By David Galland in Casey's Daily Dispatch:
David Rosenberg of Gluskin Sheff can almost always be counted on for a useful observation or two, and his letter today is no exception. In it, he comments on the basis for the strong rise in U.S. corporate profits. It's his observation, so I'll let him make it...
THE PROFIT PICTURE - THE REAL STORY
Total U.S. corporate profits (national accounts basis) rose 30.6% YoY in Q4, a huge swing from the -25.1% trend a year ago.
Almost the entire story is in the financial sector where profits have soared 240%, which is unprecedented. With the banks shrinking their asset base, the surge in earnings has been due to the ability to 'extend and pretend' post the FASB 157 changes a year ago and the ability to play a super steep yield curve.
Financial sector profits have accounted for 85% of the overall increase in corporate earnings. Total nonfinancial earnings are up the grand total of 5.2% on a YoY basis, though this is still much better than the -17.9% pace a year ago.
As something of a set piece on that theme, check out this rare video on mainstream financial media - from MSNBC - that goes into an unaccustomed level of detail over the scam the Feds are running in cahoots with the financial institutions.
Of course, upon being required to think - even with the facts being carefully laid at his feet - the average Joe's eyes will gloss over and thoughts of Fed machinations will be replaced with those of a nice cold beer. But it's encouraging to see the scam getting some wider coverage nonetheless.
David Rosenberg of Gluskin Sheff can almost always be counted on for a useful observation or two, and his letter today is no exception. In it, he comments on the basis for the strong rise in U.S. corporate profits. It's his observation, so I'll let him make it...
THE PROFIT PICTURE - THE REAL STORY
Total U.S. corporate profits (national accounts basis) rose 30.6% YoY in Q4, a huge swing from the -25.1% trend a year ago.
Almost the entire story is in the financial sector where profits have soared 240%, which is unprecedented. With the banks shrinking their asset base, the surge in earnings has been due to the ability to 'extend and pretend' post the FASB 157 changes a year ago and the ability to play a super steep yield curve.
Financial sector profits have accounted for 85% of the overall increase in corporate earnings. Total nonfinancial earnings are up the grand total of 5.2% on a YoY basis, though this is still much better than the -17.9% pace a year ago.
As something of a set piece on that theme, check out this rare video on mainstream financial media - from MSNBC - that goes into an unaccustomed level of detail over the scam the Feds are running in cahoots with the financial institutions.
Of course, upon being required to think - even with the facts being carefully laid at his feet - the average Joe's eyes will gloss over and thoughts of Fed machinations will be replaced with those of a nice cold beer. But it's encouraging to see the scam getting some wider coverage nonetheless.
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