The Wall Street "Spring"

Apparantly flowers are blooming down the middle of Wall Street. The financiers are finding spring in the air, so the market is booming... up nearly 30% over the last six weeks. What a wonder!

I'm a suspicious kinda guy. I ran across this posting by John Mauldin on Barry Ritholtz's The Big Picture and I start wondering...

If you look at earnings estimates for 2009, that is what is suggested. Bloomberg reports that profits at S&P 500 companies probably fell 38% on average in the first quarter. The stretch of quarterly declines is the longest since at least the Great Depression, data compiled by S&P and Bloomberg show.

Earnings may drop 31% in the second quarter and 18% in the next before gaining 74% in the last three months of the year, analysts predict. Banks are projected to account for all of the rebound in the final quarter. Without financial companies, the gain turns into a 5% decline, the data show.

That's odd. The market is up because the financial stocks are projected to be up big time in the 4th quarter of 2009? Can you believe that?

Well, Mauldin shows you how much you can believe estimates of earning by these Wall Street analysts. Here's how their numbers for the S&P 500 started big, then melted away...

With that kind of track record, how can anybody waste time listening to "estimates" from the Wall Street analysts?

Go read the whole post and be entertained by how their "estimate" for the 2009 S&P 500 earnings have been "adjusted" over the last 12 months.

Here's Mauldin's caution:

The projections of many market analysts assume that we will have something that will look like a normal recovery. I have objected that that could be a very bad assumption, since we are not having a normal recession. This is already a very lengthy recession, and is just going to get longer. As I will note below, there are reasons to think we could see a mild recovery late this year, only to dip back into recession next year.

Oh... and spring is showing up everywhere. Here is the Wall Street Journal's tribute to the "green shoots" of the stock market. You really have to go take a peek, they give you the the wisdom of Chance, the gardiner, from the movie Being There as their tribute to the wisdom of this spring's sudden blooming of the stock market!