With Boehner/Obama collapsing, and little expected over the weekend, I suspect the debt ceiling will not be raised in time. I expect ratings downgrades for US debt as well.
Have we returned to a bull market in complacency?
General Electric's industrial organic sales growth in second quarter 2011 was 3% vs. a 5% consensus estimate. Margins were soft during the quarter.
Recent quarterly taxes rates for Microsoft and GE are below what the average American and many small businesses pay.
GE's 'beat' was juiced by a couple of one-time items. But it was less of a beat than it appears, as earnings were buoyed by:
1. a lower tax rate (19.7% vs. 20.7%) that added a half a penny (echoing yesterday's MSFT report in which a substantially lower tax rate caused an apparent "beat"); and
2. contribution from discontinued operations (went from loss of $100 million to a gain of $217 million), a year-over-year positive swing of $317 million -- or about $0.03 a share
Both of these factors combined added $0.035 a share to the bottom line -- accounting for the entire beat to consensus...
