Great to see you here. Hoyas are always welcome. I don’t disagree with anything you’ve said. My experience has always been that you fixed income guys are always a bit more rationale than the rest of the market.

With regards to 2Q earnings, my preliminary numbers are showing earnings that could be relatively easy to beat assuming the estimates stay where they are. That doesn’t mean the long-term outlook is good, however. I continue to see weak revenue trends and margin contraction across the board. The visibility is truly horrific as you said. In the near-term though, the expectations look beatable.

Nice comments. I hope to see you around here more often.

I’m a first time visitor and a fellow Hoya MBA (94′). I suspect like a lot of other new unique visitors I followed Joe’s link from Clusterstock.

For the last fifteen years I’ve worked on the buyside managing institutional EM equity, EM debt and global private placement portfolios; in other words, I’ve seen the horror and had my fair share of meetings with sellside analysts, economists and strategists. I agree completely with your characterization of managements’ ability to manage sell side analysts’ expectations.

With respect to 2Q09 earnings I’m less willing to make a definitive call; there is less visibility today than at almost any other time in my career. Nonetheless while I’m uncertain about the 2Q09 I’m really less sanguine about 2H09; it seems on this point we agree.

Earnings matter and it’s unlikely that profitability will continue to be driven by squeezing COGS and SG&A or by deferring capital investment. In the last six months, on the private side, I’ve seen all three occurring and yet firms in a wide variety of sectors and in a wide variety of markets all over the world are still having difficulty meeting privately negotiated leverage and coverage covenants.

The financial risk profile of the US consumer has deteriorated significantly, lenders are less generous and, as a result, consumption as a percentage of GDP must revert toward the ~63% historical average.

Perhaps I’ve spent too much time managing fixed income and have become too risk averse; the glass is always half full. In this market trying to trade earnings expectations is too cute for me.

If we’re beginning to see some earnings stabilization we’ll begin to see more and more earnings beats. The analyst community in general is very poor at guessing future earnings. It’s important to note that this isn’t necessarily sign that a new bull market is ahead.