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These are from Zero Hedge. Yes, I know Tyler Durden is a character from fight club. This is obviously a pseudonym, but I have been reading this person for 3 years and have grown to believe that they are clearly an insider with a pretty clear view that merits my time.
Hussman Shows Why Record Corporate Profitability Portends Weakness Ahead
Submitted by Tyler Durden on 11/15/2010 09:53 -0500
Fail Gross Domestic Product John Hussman Stimulus Spending

One of the key forward looking topics that so far relatively few wish to touch, is what the implications of record excess money sloshing around will mean for corporate margins. Following the past 3-4 quarters, in which corporate profitability has risen to near all time highs, surging input costs threaten to end the party short, as companies such as Dean Foods demonstrate they have little ability to pass prices through to consumers (nonetheless, they will certainly have to try eventually). But Fed aside, is there a cyclical relationship between the vagaries of the corporate profitability cycle, and broader economic growth? As John Hussman demonstrates in his most recent note, The Cliff, this is indeed the case, as "present levels of corporate profits are followed by negative profit growth over the coming 5 years." Which is why all those calling for margin expansion and S&P EPS growth may wish to reconsider: being wrong about one of the two is bad, being wrong about both means one better be a TBTF...
» 5 comments Read more

Portugal Reminds World That It, Too, Is On The Bailout Wagon
Submitted by Tyler Durden on 11/15/2010 09:29 -0500
Ben Bernanke Eurozone Greece Ireland Portugal
______________________________________________________________________
From Chris Maretenson:
It is as if Europe is trying to kill the Euro (just as we predicted): the FT reports that according to Fernando Teixeira dos Santos, Portugal's finance minister, the risk that Portugal will have to turn to the international community for emergency financial assistance is high because of the growing dangers of contagion through financial markets that fear the eurozone debt crisis will spread. "The risk is high because we are not facing only a national or country problem. It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country." And just to make it appear sightly less palatable that Portugal is now pointing a loaded gun at its head, dos Santos threw a little of the blame all around: "This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely. It is not because markets consider we have similar situations. They are only similar in what concerns markets, but as I said they are very different. Markets look at these economies together because we are all in this together in the eurozone, but probably they could look different if we were not in the eurozone. Suppose we were not in the eurozone, the risk of the contagion could be lower." And while we are on the daydreaming page, suppose the Euro did not exist: things may have been just a little different, roughly in line with what the euroskeptics have been saying for almost two decades now. Suppose the Fed did not exist either...
Oil Futures: Crude Rebounds After Last Week's Sell-off
Prices were helped by slight recovery by the euro against the dollar, after the single currency hit a intra-day low of 1.3603 against the greenback during Asian trade. Crude prices are inversely correlated to the dollar, gaining as the U.S. currency weakens, as dollar-denominated commodities become cheaper for other currency holders. At 1238 GMT, the front-month December Brent contract on London's ICE futures exchange was 93 cents higher at $87.27 a barrel. The front-month December contract on the New York Mercantile Exchange was trading up 80 cents at $85.68 a barrel. The ICE's gasoil contract for December delivery was higher $1.25 at $743.50 a metric ton, while Nymex gasoline for December delivery was up 259 cents at $2.2358 a gallon.
Retail Sales Jump on Auto Strength
Retail sales rose 1.2% last month, the Commerce Department said Monday. Economists surveyed by Dow Jones Newswires had projected sales would climb by 0.8%. The increase was the biggest since March and the fourth in a row. September sales rose 0.7%, revised up from a previously estimated 0.6% increase. The strong gain is important for the economic recovery. Consumer spending makes up most of gross domestic product, which is the broad measure of U.S. economic activity. GDP in the third quarter grew a modest 2.0%, supported by a solid but not very big gain in consumer spending. Consumers have been frugal, restrained by a U.S. unemployment rate of 9.6%. Still, the latest government data show nonfarm payrolls rose by a greater-than-expected 151,000 jobs in October, a sign of improving labor conditions that, if sustained, could lead to stronger spending and economic growth.
Bailing Out Ireland, Bailing Out Banks
Frankly its a fiction of accounting whether the Irish banking sector or the Irish sovereign actually gets the bailout. Firstly given the nexus of funding guarantees that have bound the two together since the crisis, and which remain open to possible burden-sharing by bank bondholders. But secondly and heres the irony because the recent capitulation in Irish government bonds also appears to have keelhauled the banks.
O.K., You Fix the Budget
The looming federal deficits are so large that they are likely to occupy much of Washingtons attention for years. Arguably, this new deficit obsession what some are calling the Age of Austerity began this month. The midterm elections ushered in a Republican House majority pledging to shrink government, and on Wednesday the leaders of the bipartisan panel released the outline of a deficit-cutting plan for the panels members to debate. Like that panel, The New York Times has conducted its own analysis of the federal budget, but with a different final product. Rather than making recommendations, we are laying out a menu of major options, so that readers can come up with their own plan. We have received help along the way from the deficit panel, from Congressional and White House aides and from liberal, conservative and centrist budget analysts. The deficit puzzle on The Timess Web site is the result.
Fresh Attack on Fed Move
group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. "The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment," they say in an open letter to be published as ads this week in The Wall Street Journal and the New York Times. The economists have been consulting Republican lawmakers, including incoming House Budget Committee Chairman Paul Ryan of Wisconsin, and began discussions with potential GOP presidential candidates over the weekend, according to a person involved.
Highly recommend Chris Martenson.com
And The Oil Drum
Hussman Shows Why Record Corporate Profitability Portends Weakness Ahead
Submitted by Tyler Durden on 11/15/2010 09:53 -0500
Fail Gross Domestic Product John Hussman Stimulus Spending

One of the key forward looking topics that so far relatively few wish to touch, is what the implications of record excess money sloshing around will mean for corporate margins. Following the past 3-4 quarters, in which corporate profitability has risen to near all time highs, surging input costs threaten to end the party short, as companies such as Dean Foods demonstrate they have little ability to pass prices through to consumers (nonetheless, they will certainly have to try eventually). But Fed aside, is there a cyclical relationship between the vagaries of the corporate profitability cycle, and broader economic growth? As John Hussman demonstrates in his most recent note, The Cliff, this is indeed the case, as "present levels of corporate profits are followed by negative profit growth over the coming 5 years." Which is why all those calling for margin expansion and S&P EPS growth may wish to reconsider: being wrong about one of the two is bad, being wrong about both means one better be a TBTF...
» 5 comments Read more

Portugal Reminds World That It, Too, Is On The Bailout Wagon
Submitted by Tyler Durden on 11/15/2010 09:29 -0500
Ben Bernanke Eurozone Greece Ireland Portugal
______________________________________________________________________
From Chris Maretenson:
It is as if Europe is trying to kill the Euro (just as we predicted): the FT reports that according to Fernando Teixeira dos Santos, Portugal's finance minister, the risk that Portugal will have to turn to the international community for emergency financial assistance is high because of the growing dangers of contagion through financial markets that fear the eurozone debt crisis will spread. "The risk is high because we are not facing only a national or country problem. It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country." And just to make it appear sightly less palatable that Portugal is now pointing a loaded gun at its head, dos Santos threw a little of the blame all around: "This has to do with the eurozone and the stability of the eurozone, and that is why contagion in this framework is more likely. It is not because markets consider we have similar situations. They are only similar in what concerns markets, but as I said they are very different. Markets look at these economies together because we are all in this together in the eurozone, but probably they could look different if we were not in the eurozone. Suppose we were not in the eurozone, the risk of the contagion could be lower." And while we are on the daydreaming page, suppose the Euro did not exist: things may have been just a little different, roughly in line with what the euroskeptics have been saying for almost two decades now. Suppose the Fed did not exist either...
Oil Futures: Crude Rebounds After Last Week's Sell-off
Prices were helped by slight recovery by the euro against the dollar, after the single currency hit a intra-day low of 1.3603 against the greenback during Asian trade. Crude prices are inversely correlated to the dollar, gaining as the U.S. currency weakens, as dollar-denominated commodities become cheaper for other currency holders. At 1238 GMT, the front-month December Brent contract on London's ICE futures exchange was 93 cents higher at $87.27 a barrel. The front-month December contract on the New York Mercantile Exchange was trading up 80 cents at $85.68 a barrel. The ICE's gasoil contract for December delivery was higher $1.25 at $743.50 a metric ton, while Nymex gasoline for December delivery was up 259 cents at $2.2358 a gallon.
Retail Sales Jump on Auto Strength
Retail sales rose 1.2% last month, the Commerce Department said Monday. Economists surveyed by Dow Jones Newswires had projected sales would climb by 0.8%. The increase was the biggest since March and the fourth in a row. September sales rose 0.7%, revised up from a previously estimated 0.6% increase. The strong gain is important for the economic recovery. Consumer spending makes up most of gross domestic product, which is the broad measure of U.S. economic activity. GDP in the third quarter grew a modest 2.0%, supported by a solid but not very big gain in consumer spending. Consumers have been frugal, restrained by a U.S. unemployment rate of 9.6%. Still, the latest government data show nonfarm payrolls rose by a greater-than-expected 151,000 jobs in October, a sign of improving labor conditions that, if sustained, could lead to stronger spending and economic growth.
Bailing Out Ireland, Bailing Out Banks
Frankly its a fiction of accounting whether the Irish banking sector or the Irish sovereign actually gets the bailout. Firstly given the nexus of funding guarantees that have bound the two together since the crisis, and which remain open to possible burden-sharing by bank bondholders. But secondly and heres the irony because the recent capitulation in Irish government bonds also appears to have keelhauled the banks.
O.K., You Fix the Budget
The looming federal deficits are so large that they are likely to occupy much of Washingtons attention for years. Arguably, this new deficit obsession what some are calling the Age of Austerity began this month. The midterm elections ushered in a Republican House majority pledging to shrink government, and on Wednesday the leaders of the bipartisan panel released the outline of a deficit-cutting plan for the panels members to debate. Like that panel, The New York Times has conducted its own analysis of the federal budget, but with a different final product. Rather than making recommendations, we are laying out a menu of major options, so that readers can come up with their own plan. We have received help along the way from the deficit panel, from Congressional and White House aides and from liberal, conservative and centrist budget analysts. The deficit puzzle on The Timess Web site is the result.
Fresh Attack on Fed Move
group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. "The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment," they say in an open letter to be published as ads this week in The Wall Street Journal and the New York Times. The economists have been consulting Republican lawmakers, including incoming House Budget Committee Chairman Paul Ryan of Wisconsin, and began discussions with potential GOP presidential candidates over the weekend, according to a person involved.
Highly recommend Chris Martenson.com
And The Oil Drum
