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Negative Growth - Financials

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April 21, 2008 – Comments (6)

Bespoken has a post on the negative growth of earnings that have been reported by the 20% of companies that have reported so far.  Currently it is at -37% year over year.

Take out the financials and it isn't nearly so bad.  But look at the consumer discretionary... -23%. 

Another topic, Big Picture is reporting losses from banks that didn't show up on the balance sheet.

Seems to me this is the same path that Japan took, allow banks to keep their books cooked...  These losses will eventually be reported, but this is likely to be a much longer period of constantly reporting losses because of this moving assets to different parts of the balance sheet and keeping them inflated.

Egads, look at the $42 billion in losses living on insurance balance sheets...  I suspect when some of those insurance companies can't pay their losses some of that will transfer to the banks...

I am posting too quickly here.  I did a post on gold hedging and cost increases.  Caps tends to hide earlier posts if they are posted closely so I'm linking it here.

6 Comments – Post Your Own

#1) On April 21, 2008 at 11:13 AM, wolfhounds (28.97) wrote:

Didn't read this before posting on C this morning, but right on the money.

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#2) On April 21, 2008 at 11:39 AM, mandrake66 (94.46) wrote:

YoY EPS growth for financials: -84.9%

Ouch! 

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#3) On April 21, 2008 at 11:48 AM, mandrake66 (94.46) wrote:

That EPS growth table from Bespoke is a bit surprising. Energy companies are coming in below estimates (10.10% vs expected 22.8%) but consumer staples are up (15.3% vs expected 8.1%). I'm not sure exactly what goes into the latter, but I assume this is capturing the rising costs in food and energy, especially since consumer discretionary is getting crushed (-23.0% vs expected -13.3%).

Technology is far and away the major outperformer here (28.8% vs expected 7.9%). I'm still puzzled as to the reasons for this, as I have been since IBM reported. Why is tech so robust, and is it sustainable?

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#4) On April 21, 2008 at 2:07 PM, dwot (61.86) wrote:

I bet tech is getting a gain on exchange.  With the Euro it probably isn't sustainable.  The holes in the European banks are just starting to get scary so I suspect Euro will be fairly flat to US, maybe up or down 10%. 

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#5) On April 22, 2008 at 6:56 PM, lquadland10 (< 20) wrote:

If the Euro goes flat then you would think that the dollar gets stronger and if that does I think you will see gold and oil and agriculture  drop. Rock On.

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#6) On April 22, 2008 at 8:48 PM, dwot (61.86) wrote:

I would think other currencies would get stronger...

But I do think a pullback in gold...  Like the one in oil I am currently losing big time on... This is no $80 oil... 

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