Since the mainstream media has been ordered to stop publishing corporate earnings data to prevent the spread of panic, TSG luckily still does. Here is their synopsis...

"With a total of 2006 companies having reported Q4-08 earnings in the sixth week of this reporting season (1550 last week), the net (loss) on continuing operations widened to -$79.64 billion ( from -$42.769 billion last week) which works out to a change in earnings of -156.4% from Q4-07. This compares to -150.7% last week, -144% two weeks ago and -80% three weeks ago. The final result for Q3-08 was -62% from Q3-07.

The hardest hit sectors so far have been Financials (504 companies) in which the net on continuing operations has fallen from $6.44 billion in Q4-07 to -$40.3 billion (loss) in Q4-08 for a -725% change, Basic Materials (84 companies) with an earnings change of -341.9%, Consumer Services (246 companies) with -263% change and Oil & Gas (63 companies) with a -176% change versus Q4-07."

In their weekly report, TSG also offered their opinion on the much vaunted stimulus package and it seems that history has already proven it will fail.

Regards - VHF

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Much pomp, ceremony and cost about nothing…

TSG

Feburary 15, 2009

Stock markets were in a holding pattern awaiting details on Obama’s stimulus package dubbed TARP 2 by the media. If Treasury Secretary Tim Geithner’s speech Tuesday was aimed at providing details on the plan, it was a dismal failure. It became clear that if the government has a definitive plan or any clue what they are doing, both are well guarded secrets. Republican Senator Richard Shelby, one of the few stalwarts who believes government should keep its nose out of the nations boardrooms, complained that Geithner “wasted about three or four hours of the Senate’s time” in trying to describe TARP2, “the specifics are, he doesn’t have them.”

As a result, Tuesday was just another really bad day on Wall Street with the Dow shedding more than 420 points before hobbling moderately higher by the close. Criticisms of prior bailouts and claims by the new Administration that the latest list of giveaways is a significant improvement over past programs ring hollow. What we do know is that no real new ideas have so far been put forward. Obama’s goal of a bi-partisan solution has also failed to materialize. Not one Republican voted for the stimulus package thanks to efforts by Pelosi & company to effectively exclude them from the decision making process.

The costliest single item of the plan is a tax credit of up to $400 for individuals earning less than $75,000 and up to $800 for couples earning less than $150,000 at a cost to taxpayers of $116 billion. But isn’t this a repeat of the $100 plus billion tax rebate program offered by the last Administration that most intelligent economists and analysts agree was a colossal failure and waste of money?

Unfortunately, this is a government that so strongly believes that the New Deal from 1933 – 1938 was a success that they are doing everything possible to repeat it. And this in spite of clear claims to the contrary by FDR’s Secretary Treasurer Henry Morgenthau from 1933 to 1945, who penned in a 1939 diary entry, “We have tried spending money. We are spending more than we have ever spent before and it does not work. . . . After eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

What is that well known saying by Santayana about those who ignore the lessons of history?