|September 1, 2009|
How long can this rally last on aggressive cost-cutting and crappy – but "better-than-expected" – earnings?
Last week, we pointed out that the market is rising on progressively lower volume. And the weakest companies are leading the way. But it's the lack of revenues that should worry you the most.
You're smarter than that. You can look down the road and see the bigger picture. And the big picture is that earnings are likely to turn ugly again over the next several quarters.
Aggressive cost-cutting could still boost third quarter numbers. And fourth quarter comparisons against a cataclysmic quarter last year might look downright rosy. But for stocks to sustain their advance beyond the next two quarters, companies must increase sales. And that is going to be a challenge.
And sales are not going to improve while job losses continue to mount.
The last employment report shows that even the government is cutting jobs. The government is usually the last bastion against falling employment. But with falling tax receipts and swollen budgets, even they have succumbed to the economy.
Sometimes it's hard to tell which way the wind is blowing in the alternative energy world.
Just as quickly as $130-a-barrel oil sparked interest in breaking our dependency on oil, $40-a-barrel oil squashed it.
The Fed may be audited… finally...
Ron Paul's efforts to audit the Federal Reserve are finally gaining some traction. But let's hope Barney Frank doesn't screw it up first.
Rusty McDougal agrees. I asked him about this yesterday. Here's what he had to say:
Let's hope this bill doesn't get neutered. The machinations of this foreign financial power need to be exposed for what they are.
Truckers shooting straight from the hip about the economy…
When the real estate market had just begun to sour, the National Association of Realtors issued statement after statement that the worst was behind us. Nearly three years later we still haven't found a bottom.
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