WARNING: Stock Market Is At Risk Of A Complete Reversal Of The Last 3 Years’s Gains Or Worse

Profit Outlooks 90% Negative, Wages Are Down, Revenue Streams Are Drying Up, Cost Cutting Measures Are Maxed Out, And US Government Debt Threatens National Security

Earnings Cliff Ahead? Profit Outlooks 90% Negative

CNBC: Earnings conference calls are beginning to resemble crisis hotlines as corporate executives slash profit forecasts because of fears of higher taxes, a recession in Europe and slowing economy in China.

Of the 20 companies in the S&P 500 (^GSPC) that have provided guidance for the fourth quarter during the current earnings reporting season, 18 have slashed their forecasts, according to Goldman Sachs (GS).

That’s a 90 percent negative run rate that many investors and analysts have never seen before.

“Policy has trumped weak fundamentals since 2009,” said Brian Kelly of Shelter Harbor Capital. “If the market cannot rally with multiple central bank meetings this week, then we are at risk of then entire process reversing.”


Jobs are Up, but Wages are Down

KANSAS CITY, Mo. –  A new report offers sobering news about the job market – jobs may be up, but people are bringing home a lot less money than they used to earn.

The National Law Project says 58 percent of all jobs created during the recovery have been low wage positions.  They say that 60 percent of the jobs lost during the great recession were mid-wage jobs that paid between $14 and $21 dollars an hour.

But nearly 60 percent of the jobs being created are low-wage jobs that pay a lot less than what people made before the economic downturn.


We are In A Modern-day Depression, The Real Unemployment Rate Is Closer To 19%

Don’t be fooled by the headline unemployment number of 8.1% announced on Friday. The reason the number dropped to 8.1% from 8.3% in July was not because more jobs were created, but because more people quit looking for work.

The key indicator of our employment health, in all the statistics, is what the government calls U-6. This is the number who have applied for work in the past six months and includes people who are involuntary part-time workers—government-speak for those individuals whose jobs have been cut back to two or three days a week.

They are working part-time only because they’ve been unable to find full-time work. This involuntary army of what’s called “underutilized labor” has been hovering for months at about 15% of the workforce. Include the eight million who have simply given up looking, and the real unemployment rate is closer to 19%.

We are experiencing, in effect, a modern-day depression. Consider two indicators: First, food stamps: More than 45 million Americans are in the program! An almost incredible record. It’s 15% of the population compared with the 7.9% participation from 1970-2000. Food-stamp enrollment has been rising at a rate of 400,000 per month over the past four years.


CEOs Run Out of Costs To Cut And US Domestic Demand Is In Decline As Customers Are Increasingly Wary About Spending!!

Sales stumbles raise fresh worry for corporate America

Reuters: A flagging world economy took a toll on much of Corporate America in the third quarter, leading the likes of eBay Inc, American Express, IBM and Textron Inc to miss Wall Street’s sales targets or warn that spending was slowing into the holidays.

Those misses sparked concerns among investors that corporate America’s year-long streak of profit growth could be nearing an end as CEOs run out of costs to cut and customers are increasingly wary about spending.

A majority – 54.3 percent – of the 70 companies in the widely watched Standard & Poor’s 500 Index that have reported results so far have missed analysts’ revenue forecasts, according to Thomson Reuters I/B/E/S.

The list of companies’ reasons for weak performance has expanded, with some citing a decline in demand in the United States...

“Once we start to see earnings miss – when expectations have been pushed down and they still miss – that is when you’ll see the market start to fall apart,” Springer said.

A Collective Collapse In Global Demand Is What Happened During The Great Depression. It’s Happening Again Today!!!


Experts: US Government Debt Threatens National Security

U.S. government debt, which has exploded to $16 trillion, represents a threat to national security, experts say.

Repaying the debt, which now totals more than 100 percent of the gross domestic product (GDP), eats up money that could otherwise go to defense spending, expenditures on diplomacy and foreign aid.

“A nation with our current levels of unsustainable debt … cannot hope to sustain for very long its superiority from a military perspective, or its influence in world affairs,” Adm. Michael Mullen, former chairman of the Joint Chiefs of Staff, said last month, CNNMoney reports.

Payments on Interest to Exceed Defense Spending by $125 Billion

In a decade, federal spending to pay for the interest on America’s debt will exceed total spending on the defense budget by $125 billion, or 20 percent, according to projections from the Congressional Budget Office and the Office of Budget Management. The projections are based on President Barack Obama’s current budget plan.

Here’s a chart from the Republican side of the Senate Budget Committee that shows 2022 national defense spending vs. net interest payments:


Sam Zell: ‘Nobody wants to make commitments beyond tomorrow’

We’re Heading for Recession,’ Says Sam Zell

CNBC: A compounding lack of confidence in the future has kept American companies from investing in their businesses and is leading the country back into recession, real estate mogul Sam Zell told CNBC.
Sam ZellThe CEO of Equity Group Investments, which holds multiple publicly traded companies primarily in the real estate space, said a lack of leadership in Washington is keeping the $2 trillion or so of cash on company balance sheets on the sidelines.
That’s happening even as the Federal Reserve continues pumping liquidity, which Zell said is being used only to prop up the stock market.
“Nobody wants to make commitments beyond tomorrow,” Zell said during a”Squawk Box” interview. “One of these (recession) triggers is when enterprise projects start getting delayed. We’re heading for a recession and that’s exactly what you’re looking at now. You’re looking at capital expenditures across the board being deferred for a reason: There’s no confidence.”
He’s right!
As earnings season crashes upon us, it’s become glaringly apparent that corporations are sitting on record piles of cash, reluctant to invest in their businesses or hire new workers in an uncertain economic outlook. At present, cash balances have swelled by 14% and are on track toward $1.5T for companies in the Standard & Poor’s 500, which, if attained, would be a historic high.
Article Continues Below

Just-In From CNBC:

Corporations are stowing away cash at record rates, reluctant to invest in their businesses or hire new workers as uncertainty clouds the future.

Amid a lackluster earning season that has featured many companies missing sales expectations, cash balances have swelled 14 percent and are on track toward $1.5 trillion for the Standard & Poor’s 500, according to JPMorgan. Both levels would be historic highs.

The buildup contrasts with an earnings picture in which 61 percent of the 127 companies that reported through last week have missed revenue expectations though more than half have beaten estimates.

Sam Zell: Dow Should Be at 9,000, Market Is ‘Artificial’ 


Projects Start Getting Delayed And Now We Are Starting To See Earnings Miss

Corporate Side Data Is Turning South

Let’s just go to the charts!

1. Growth in capital expenditures has turned negative.


Core capex orders

Bloomberg, Business Insider

DAVID ROSENBERG: The Last Two Times Export Orders Collapsed Like This, We Were In A Recession 


Tomorrow 44 SPX companies report.


37 Frightening Facts That Show How Cruel This Economy Has Been To Millions Of Desperate American Families

please remember that behind each statistic are the tragic stories of millions of desperately hurting American families.

Over the past decade, things have steadily gotten worse for American families no matter what our politicians have tried.  Poverty and government dependence continue to rise.  The cost of living continues to go up and incomes continue to go down.  It is truly frightening to think about what this country is going to look like if current trends continue.

The following are 37 facts that show how cruel this economy has been to millions of desperate American families…

1. One recent survey discovered that 40 percent of all Americans have $500 or less in savings.

2. A different recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.

3. In the United States today, there are close to 10 million households that do not have a single bank account.  That number has increased by about a million since 2009.

4. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

5. The number of Americans living in poverty has increased by about 6 million over the past four years.

6. Median household income has fallen for four years in a row.  Overall, it has declined by more than $4000 over the past four years.

7. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.

8. According to a survey conducted by the Pew Research Center, 85 percent of middle class Americans say that it is more difficult to maintain a middle class standard of living today than it was 10 years ago.

9. In the United States today, 77 percent of all Americans are living to paycheck to paycheck at least some of the time.

10. In the United States today, more than 41 percent of all working age Americans are not working.



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