Negative Annualized Stock Market Returns for the Next 10 Years or Longer? It's Far More Likely Than You Think
source: http://globaleconomicanalysis.blogspot.com/2011/02/negative-annualized-stock-market.html
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Market cheerleaders keep ratcheting up expected earnings, failing to note that much of the recent earnings growth is simply not sustainable.
Reasons for Unsustainable Earnings Growth:
* Much of the recent earnings growth is directly related to federal stimulus that will eventually end.
* Much of the earnings in the financial sector are a mirage, based on assets not marked-to-market and insufficient loan loss reserves. The Fed and the FASB have repeatedly postponed rules changes for the benefit of banks and other financial institutions.
* Earnings in both the financial and nonfinancial sectors have margins outside historical norms, based on very low headcounts and outsourcing.
Read more at Mish's Global Economic Trend Analysis:
http://globaleconomicanalysis.blogspot.com/2011/02/negative-annualized-stock-mar...
Reasons for Unsustainable Earnings Growth:
* Much of the recent earnings growth is directly related to federal stimulus that will eventually end.
* Much of the earnings in the financial sector are a mirage, based on assets not marked-to-market and insufficient loan loss reserves. The Fed and the FASB have repeatedly postponed rules changes for the benefit of banks and other financial institutions.
* Earnings in both the financial and nonfinancial sectors have margins outside historical norms, based on very low headcounts and outsourcing.
Read more at Mish's Global Economic Trend Analysis:
http://globaleconomicanalysis.blogspot.com/2011/02/negative-annualized-stock-mar...
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