Are we out of the woods yet or is the worst still to come? There is only so much conjecture that this question can create........Right? Well, it seems since our proverbial collapse in March this question has loomed in both whispers and screams on wall street. Here we are entering November and it seems we are still digesting data to determine whether this question can finally be put to bed or whether it will continue on into the better part of 2010. The problem? A majority of the positive earnings and data from the banks was either manipulated by the government's cash infusion and tax modifications that changed the way in which they realize income and thus pay taxes. As well as, the non banking US companies that have fueled the rally laid off employees and implemented cost cutting techniques to improve their bottom line. Now this is definitely not a bad thing as most of these companies have increased productivity and profitability by improving their efficiency. However, the problem is that there is only so much fat you can trim. You can't keep downsizing and cost cutting to manipulate earnings and keep your stockholders happy.........eventually even the biggest companies run out of employees to fire. So the million dollar question is...........Now that a majority of the manipulation and smoke and mirrors are used up, are earnings next quarter going to plunge and unveil the true catastrophic environment we are in? Or did we buy ourselves just enough time to actually crawl out of the recession and realize "true" growth, albeit probably very small, without the "growth by subtraction" technique or growth by taxpayer infusion? Until then, welcome to life on the fence.........and here's to hoping we get off on solid footing and don't fall off.
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