It’s been a while since I posted, which doesn’t mean there wasn’t anything interesting going on.  I just got lazy…these things happen.

Anyway, we are heading into the bulk of the earnings reports, which should either solidify the recent run up or start to pound it back into its dank little hole.  I’m voting for the pounding.  Why?

Banks are making numbers up again.  Goldman Sachs switched reporting years, which effectively allows them to hide December 2008.  Guess what month they took their huge hits?  DECEMBER!  BoA and many others are now freed of mark to market and are suddenly finding their assets “appeared” to be undervalued.  Nice to see we are back to short-term thinking from our vaunted corporate leaders (See Bank Profits Appear Out of Thin Air - NYT, for more info).  How often does Lucy have to pull the football from Charlie Brown before he learns?

S&P 500 earnings have had their largest percentage drop EVER (Chart at Big Picture)!  The drop is larger than the Great Depression and far faster and steeper.  The line is so steep it is bending back in on itself.  This does not seem to have EVER happened in the past, though it is a little hard to be sure due to the clutter on the graph.  Black swans within black swans?  Scary.

Also, foreclosures are still increasing and have moved into the higher end market (Foreclosures: Mov’n On Up - Calculated Risk).  Along with the accompanying link, I have seen a significant number of comments, on various blogs, from other areas of the country, noting the difficulty in the upper end market.

Ok, that’s enough bad news for now, anymore and I might have to get closer to 80% or 90% cash.