Bottom Pickers And Other Rude Acts (cont.)

Above from John Maudlin-

From David Rosenburg at Bank of America/ML:
"...we continue to hold the view that investors are confusing an ‘improvement’ relative to the post-Lehman shock when the economy was literally falling off a cliff to an actual
improvement that would lead us to believe that a renewed upturn is at hand."

TW: The market is up from its lows, but were they new lows or THE low? Who knows. But our guy David Rosenburg remains skeptical and the earnings estimates keep changing in one direction- down. The above estimates are reported earnings as in the real earnings (or as real as they are given the exigencies of GAAP etc.). You may see higher estimates based on "operating" earnings which do not reflect "extraordinary" items. In normal times operating and reported earnings differ (operating higher) but not by much. In these extraordinary times though, not surprisingly extraordinary items are rocketing upward creating a large gap (50-100%) between the two types of earnings. In normal times it did not matter too much whether a pundit based her analysis on operating or reported earnings, now of course it matters greatly. Not surprisingly the bulls are throwing around P/E multiples using "operating" numbers, the bears tend toward the "reported".

At current prices the P/E for 2009 using "operating" earnings is about 30, using "operating" more like 15-20ish. Both numbers in this environment seem pretty high (long-term average being about 15). We shall see.