David Stockman on Dyan Ratigan (MUST WATCH TV)

Dylan Ratigan discusses Bush Tax cuts extension with David Stockman including David's reference to Wall Street and our stock market as a Casino.

Comments/editorial courtesy of Zero Hedge as they do it best!

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After recently debunking the economic "recovery's" flagrantly misrepresented employment data, the OMB's David Stockman makes a third appearance in as many months, this time on Dylan Ratigan. And as always, it is a must see: key soundbite:

"We have had a Fed engineered serial bubble, that has created the appearance of wealth, that has caused people to consume beyond their means through borrowing, and that has flushed the income and wealth of our society up to the top, as a result of the Fed turning the financial markets into a casino.

These are pure casinos, they are not capital markets, they are not adding to the productive capacity of our economy, they simply are a bunch of robots trading with each other by the millisecond as a result of the Fed giving them zero cost overnight money, and giving them all kinds of hand signals on what to front-run."

It is almost as if Stockman reads Zero Hedge... And he continues: "The Fed is destroying prosperity by funding demand that we can't support with earnings and productions, causing massive current accounts deficits and the flow of funds overseas and the build up in China, OPEC and Korea of massive dollar reserves which is a totally unsustainable, unsupportable system, and we are coming near the edge of where that can continue to remain stable."

Ironically, Stockman is spot one when he notes that America incurred enough debt to have effectively LBOed itself. The net result, as every PE principal knows all too well, is a husk of an entity, whose most valuable assets have been bled dry.

At this point, the last straw for America will be the inevitable rise in interest rates (at some point over the next five years, the Fed and Treasury will have to sell a combined $5 trillion in debt - that alone will destroy the supply/demand equilibrium and send rates surging) which will result in either debt repudiation or outright bankruptcy. The only good outcome is that the great experiment of LBOing America by the kleptocratic elite is coming to its sad conclusion.

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Nouriel Roubini: U.S. Economy is a "fiscal train wreck"

by John Stonestreet
10/29/10

(Reuters) - The U.S. economy is a "fiscal train wreck" waiting to happen that risks ushering in a period of stagnation featuring by minimal growth, high unemployment and deflationary pressure, U.S. economist Nouriel Roubini wrote on Friday.

In a commentary for the Financial Times, Roubini -- one of the first economists to predict the housing crash in the United States and known as 'Dr Doom' for his pessimistic forecasts -- said fiscal and monetary stimulus had prevented another depression.

But he said that further quantitative easing likely to be announced by the Federal Reserve next Wednesday will have little effect on U.S. growth in 2011, "so fiscal policy should be doing some of the lifting to prevent a double dip recession," he said.

He said the U.S. remains on an "unsustainable fiscal course" and the likely make-up of Congress after elections next Tuesday, in which the Republicans look set for strong gains, virtually takes fiscal reform off the agenda.

"The risk ... is that something on the fiscal side will snap ... The trigger could be a debt rollover crisis in a major U.S. state government," he wrote.

"The worst of the coming fiscal train wreck will be prevented by the Fed's easing. But the risk is (Obama) ... will then preside over ... a Japanese style stagnation, where growth is barely positive, and deflationary pressures and high unemployment linger."

Federal Express Earnings...Oh No! No Green Shoots!

Press Release Source: FedEx Corp. On Wednesday June 16, 2010, 7:45 am

MEMPHIS, Tenn.--(BUSINESS WIRE)--FedEx Corp. (NYSE: FDX - News) today reported earnings of $1.33 per diluted share for the fourth quarter ended May 31. Last year, the company reported a fourth quarter loss of $2.82 per diluted share, including $3.46 per diluted share of charges resulting primarily from the impairment of goodwill and aircraft. Excluding these charges, fourth quarter earnings were $0.64 per diluted share a year ago.

“FedEx delivered strong results in our fourth quarter, thanks to sequential growth in package volume and our ability to leverage our unique global networks to take advantage of a recovering economy,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “We ended our fiscal year a stronger company, and I am confident FedEx is very well positioned for future revenue and earnings growth.”

Full Year Results

FedEx Corp. reported the following consolidated results for the full year:
•Revenue of $34.7 billion, down 2% from $35.5 billion the previous year
•Operating income of $2.0 billion, up from $747 million last year
•Net income of $1.18 billion, up from last year’s $98 million
•Earnings per share of $3.76, up from $0.31 per share a year ago ($3.76 per share excluding the impact of impairment and other charges)

Outlook:

FedEx projects earnings to be $0.85 to $1.05 per diluted share in the first quarter and $4.40 to $5.00 per diluted share for fiscal 2011. This guidance assumes the current market outlook for fuel prices and a continued moderate recovery in the global economy. The company reported earnings of $0.58 per diluted share in last year’s first quarter. The capital spending forecast for fiscal 2011 is $3.2 billion, which includes the expected delivery of six Boeing 777Fs and 16 Boeing 757s, along with investments in information technology, vehicles and facilities in support of the company’s global growth strategy.


Grandpa:Concensus Earnings Estimate from the brightest minds on Wall Street for 2011 is $5.06 per share.This is an OUCH!!!!! Given the company's guidance, FDX could miss by 10+%. Even if they hit their top end estimate, it remains a miss. At 7:00 am CDT, CNBC is already putting on a "happy face" and they will likely burn up a dozen tubes of lipstick by the open.