"More than at any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction.From the Asia Times Inner Workings blog:
Let us pray we have the wisdom to choose correctly.
I speak, by the way, not with any sense of futility, but with a panicky conviction of the absolute meaninglessness of existence that could easily be misinterpreted as pessimisim.
It is not.
It is merely a healthy concern for the predicament of modern man."
-Woody Allen, "My Speech to the Graduates" in "Side Effects".
Federal corporate income tax receipts were just posted for December. At $48 billion, they are a little more than half the Dec. 2007 level of $83 billion and the Dec. 2006 level of $84 billion. December is a highly indicative month, and the result is not encouraging.
It is very hard to seasonally adjust an extremely jumpy series like corporate profits. Using the seasonal adjustment functions in Eviews, I come up with the following:
Monthly Corporate Tax Receipts, Seasonally Adjusted
Corporate tax receipts, a reasonably indicator of where profits are, appear to have fallen by about half on a GDP basis, and that is before we have seen most of the real economic damage.
There just isn’t any reason to be in equities, as I have been arguing since the inception of this blog. Equity investors have ignored Barton Biggs, Byron WIen, and the chorus of Wall Street equity strategists and sold the market this year.