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Charting The Un-BEAR-able Lightness Of Equity Analyst Credibility

Tyler Durden's picture




 

While Mario Draghi has done wonders to expose his total and utter lack of credibility - no matter how much spin is pushed at us - it seems that equity analysts still (somewhat remarkably) move markets and remain credible in the eyes of what we assume is an entirely cognitively dissonant self-perpetuating market-structure in need of 'excuses'. To wit, the following chart, from Strategas, which illustrates perfectly the herd-like upward-biased and constant shift in year after year of S&P 500 earnings expectations that quickly and inexorably smashes lower in the face of the reality of a crushed credit cycle and 'whocouldanode' recessions/stagnations. It seems we (as investors) and they (as shills analysts) will never learn - or maybe we all will this time (as it's never different!).

 

 

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Sat, 08/04/2012 - 18:40 | 2678617 fonzannoon
fonzannoon's picture

nope. never learn. onward and upward.

Sat, 08/04/2012 - 19:48 | 2678706 Precious
Precious's picture

Don't worry.  It will just be a short recession this time.

Sat, 08/04/2012 - 19:54 | 2678713 engineertheeconomy
engineertheeconomy's picture

"I did not have sexual relations with that girl"

Sat, 08/04/2012 - 20:22 | 2678745 vast-dom
vast-dom's picture

smoke a lot of (____) and eat even more of (____) and believe everything completely. there, i solved the sheeple's problems.

Sat, 08/04/2012 - 20:41 | 2678761 old naughty
old naughty's picture

the chart shows un-BEAR-able Likeness !

Never different. Lies, lies, lies...

Sun, 08/05/2012 - 10:34 | 2679317 Manthong
Manthong's picture

There are no equity analysts anymore,  there are only fake fiat flow confederates.

Sun, 08/05/2012 - 16:35 | 2680102 pavman
pavman's picture

My home town always opens a mall right before a recession.... in the 70s it was an indoor mall w/ a theme park, that closed in the 80s.  In the 80s it was an indoor mall attached to a Kmart w/ no real stores that I can remember.  That closed in the early 90s.

Around 2007 they opened a mega mall with all the huge names one would come to expect at a mall.  This one is outdoors.  To me, this is the key indicator we're in the greatest depression this country will ever see.

Sat, 08/04/2012 - 18:44 | 2678627 The Wizard of Oz
The Wizard of Oz's picture

BULLISH!

Sat, 08/04/2012 - 18:46 | 2678630 I am Jobe
I am Jobe's picture

Hope and Change spreading all around. Bullshit

Sat, 08/04/2012 - 18:48 | 2678631 fonzannoon
fonzannoon's picture

i notice everyone around me from age 18 to 25 are a bunch of clueless self entitled vagina's. this country is so fked. 

Sat, 08/04/2012 - 19:19 | 2678672 dmger14
dmger14's picture

Yep, happy to vote themseslves a bleak future.  Part of me will enjoy the collapse as it's well desrved!

Sat, 08/04/2012 - 19:35 | 2678688 Tippoo Sultan
Tippoo Sultan's picture

Eighteen to 25 ? You are too generous.

Expand that from first driver's license to age 72. When referring to contemporary, Post-Constitutional America, you must cast a much broader net.

Sat, 08/04/2012 - 19:55 | 2678715 fonzannoon
fonzannoon's picture

u are right but that group deserves a special nickname

Sat, 08/04/2012 - 20:06 | 2678730 I am Jobe
I am Jobe's picture

Give them FB and IPHONe and they are clueless zombies. Yeap sheeples of the next gen are in the making.

Sun, 08/05/2012 - 16:39 | 2680109 pavman
pavman's picture

When studies indicate Gen Y would rather have a choice over their cell phone rather than get paid more money.... let's face it, they're idiots.  I bet the whole generation ends up in management!

Sat, 08/04/2012 - 19:01 | 2678648 CustomersMan
CustomersMan's picture

Here's how it often works, from someone inside the business.

While I was working in the business (for over 3 decades) I had occasion to see two different research reports on the same company, dated within days of each other. And this was one of the better established and reputable brokerage firms.

 

One was for Institutional clients and it was telling them to Sell  stock of company A. It was closely guarded, but I still found it.

 

The second was for retail clients and it was telling them to Buy the stock of company A. Same Firm.

Reasons:

If you as a brokerage firm, deal with institutions like say Fidelity, there is NO WAY that you are going to tell the public to SELL a stock that one of your "Institutions" owns a shitload of,...before you first tell them. Otherwise they will take their considerable commission and other business elsewhere.

 

The other aspect is that if you tell them both to Sell, and you have an analyst that is credible, who are they going to Sell to?

 

They're doing God's work alright. Somebody is going to take it in the AZZ. And guess who that BE?

 

 

Sun, 08/05/2012 - 02:14 | 2678717 Precious
Precious's picture

You left out the part about where the rapacious dicks from the wealthy familes get connected securities business jobs so their industry buddies can feed them inside information which they use to personally fore-run the institutional and retail investors without even the courtesy of prior lubrication for such sadistic ass fucking.  In fact, they actually receive large fees from these masochistic clients in appreciation.  They do not object to the loud noises, either.  It feels better on the delivery point when it appears to hurt on the receiving end.  Highly satisfying and all the more interesting to discuss over a fine scotch among members at the club.

Sat, 08/04/2012 - 19:03 | 2678650 Silvertrader
Silvertrader's picture

People want to believe. As a trader i try to see reality and act on it. being fked as a herd is also reality.

Sat, 08/04/2012 - 19:06 | 2678654 Lednbrass
Lednbrass's picture

Can anyone tell at a glance if these numbers are adjusted for inflation? I'm having a tough time figuring that out for sure, and wonder if it would be entirely horizontal if so.

Sat, 08/04/2012 - 19:09 | 2678660 max2205
max2205's picture

We should be making higher annual highs.....right?!

Sat, 08/04/2012 - 19:10 | 2678661 fonzannoon
fonzannoon's picture

i say amazon is the elephant that takes this market down. apple actually makes money. amazon is the empror has no clothes moment.

Sat, 08/04/2012 - 19:26 | 2678678 Jay Gould Esq.
Jay Gould Esq.'s picture

Regarding AMZN specifically, its decline is inevitable -- but it will be a slow bleed, as more states institute internet commerce sales taxes. This trend, promulgated by revenue-strapped, public employee pension deficit-plagued states ( virtually all ), shall present a relentless assault upon an already razor-thin margin.

Sat, 08/04/2012 - 19:46 | 2678702 spine001
spine001's picture

The sad truth is that it's a lot worse in most other Countries. For instance in Argentina 99.999999% of the people have no clue

Sat, 08/04/2012 - 19:50 | 2678709 q99x2
q99x2's picture

I learned something once but can't remember what it was. I now prefer they Yoda method of knowing vs learning. Hate the ear hair that comes with it though.

Sat, 08/04/2012 - 21:01 | 2678791 slewie the pi-rat
slewie the pi-rat's picture

L0L!!!

first we are so fuking vain we won't get reading glasses...

...then, when we do! ...oh! the humanity! 

once upon the 40th of her first-born son, a friend 0'slewie got a trmendous snootful and grabbged the mike for the funniest five minutes of ear hair monologue anyone had ever heard...

Sat, 08/04/2012 - 20:48 | 2678773 slewie the pi-rat
slewie the pi-rat's picture

this isn't about equity pricing any more

the decoupling belies it, imo

this is fungibility:  printed "wealth" seeking an unencumbered asset to glom thru bankster channels which we love and support and may well actually die for;  who can tell?

of course as soon as it gets "printed, distributed and used a little"  it is encumbered, hypothecated and re-hy'd "invisibly" and moMoney >---> ubers...  a few cents at a time,  give, take, go to court

but:  it does tend to make "equities" get a little "mispriced" as these "QE assets" are "misallocated"and the losses are "transferred" to public debt so publicly owned REAL assets can be purchased:  by the banksters with QE? 

are you shitting moi?

well you were told not to look, BiCheZ!

Sat, 08/04/2012 - 21:01 | 2678789 chinaboy
chinaboy's picture

Everyone knows that this market depends on the so called analysts wrong to go up. This has been going for many years.

Sat, 08/04/2012 - 22:01 | 2678875 Meesohaawnee
Meesohaawnee's picture

the way i see it . wall street is returning the favor for obummer not sending anyone in handcuffs and letting ben print to infinity to allow endless bonuses and stock option payouts. make sense?

Sun, 08/05/2012 - 01:08 | 2679051 CheapBastard
CheapBastard's picture

Here is some Reality for Goldbugs:

Turkish banks are now offering gold desposits in an effort for the Turkish CB to hold more gold to back up its currency:

Central bank allows use of gold in reserves

 

* Commercial banks develop deposits to obtain gold

 

* Such deposits rocket fourfold in past year

http://www.reuters.com/article/2012/07/04/turkey-gold-banks-idUSL6E8HP9R...

Turkey has been gradually the barbric metal:

http://marginalevolution.com/blog/wp-content/uploads/2012/01/net-gold-bu...

 

I think the Turks are smart and will hold onto their gold instead of trusting a banker (or MFG or PFG) to hold it:

 

http://cdn.enjoyourholiday.com/wp-content/uploads/2011/09/The-Grand-Baza...

Sun, 08/05/2012 - 06:51 | 2679171 Dens
Dens's picture

"I think the Turks are smart and will hold onto their gold instead of trusting a banker."

Definately. The Turks, as the people in other eastern countries, not to mention India, have a culture of gold hoarding.

Sun, 08/05/2012 - 02:04 | 2679079 Nobody For President
Nobody For President's picture

Hey! CONsistency is important!

Sun, 08/05/2012 - 09:12 | 2679251 Racer
Racer's picture

They push the estimates up so the snake oil  ....uh, stock appears cheap after earnings and just before earnings they push the estimates down so the snak.. stock appears cheap and easily beats estimates

Sun, 08/05/2012 - 10:54 | 2679344 Dareconomics
Dareconomics's picture

This chart shows how analysts change their earnings projections over time. During economic turbulence, these guys have to adjust downward meaning that they did not see it coming. Please see 2001 and 2008 for really good examples. Of course they also do not see the recoveries coming either and must adjust higher on the fly as in 2003.

The real interesting information from this chart is that 13 of the 18 years slope downward showing an initial bull bias on which stock is sold to be later downgraded after all those muppets have bought whatever was being pushed. 

http://dareconomics.wordpress.com/

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