First Collective Quarterly Loss in Recorded History for S&P 500

[KRonn]

Wow Minsky, that graph stinks! It must be wrong... it just falls all the way down at the far right....    :-[    Numbers under it show a negative over 1400, which I guess are losses. That would appear to be nastily huge!

[Caliga]

I hope it gets worse because I think it'd be fun to be a hobo.

[Malthus]

I hope it gets worse because I think it'd be fun to be a hobo.

Wouldn't change your culinary habits much. 

[Caliga]

Wouldn't change your culinary habits much. 

Precisely.  In fact I'd like to think I've been preparing for this eventuality for my entire life. 8)

[DGuller]

If Bernanke says the recession is going to end then we have nothing to worry about.

Everyone knows Fed Chairmen are never wrong.

Oh wait.

Come on, he can't be wrong every single time, it's Bernanke, not CNBC.  Surely he's due to get one right.

[The Minsky Moment]

Wow Minsky, that graph stinks! It must be wrong... it just falls all the way down at the far right....    :-[    Numbers under it show a negative over 1400, which I guess are losses. That would appear to be nastily huge!

The graph is very real - the numbers come straight from S&P.

The numbers underneath represent the *percent* change in earnings in different sectors.  Ie in the financial sector the change in earnings was over -1,400 percent.   ??? 

[Barrister]

http://www.ft.com/cms/s/0/ed7e49fe-1191-11de-87b1-0000779fd2ac.html#

If you can access the full article through the link, click on the graphic on the top right corner - it is one of the most scary charts I have seen so far.

A good piece of this is being driven by a few big financials, but still it is an earnings catastrophe without recent precedent.  Over $20/share.

And this is just the 4Q numbers from last year.  The next couple quarters aren't exactly exciting much optimism either.

If I'm reading that right, one third of that total loss comes from one company - AIG.  And most of the losses in general come from financial services companies taking one time writedowns.

*IF* financial service companies have been honest and don't need to take a lot more writedowns then it sounds like this could be a one quarter only blip.  If.

[The Brain]

 

http://www.youtube.com/watch?v=UgGe7VJHTts

[The Minsky Moment]

If I'm reading that right, one third of that total loss comes from one company - AIG. .

The AIG loss is one-third of the net loss figure.  However, at least some reporting companies in the S&P 500 reported gains for the fourth quarter.  Thus the sum of the total amount of losses from those companies that reported losses is greater than the $180 billion number.   

The AIG loss is a big contributor, but there are many others who pitched in.

And most of the losses in general come from financial services companies taking one time writedowns

Take a look at the second chart.  The financial services sector clearly is big mover, but all sectors experiences very significant earnings declines.  Note that those numbers are "based on operating profits" and hence cannot be ascribed merely to one time writedowns.  Note that S&P also reports negative net OEPS as well ("operating earnings per share")

*IF* financial service companies have been honest and don't need to take a lot more writedowns then it sounds like this could be a one quarter only blip.  If.

If that holds, and if deterioration in the real economy does not have additional knock-on effects on the consumer and industrial sectors.  There are grounds for some pessimism on both counts.

I don't think we are likely to see anothe -$20/share figure going forward, but S&P's projection of +8.75/share for the next two quarters looks unduly optimistic to me.

[FunkMonk]

I've already used up my 10 allotted free articles. 

[KRonn]

The AIG loss is one-third of the net loss figure.  However, at least some reporting companies in the S&P 500 reported gains for the fourth quarter.  Thus the sum of the total amount of losses from those companies that reported losses is greater than the $180 billion number.   

The AIG loss is a big contributor, but there are many others who pitched in.

We're doomed...

But hey, I liked the comment I heard on tv about the AIG spokesmen, guy is another "Baghdad Bob", defending "retention" bonuses to keep their good people. Seems at this point they'd be doing anything to push folks out of the company. That division getting the bonuses was the division that incurred the huge losses, according to the reports I saw. Sheesh... Good that their contract was structured in such a way that they got bonuses regardless of the outcome.

So at the same time the govt is saying AIG had contracts that we can't stop, they're going after the auto makers to change contracts with the unions, judges have been given authority to rewrite mortgage contracts, and so on. Lol... I just love how this is all working out. But rest assured, Barney Frank and other pols are hot on the trail of AIG! Lol. What I want to know is, who is hot on on the trails of the politicians, to call them to account for their actions, inactions, incompetence in these messes?  :-[

Lol....

[Berkut]

They are not getting bonuses for doing a good job - they are retention bonuses - basically a bonus given to people who you do not want to leave.

Perhaps that is not a good idea, but the issue is simple: they signed a contract that says if they stuck around, they would get bonuses of X, Y, and Z. So barring bankruptcy or something like that, they will get said bonuses. Nation of laws and all that.

[Scipio]

I am not worried.  Prosperity is just around the corner.

I am on the horizon!

[garbon]

Bye AIG!

Obama berates AIG and vows to try to block bonuses

Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for "recklessness and greed" Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. "How do they justify this outrage to the taxpayers who are keeping the company afloat?" Obama asked. "This isn't just a matter of dollars and cents. It's about our fundamental values."

[Weatherman]

lol