Down goes the Dow

If by that you mean do I always listen to you, the answer is a resounding NO.

I could care less about who you listen to. Unfortunately you are a fool bound to make a mistake, hopefully you are young with little to lose.

You could care less? Ok. Thanks for the affirmation.

Regarding the increased overall debt.

Apparently a major reason for this "Trump" rally is this narrative that banks want to lend to households and small businesses but their hands are tied by Dodd/Frank regulations. Now with Republicans in control of the WH and Congress those banks are going to be unshackled and free to lend. But all that increased outstanding debt belies that. Moreover we should take it as good news if a lot of Americans are not getting loans because they probably shouldn't qualify. This is the problem with wealth disparity. So many Americans are without any wealth that could serve as collateral for a loan. Too many Americans have so much wealth that they don't need loans except to dodge taxes.

Based on my personal observation from people I have talked to and things I have read, there has been annoying hoops you have to jump through to get loans because of Dodd Frank. But at the end of the day it hasn't stopped quality lending from happening. It sounds to me like Obama and certain congressmen wanted to air drop a bureaucratic jobs program into Dodd/Frank. Doing away with that bureaucracy is arguably a good thing. But I don't think it has hindered lending.

I happened to catch Paul Krugman on Bloomberg the other day. He also said he saw no evidence in data of Dodd/Frank hindering loans to businesses who wanted loans.

Call me cynical, but I suspect dismantling Dodd/Frank is only going to lead to Wall Street going back to dumping bad loans into CDO's and off loading them to a public desperate for yield. Then Wall Street is going to blame poor people when things go south.

A message for Igy's clients...

http://www.edelmanfinancial.com/education-center/articles/w/what-you-should-know-about-your-financial-planner?mkt_tok=eyJpIjoiTURNeFpERTVaVEJqTXpndyIsInQiOiJOWDAyYUY2S29Od01HRDdWUU1VdzR0OXpOSDFXc2tteGlqUkQ4OG9iaVNuOStRU2lGSWs5RWhjaGZNb1NQUWI0RGpoZ09cL2ZSUDlRdFFmRllZUlZ0amhnXC9oaHRwNkNkM3VSeXJlbDVyQjVaR1VDbWJnWERLMG1TMURpem5UWThtIn0%3D

Ryan,

I suspect you are correct. The cost of Dodd Frank is in the compliance. Of course there are parts of the law that make little sense, but for the most part good. Interestingly Christopher Dodd one the bills sponsors got a sweetheart loan from one of the biggest offenders during the Financial Crisis. Motives for sponsorship driven by guilt perhaps. New DOL rules not part of Dodd Frank. DOL has jurisdiction over ERISA rules.

It will be interesting to see what comes out of the next financial crisis. Perhaps the structure of institutional trading, ETFs, failure of Target Date Funds, over aggressive industry trading recommendations?

Igy

Detector Dude,

Sorry, as a Certified Financial Planner I am required to follow the DOL guidelines before they existed. So following the DOL for the past fourteen years.

Igy

What a great call klondike5 made 870 pages and 6000 points on the Dow ago. I wish I had listened to him and pulled all my money out of the market.

Earnings Scorecard: As of yesterday (with 82% of the companies in the S&P 500 reporting actual results for Q4 2016), 66% of S&P 500 companies have beat the mean EPS estimate and 53% of S&P 500 companies have beat the mean sales estimate.

Earnie(ings) FactCheck:

At the close of Q4 2016 S&P 500 non-GAAP EPS was projected to come in at $30.45, marked down from a year earlier estimate nearly $3 lower at $33.35. Currently with 86.6% of companies reported that EPS number has declined to $28.50. Keep in mind we are discussing non-GAAP wihich disguises stock based compensation and failed businesses as non-expenses.

Forward operating earnings for 2017, a non-GAAP number, has been marked down in the last ten months from $135.95 to $130.65, still a likely fantasy number since 2016 is projected to finish closer to $106.

The GAAP numbers show more cracks beneath the surface. The 2016 GAAP EPS should finish under $97 with a year end closing PE above 23 based on 2016 close of 2,238.

So any improvement in EPS since the peak in 3Q 2014 (LTM non-GAAP EPS $114.51 and GAAP EPS $105.96) is non-existent. Earnie or Detector Dude would like you to believe there is reason to pay up for earnings. They have yet to learn the bitter truth that what "you pay" is inversely correlated to "your return."

Igy

Is the only way you feel you can win an argument is by putting words into someone else's mouth? How sad you are.

And I gave actual numbers, not guesses like you.

Earnie wrote:

Is the only way you feel you can win an argument is by putting words into someone else's mouth? How sad you are.

And I gave actual numbers, not guesses like you.

The data you quote are non-GAAP, while the only EPS signed off by the CFO and CEO under penalty of imprisonment are GAAP. That is sad.

No, it's not sad. What's sad is that someone in your position ignores a potentially valuable set of data.

Valuable only to the support your view that the market is not overvalued, while you are more than willing to be complicit in ignoring the sound GAAP EPS reporting required by government regulators. This is what you should not ignore:

http://www.multpl.com/shiller-pe/

Ghost of Igloi wrote:

The data you quote are non-GAAP, while the only EPS signed off by the CFO and CEO under penalty of imprisonment are GAAP. That is sad.

Ghost of Igloi wrote:

Valuable only to the support your view that the market is not overvalued, while you are more than willing to be complicit in ignoring the sound GAAP EPS reporting required by government regulators.

False.

Generally accepted accounting principles (GAAP) are controlled by the Financial Accounting Standards Board (FASB), a nongovernmental entity. The FASB creates specific guidelines that company accountants should follow when compiling and reporting information for financial statements or auditing purposes. GAAP is not law, and there is nothing illegal about violations of its rules unless those violations happen to coincide with other laws.

He's so desperate to win an argument that he not only puts words into people's mouths, but apparently he also spews lies. Sad.

Fact checker wrote:

Ghost of Igloi wrote:

The data you quote are non-GAAP, while the only EPS signed off by the CFO and CEO under penalty of imprisonment are GAAP. That is sad.

Ghost of Igloi wrote:

Valuable only to the support your view that the market is not overvalued, while you are more than willing to be complicit in ignoring the sound GAAP EPS reporting required by government regulators.

False.

Generally accepted accounting principles (GAAP) are controlled by the Financial Accounting Standards Board (FASB), a nongovernmental entity. The FASB creates specific guidelines that company accountants should follow when compiling and reporting information for financial statements or auditing purposes. GAAP is not law, and there is nothing illegal about violations of its rules unless those violations happen to coincide with other laws.

http://www.investopedia.com/ask/answers/020915/who-enforces-gaap.asp

FALSE

What you quoted has nothing to do with what I was referring to.

As a result of the accounting scandals of the Tech Bubble years came legislation (Sarbon Oxley) limiting the use of pro forma or non-GAAP accounting. Furthermore, the law required CEOs and CFOs to sign-off on the quarterly GAAP filings to the SEC as truthful and accurate. Just last summer the SEC once again further delineated the boundaries for the use of non-GAAP accounting in describing company business operations.

Sarbannes Oxley, my only sad error to my aging memory:

https://www.sec.gov/rules/final/33-8176.htm

Nice try, Igy. You provide no proof which is not surprising since it's ALL LIES!