This page has been archived and commenting is disabled.
Number Of European Money Losing Companies Rises For First Time In 2 Years, Doubles
While the record corporate profit bonanza (if now declining) is still the fallback argument for any bearish allegation that the only reason why the market is up 20% in 3 months is due to $2 trillion in liquidity dumped into markets by central banks, this may be about to end quite abruptly, especially if Europe is a harbinger of things to come. As the following chart from Credit Suisse shows, the number of large companies (>500bn market cap) that lose money on an LTM basis (so not just in the quarter, and thus with a much longer lasting effect) has risen in Q4 for the first time since Q3 2009. And while in nominal terms the change is still relatively modest, the actual change in "losing companies" is a doubling from under 5% to 10%, as for the first time in years the percentage of European money losing companies matches that of the US.
Since economic decoupling, while completely flawed, can last as long as recently printed money makes its way to the "hottest" markets on the margin, in this case the US, corporate decoupling as a theory is just to naive to even propose. At best the US will be hit with precisely the same lag that David Rosenberg mentioned in early January. The reason for the corporate profitability deterioration: surging input costs courtesy of the recent commodity spike. In other words, the only upside case for stocks, as their earnings are about to turn far more negative is multiple expansion. The same "multiple expansion" that will likely prove to be the same mirage as decoupling once the market digests what David Rosenberg discussed just yesterday in the context of the tax shock already unleashed by the administration.
»
- 5873 reads
- Printer-friendly version
- Send to friend
- advertisements -
I am 99% positive that the hair growing on my asshole looks better than the hair on Adam Johnson’s (Bloomberg idiot) head.
Why are we subjected to this?
In other words, the recent rally in the stock market is crazy and we are going off a cliff soon.....
Sounds bullish.
Long b-hole hair, bitchez!
http://www.youtube.com/watch?v=aC19fEqR5bA
Alessio Rastani
I have lot's of respect for this guy, he is saying that the 1%%%% Are motherfuckers and be ready for a downward market when the Irish people hosted him!
So be Ready
if it weren't for decoupling + printing + propaganda, we'd be screwed!
the Goldilocks economy is already a walking zombie ...you say she's about to get fucked too???
"And while in nominal terms the change is still relatively modest, the actual change in "losing companies" is a doubling from under 5% to 10%....."
I prefer to think that large American companies have become twice as good at losing money.
/sarc
Were twice as good. The europeans have caught up.
The only problem is the ECB is about to offer another $1T in liquidity.
More counterfeit money?
That should boost the long-term outlook for Europe.
it's looking good
we'll soon have all Eurozone companies losing money and as bankrupt as all the Eurozone banks
Fantastic, welcome to ZombieWorld (a theme park of socialist economic and banking horrors)
Well unless the rate of profit declines there is no hope for consumers ever to have any money to buy anything. You cannot squeeze households forever to boost profits - which is all that is happening with food prices and service charges. It isn't just petrol its insurance premia, it's taxation. Even defending your rights in Britain costs 20% Sales Tax on lawyers' bills
My company just bought a company in the UK. That company in the UK has really good stock market investment people - they know the UK economy, already a pile of shit, will be flushed down the drain once all this Eurozone shit starts to unravel.
My boy Nigel Farage has been calling it for the last 5 years.
"Let's have more Europe! Lets have more Failure!"
http://t.co/xHyic9m1