or find a slower merry-go-round.

I suggest that EVERYONE become a politician open to "campaign donations".  That way TPTB will have to pay off EVERYONE in order to get anything done.  (and even that idea is flawed)

Fri, 12/26/2014 - 13:36 | 5593563 moneybots
moneybots's picture

"Regurgitating the gloom boom and doom report doesn't provide much value unless you stick your neck out with actionable recos."

"ZH - give us ACTIONABLE info in 2015!"

 

They did.  BTFATH, BTFD.  That line never get old.

Fri, 12/26/2014 - 13:50 | 5593625 shovelhead
shovelhead's picture

You just got it.

These values are complete fiction and have been for 6 years, so buy buy buy because there' no shortage of greater fools...

For the moment.

And you're smart enough to know when the tide goes out, right?

So buy buy buy.

What more do you need?

Fri, 12/26/2014 - 11:29 | 5593060 buzzsaw99
buzzsaw99's picture

who cares? it's a policy tool not a market.

Fri, 12/26/2014 - 11:35 | 5593081 Temerity Trader
Temerity Trader's picture

<”…Corporate earnings are a key risk. Analysts predict double-digit growth in 2015, yet such high expectations will be tough to meet. Companies have picked the low-hanging fruit by slashing costs since the financial crisis. How do you generate 10% earnings-per-share growth when nominal GDP growth is just 4%?..”>  That is such ‘Old Normal’ thinking.  Hmmm, massive buybacks with cheap Fed $?  More layoffs of higher  paid U.S. employees?  Sell off real estate holdings for big profits then lease the facilities back? Loan your customers money a very low rates to buy your products ? Just to name a few.

Nothing new under the sun, and so far very effective with the central banks easy money policies firmly in place. Why will it end? It works well so far. Laid off workers are happier, they watch T.V, get EBT cards and many government programs to pay the bills. Far better than the 9-5 grinding work routine.

If limitless debt is now possible with almost no inflation, this can go on for many years.  M&A, downsizing, synergies gained, lots of smoke and mirrors yet to come. The U.S. shows 5% GDP “growth”  most of the rest of the world far less.  Investors all over the world are pouring into the U.S. markets.  How many times have bears been certain it is all unsustainable?  Look around you, see all those brand new cars and SUVs everywhere?  Duh!  Nothing down, near-zero rates loans for 7-8 years.  Loose home loans again, hell, still haven’t fully tapped the refi, cash-out granite countertop market again.  Student loan forgiveness?  1T $ freed up for more consumption! They can make this go on for a very long time before it all comes apart. 

 

Fri, 12/26/2014 - 13:28 | 5593537 JimS
JimS's picture

Trader: I agree with you 100%, well spoken. This financial fiasco will continue on it's present course, unabated, at its current rate of "growth" (probably at ever increasing rates), until it doesn't. It will stop on a "fucking dime", reverse course, and deline at a lightening rate. When that happens, all hell breaks loose. Plan for the absolute worst you can imagine, and "hope" for the "best".

Fri, 12/26/2014 - 11:34 | 5593083 ebworthen
ebworthen's picture

With Wall Street and the Corporatocracy flush with free money from .gov and the FED is it any wonder?

"...stretch accounting principles..." and every other principle, moral, and ethic.

Financialization bubble 2.0 getting quite turgid.

Fri, 12/26/2014 - 11:38 | 5593084 ZeroPoint
ZeroPoint's picture

And on the reverse side of the coin - Silver is trading almost 10 dollars below the mining cost. Paper profits on paper assets and real losses on real assets. You are now entering the twilight zone....

Fri, 12/26/2014 - 11:36 | 5593085 Soul Glow
Soul Glow's picture

Arthur Anderson lives!

Fri, 12/26/2014 - 11:51 | 5593152 22winmag
22winmag's picture

You said it.

 

The rating agencies and big accounting firms sole mission is to apply wallpaper over this rotten financial house of cards.

Fri, 12/26/2014 - 12:02 | 5593211 Rainman
Rainman's picture

True ...Big 4 accounting firms pocket $50 billion in fees ... er, payoffs  ... er, kickbacks ....  per year ... !

Fri, 12/26/2014 - 11:38 | 5593094 lester1
lester1's picture

It should be the law that when you report earning it must be by GAAP standards. This non gaap accounting anyone can make up. Tesla does this all the time to dupe investors and raise their share price.

Fri, 12/26/2014 - 12:28 | 5593110 Dubaibanker
Dubaibanker's picture

Due to the following reasons:

1. very high rate of stock buy backs

2. highest ever corporate profits

3. massive cost cutting (due to lower capex spending and high number of employee redundancies) thus perhaps enhancing productivity

4. zero interest rates and very low borrowing rates on bonds

5. humungous cash on balance sheets

6. lowest ever global expansion by US/UK/EU/Japanese corporations (into Russia, China, Middle East etc) and withdrawals and closures from around the world like Citibank from Japan and Spain, Clorox from Venezuela, Australian banks from UK, Nokia from India, RBS/ABN AMRO/Barclays/Lloyds from Middle East and Asia, Toyota from Australia, Pepsi from Greece, Morgan Stanley and Standard Chartered from Switzerland, Best Buy and Cooper tires from China etc) -  #deglobalization?!....do I see a trend here where G7 owned corporations are not only withdrawing from most overseas countries (and not expanding anymore) or they are being bought by the Chinese (JPM HQ, Volvo, Peugeot, IBM, AMC, Heathrow, Motorola, Italian top companies with small stakes, Nexen, Waldorf Astoria NY....)

7. For every asset being sold by the US/UK/EU to Chinese, the balance sheet remains the same, in fact, new money flows in to the balance sheet, only the owners change, which springs new life into the balance sheet and the business plus it opens door into the Chinese markets which is a net positive for us small share holders.

.... there is almost no major reason why stock prices (of large and mid caps except in the energy sector) will decline.

Even if oil plummets to USD 20-30 levels, which IMHO it should, latest in the next 6 months, all countries/companies/central banks in the Rest of the World are so insulated from the G-7 central bank clowns running their own countries into the ground based purely on debt expansion at the Govt levels (not as much at the corporate levels due to reasons mentioned above) that the implosion (and downgrade/lack of foreign buyers into G-7 sovereign bonds/eventual uncontrollable rise in interest rates like Venezuela/Russia/Ukraine/Pakistan in the United States of America/UK... etc) of Govts will happen separate and apart from the implosion of debt laden banks exclusively in the G-7 countries.

The rest of the world which is more than 90% of the population and about half the global GDP and rising will love to hear the implosion so that the Chinese can buy the rest of the assets in G-7 for pennies on the dollar!

China is estimated to invest USD 50bn PER ANNUM by 2020 just in the overseas property sector by Savils in a report released Dec 26, 2014. Some of their other major acquisitions, too, are mentioned here. In 2013, China invested USD 13.5bn overseas which was double that of 2012 in the overseas real estate sector. This fascinating report covers a lot of ground on the rapidly rising outbound Chiense invetsments as well as the strength of their banks, oil companies, real estate developers, insurance companies etc (just like USA used to be in 1980's when they started displacing the Japanese from the top of the charts in ALL sectors, now it is time to eat crow for the American companies and gently handover the mantle to the Chinese else they will be forced to sell out to the Chinese eventually if they wont agree to the Chinese terms because no other country in the world has as much cash / growth / income /capacity as much as the Chinese! - whether you love it or hate it, it is a fact).

http://pdf.savills.asia/selected-international-research/chinese-investor...

Fri, 12/26/2014 - 13:22 | 5593509 ejmoosa
ejmoosa's picture

I wanted to quantify just how much corporate buybacks were affecting earnings per share.

Using the Dow 30, I constructed a spreadsheet and determined the followng:

On  a per share basis, the DOW 30 are on track to earn an average $4.10 per share.  Using the 2009 share count, that would be $3.75.

So if we were comparing apples to apples, more or less, then the DOW more or less would be about 1800 points lower.

What were the earnings going forward from 2009 to 2010?  The DOW profit growth rose 24.5% in 2010.

What's the current forecast for 2015? 4.3%.

You can decide for yourself if people are paying too much for future earnings.

I know what my conclusion is.

 

I update this spreadsheet weekly.  And things are not trending higher in the future, either.

 

Perhaps the S&P is somehow magically different, but I doubt it.

Fri, 12/26/2014 - 16:43 | 5594181 LooseLee
LooseLee's picture

I beg to diifer with your #5. This 'cash' is merely debt---which has to be paid back with interest, Kinda spoiled your illusion, eh?

Fri, 12/26/2014 - 17:31 | 5594300 Dubaibanker
Dubaibanker's picture

No, I am afraid not, my contention is not an illusion. If you believe it is an illusion, thats your choice.

When we pay to buy a hotel room or iPhone or computer or a shirt, it is THAT cash I am talking about. Most 'old' companies have no debt, they buy cheaper and sell to us at a margin, which is what a business is all about.

You are perhaps confusing with cash on balance sheet of banks, which is not what I meant.

Banks are a ponzi, especially in the US, especially after sub prime, NINJA, all sorts of price manipulation, ZIRP and bail outs!

Fri, 12/26/2014 - 11:44 | 5593130 Government need...
Government needs you to pay taxes's picture

So if you adjust PE multiples upward by 86%, then you end up with S&P valuations that approach pre-2008 crash levels.  Situation normal . . . AFU.

Fri, 12/26/2014 - 11:50 | 5593159 nakki
nakki's picture

While I have no doubt in my mind that Arthur Andersen is running the accounting department for the entire world, why is BlackRock quoting Pelham Smithers Associates? A London firm that specializes in Asian technology mainly in Japan. In a world where non-gaap and mark-to-fantasy is the norm of course S&P earnings are make believe.

Fri, 12/26/2014 - 13:20 | 5593210 Colonel Klink
Colonel Klink's picture

I said it above: http://en.wikipedia.org/wiki/Shyster

EDIT:  Interesting my comment above was deleted.  Guess this place is no longer fight club, but censorship club.  Beware those you're no longer able to question.

Fri, 12/26/2014 - 14:07 | 5593701 actionjacksonbrownie
actionjacksonbrownie's picture

Shyster... sounds jewish

Fri, 12/26/2014 - 12:18 | 5593277 holdbuysell
holdbuysell's picture

How does this compare to the earnings multiple at its height circa 2000? Were those multiples GAAP or non-GAAP? Would be interesting to know, as if they were indeed GAAP back then, then this would be considered the most-expensive market of all time.

Fri, 12/26/2014 - 14:05 | 5593692 ejmoosa
ejmoosa's picture

Annual corporate profit growth fell negative in the third quarter of 2008 and did not turn positive again until the first quarter of 2002.

It's my theory that the economy stayed afloat until the "official" start of the recession in the third quarter of 2001 because of the spending by all businesses across the board for the Y2K challenge.  The spending had to occur regardless of the economic environment for fear of systems shutting down.  

If I remember correctly, the FED also flooed the system with liquidity just in case there were issues with system shutdowns.

So as the markets went higher, and the earnings declined, P?E's of course went through the roof.

Those same corporate profits after taxes today have turned negative, and there is no sign of a reversal.  We'll need a recession first.  And we are on the cusp of one, if we aren not already there.

 

 

 

Fri, 12/26/2014 - 12:19 | 5593279 alexmark2013
alexmark2013's picture
Inquiring minds want to know. Does Santa Yellen really work for the little people? Or just for the naughty people on Wall Street? http://investmentwatchblog.com/inquiring-minds-want-to-know-does-santa-yellen-really-work-for-the-little-people-or-just-for-the-naughty-people-on-wall-street/
Fri, 12/26/2014 - 12:26 | 5593302 I Write Code
I Write Code's picture

Um, how did we get from EPS to wages?

Fri, 12/26/2014 - 12:31 | 5593316 Mike Honcho
Mike Honcho's picture

I still shudder when thinking of how hard DOJ came down on the big accounting firms after the crash.  They year zero'ed those cronies and showed no mercy.  Then with the same fervor took on the rating agencies with a pow! and a wham! and a....can't keep going, what a friggin joke.

Fri, 12/26/2014 - 12:31 | 5593320 razorthin
razorthin's picture

That makes the real value of the S&P 864.   That's about right.

Fri, 12/26/2014 - 16:39 | 5593698 El Hosel
El Hosel's picture

Yep,  July 2009 there was a little breakout area started at SPY 87.59... That is about the time and place the The FED completly took over "The Markets" and they went all green all the time.

Fri, 12/26/2014 - 12:48 | 5593401 Ewtman
Ewtman's picture

The S&P and the DOW share something in common... they are both huge bubbles in the early stages of bursting...

 

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

Fri, 12/26/2014 - 13:20 | 5593516 Ban KKiller
Ban KKiller's picture

2+2=5. Orwell said so.

Fri, 12/26/2014 - 14:00 | 5593673 El Hosel
El Hosel's picture

You have to be stoned or stupid to be stunned.

Fri, 12/26/2014 - 14:02 | 5593674 q99x2
q99x2's picture

I said years ago that once fraud became legal corporations could simply make up whatever numbers they wish to unless a larger more powerful corporation could pressure the government to attack competitors for crimes.

Its over buy guns gold, and canned food.

Sat, 12/27/2014 - 14:36 | 5596662 Hal n back
Hal n back's picture

hard to quantitfy buybacks--first, money is throw into the market to buy back shares. That pushes prices up at least temporarily but if its done regularly like IBM temporary becomes normal.Then the eps are pushed up by the reciprocal of hte % shaers in float reduced.

 

if just teh eps I am thinking about 7% applied to the entiore market.

 

david stockman calculated earnng  are overstated by 30% for NON GAAP--thats probably about right. So Blackstone should be thinking 30-35% rather than 86% IMHO.

 

 

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