The major averages begin the week mixed on little real news, consumer credit comes out after the close with expectations for a 13 billion dollar increase.
With 2nd quarter Standard and Poors 500 Index earnings on the books a record number 80% beat expectations. This also marked the 6th consecutive quarter of 72% of firms beating earnings expectations or better, an impressive string of earnings beats. At the sector level Telecom Services, Health Care and Information Technology had the highest percentage of companies beating estimates.
Negative effects of the trade war are only just now starting to hit the tape, unless you’re a farmer. The University of Illinois at Urbana-Champaign Farm Policy News notes that farmers have seen their net income fall as much as 30% in 2018 in the Eastern Uplands and as little as 13% in the Heartland. The region that covers most of California the Fruitful Rim has seen Farm Income fall 22% as a result of the tariffs.
On the tenth anniversary of the Great Financial Crisis it’s hard to note any real change, and in fact we seem to have simply hit the debt reset button. Apparently hoping that it’s going to be different this time. The big national banks are involved with derivatives up to their necks once again. Whilst they pursue their devil may care attitude as the modern untouchables. Substantial fines were levied on the banksters for causing the 2008 crash, no senior, or even middle level, individuals were sued for violating the securities laws. While the number that actually went to jail can be counted on one hand if memory serves. Largely because cases were pursued on a “false statement” basis as opposed to a “conspiracy to commit fraud” basis. The resulting trail of convictions, if you can call them that included deferred prosecution agreements, promises to do better next time and other slap on the wrist arrangements that didn’t require the admission of any wrongdoing or liability. With chapter 3 of Modern American Great Financial Crises about to be written, will see what happens this time. Absent some sort of major public outcry at the banksters egregious and outrageous behavior, I seriously doubt they will be called to account in any meaningful way for their crimes.
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