Certain About Nothing

In "US Corporates Shy to Offer Guidance," the Financial Times reports that those who are at the economy's front lines have a less than clear vision of where things are headed:

US companies are more uncertain about the future than at any point since the financial crisis, with just one in five of the country’s biggest corporations making any predictions as they published fourth-quarter results.

“We’re seeing a marked reluctance from companies to be concrete in their forecasts,” said Christine Short at data provider Standard & Poor’s Capital IQ. “When companies have talked about prospects for 2012, they have tended to make generic comments, which could apply to any company in any sector.”

Some 410 companies in the S&P 500 index have reported results so far and just 86 of them offered an earnings per share forecast for the first quarter of 2012. That is on track to be the lowest number since the third quarter of 2009, when companies were still weighing up the impact of the financial crisis.

And yet, those whose view of reality comes largely by way of Excel spreadsheets, Bubblevision, and Wall Street watering holes appear to be exceptionally confident about the outlook, as Business Insider reveals in "All Of The Stock Market Sentiment Indicators Combined Into One Index" [italics mine]:

There are various measures of sentiment that stock market watchers follow. RBC [Capital] blended six of the biggest ones to form one comprehensive market sentiment indicator.  It consists of the 1) CBOE put-to-call ratio, which is currently neutral; 2) the American Association of Individual Investors Bull ratio, which is bullish; 3) the Investors Intelligence Bullish Ratios, which is neutral; 4) the National Association of Active Investment Managers Survey of Manager Sentiment, which reflects extreme optimism; 5) the NYSE New High to New Low ratio, which reflects extreme bullishness and 5) the CBOE Volatility Index, which is neutral relative to long run averages.
 
According to RBC's aggregation of the sentiment readings, the stock markets reflect extreme optimism.

Of course, they don't call that latter group the "smart money" for nothing -- right?

Comments

[roger]

US corporates are strictly opportunistic,
they operate and think in the here and now.
Visionaries they are not!

[Tom]

Agreed, Roger - their short-sightedness is what got us into this mess (peak everything). i think all that positive (bullshit) sentiment is just more propaganda to get investors into the market (from the sidelines) and furthermore with gas going to $5 a gal by Memorial Day (according to yesterday's news), the economy will most definitely TANK in the coming quarters.
It's going to impact people going to get to work (let alone all the casual driving that will come to a halt), businesses will have to deal with the higher cost of freight, and food growers will have to pass on the higher costs for fertilizer and shipping (to name just a few) with gas that high. Here comes rampant inflation.

[No one's accountable...that's a certainty]

Is Obama Getting Serious About Bank Fraud?

Bill Black: Are Pres. Obama's new measures effective or window dressing?

And the third win in the win-win-win is democracy, because if you allow systemically dangerous banks, what they do first is hold hostage the national economy. They say, you do anything to me and the entire economy comes down. And, of course, (b) they have so many resources that neither party is willing to take them on. And we've run a real-world test, right? We had a global disaster, a global, worldwide—nearly worldwide recession. In the United States alone the household sector lost $11 trillion. And we still have nobody in either party seriously willing to take on and shrink the banks.

http://jessescrossroadscafe.blogspot.com/2012/02/is-obama-getting-serious-about-bank.html

[Juvenal]

Why Inequality Matters: The Housing Crisis, The Justice System & Capitalism
By Bruce Judson
February 20th, 2012

Extreme economic inequality is among the most destructive forces in a society. As inequality grows, it undermines the effective functioning of the economy, the basic tenets of capitalism, and the foundations of democracy.

Unfortunately, the housing crisis and now the housing settlement increasingly look like an example of how this mechanism works.

One of the central characteristics of highly unequal societies is that two sets of laws develop: One set for the rich and powerful and one set for everyone else. The more unequal societies become, the more easily they accept the unacceptable, and with each unrebuked violation, the powerful actors at the top of the society gain an ever greater sense of entitlement and an ever greater sense that the laws that govern everyone else don’t apply to them. As a result, their behavior becomes increasingly egregious.

http://jessescrossroadscafe.blogspot.com/2012/02/why-inequality-matters-saving.html

[farm land investment]

Stock markets globally are overvalued by a good 15-20pc. Markets are looking only at the upside, with none of the downside, especially from macro-economic and geo-political risks emanating from Iran and Europe. What happens if Israel attack - which seems increasingly likely - and oil goes to US$200? Is anyone taking that into account?

[Double-Dipping]

Wealthy Enriched by Double-Dipping U.S. Plan
Repeat Participants

In addition to the Agrawals, repeat participants identified by Bloomberg include:
-- Four Glendale, Arizona, builders who won $142 million in awards for the disadvantaged since 1996 as part of $364 million in total government contracts, all at the same address.
Dennis Shaw, 42, bought a desert estate for $3.1 million and reported a net worth of $13.4 million in 2007, two years after graduating from the program, property records and court documents show. His company, EPC Corp., was the first of four at the same address to enter the program. He also held options on the successor firm, Candelaria Corp., according to his personal financial statement. That company’s owner, Reggie Candelaria Jr., 42, paid $2.4 million for a Tuscan-style residence with eight bathrooms while in the program.

Shaw said in a telephone interview that the companies continued to participate through joint ventures and mentoring agreements. Candelaria blocked a reporter’s entrance to the property by padlocking the front gate.

“No comments today,” he said.

http://www.bloomberg.com/news/2012-02-21/wealthy-enriched-by-double-dipping-u-s-plan.html

[Central Bank News]

Seems to me, with things so finely balanced it's better if more people are optimistic - it means they will actually take, rather than defer, investment and hiring decisions... I mean the recovery is going to be slow-going no matter what, but sentiment is a huge deal

[WK]

Honestly, Michael, I understand bearish mentality but I do not understand how you can be bearish for years on end like this. I will admit I tend to be a bear as well, but I have done well like many others in the market this year, and the market has proven people like you wrong so far, even if it can be dismissed with low volume and less than normal sentiment from the investing public. I have take my losses on some trades this year like anyone, but I have taken more gains than losses and am eking out a living as an investor in these times when companies are loath to hire someone in their 50s. When I can make as much in the market as I can doing a day job for shallow corporations, all i can say is fuck them. I had plenty to still offer society but the smart people that run todays multinationals dont share that opinion, and I'll be damned if they are going to affect my outlook on life. I count as my peer group many others in my generation, ages 50-65, that were expelled (laid off) by the multinationals with cover from the Great Recession. There is still a lot of brain power on the sidelines, but what is sad is that the powers that run these corporations dont recognize this any more. Once more all i can say is fuck them, I'm getting along just fine. If you (the company management) are fine running your companies with Indian and Chinese help, have at it, I'll have little or nothing more to do with you.

This is a sad commentary on the state of the USA when younger managers that really dont know as much as they think they do pass judgment on older workers as they are today, or not hiring other older workers. Sir James Goldsmith forecast this accurately in 1994, although he is dead now Sir James for all his faults earned his billions by being smart and he knew exactly what multinationals were capable of doing with corrupting the labor market, well before anyone else went public with their reservations.

[Trade conglomerate for community]

Maybe more business activity is falling under the radar on a local level?

Help for the uninsured: Doctors accept local currencies

NEW YORK (CNNMoney) -- When a doctor spotted a lump on Alisha McNamara's lungs earlier this year, she and her husband Michael started panicking.

The couple had gotten rid of their health insurance when sales at their Fayetteville, Ark. pizza shop, Bariola's Pizza, started sliding last year.

For two months, they agonized over how they were going to afford the MRI and other tests that the doctor said Alisha needed, until they remembered their stash of "Trade Dollars," a local currency used in the Fayetteville area.

The currency, issued by a company called Local Trade Partners, allows local business owners to exchange goods and services without using U.S. dollars. An auto repair man could earn Trade Dollars by fixing someone's car, for example, and then use the Trade Dollars he earned to buy a pizza at Bariola's. The McNamaras could then use the currency at other local businesses that accept it, including a handful of medical care providers.

http://money.cnn.com/2012/02/21/pf/local_currencies_medical_care/index.htm?iid=HP_LN

[What if]

What If Democracy Is Bunk?

by Andrew P. Napolitano

What if the purpose of democracy is to convince people that they could prosper not through the creation of wealth but through theft from others?

What if the government bribes people with the money it prints?

What if we could free ourselves from the yoke of big government through a campaign of education and information and personal courage that leads to a revolutionary return to first principles? What if the establishment doesn't want this? What if the government remains the same no matter who wins elections?

http://lewrockwell.com/napolitano/napolitano42.1.html

[Go Local]

'Cash Mobs' profit locally owned stores

A new phenomenon, called “Cash Mobs,” is spreading across the country, changing the way people view local businesses. Similar to flash mobs, Cash Mobs organize customers to spend money at struggling locally owned businesses to support their community.

Since starting last year, cash mobs have been organized in 32 states and Canada. But unlike flash mobs, which are generally entertaining and trivial, they come with a serious purpose.

The idea is the brainchild of Buffalo blogger and engineer Chris Smith, who said that Cash Mobs are sort of a reverse Groupon. Instead of offering people bargain-basement deals, people pay the regular price to support retailers in their communities.

In a time where many small, local businesses are struggling, victims of a fallen economy, the concept is a financial relief, serving to bring communities together.

Smith said cash mobs are a chance for business owners to begin building a longer-term relationship with customers.

He also wants consumers to rethink the value of locally owned stores.

“[I want to] make them think once a month that you don’t have to go to Target for everything you need and everything you want,” Smith said.

http://www.pri.org/stories/business/social-entrepreneurs/cash-mobs-profit-locally-owned-stores-8498.html

[Get out of Jail ...roll again]

Janet Tavakoli -- MUST SEE

http://market-ticker.org/akcs-www?post=202446