The Ides of October

The next cliff is on or about the Ides of October. The 2nd quarter "beat expectations" reports that keep being printed are based on draconian firings, not improved revenues. The reduction in first time unemployment is the canary in the coal mine. It is not a bright omen, it is Regan's head spinning spewing all that green stuff.

Here's why (you read it here first): With no consumer demand, 2nd quarter earnings were propelled by firings. Now that there's few left to fire, first time unemployment is diminishing. This is not a good thing for the "calf market" we're in. It means that this quarter will be characterized by: falling revenue (since there is still no consumer) and no one left to lay off. Thus, diminishing revenue and no more costs to cut. 3rd quarter reports will be devastating. The Great Depression II starts then.

Roubini owes me.