This page at CNBC titled, "Dow Earnings Season Complete" reports in no uncertain terms that Caterpillar (CAT) had a .39 profit in Q1 2009:

It's very clear. The estimate was for .04 so they are reported to have "beat" by 875%.

In fact you can find the REAL earnings data here:

http://www2.standardan...

Click on the "Issue Level Data" tab at the bottom and go to the row for CAT, row 83.

...and you'll see that Caterpillar's earnings were actually -.19 for the quarter. HOW CAN THAT BE?

CNBC has taken it upon themselves (though they certainly are not alone in this) to report operating earnings instead of reported earnings. Reported earnings are what has been used in the past and are what you would be comparing to if you wanted to perform any historical research and yet CNBC didn't even bother to mention that they were using operating earnings.

Bloomber takes this same approach, reporting the P/E ratio of the S&P 500 as 14 or 15 when in fact it is well over 100.

Operating earnings are NOT based on Generally Accepted Accounting Principles and should only be used on an issue-by-issue basis to make judgements about an individual stock's future potential, they should not be used as EARNINGS because they are not earnings and they are not what has been used throughout history. Applying operating earnings to an entire index and then reporting the data as EARNINGS is especially egregous.

An example of operating earnings vs reported earnings: I am moving to a less expensive office in 2 months and my expenses will drop by $3,000 a month at that time. It is reasonable to deduct that cost from my reported earnings to see what my operating expenses will be going forward and to use in estimating my FUTURE profit but it is not reasonable to say that I did not have that expense of $6,000 because I did.

It's also important to note that something you will never see in operating earnings are ADDITIONS of future expenses. For instance, if I were moving to a more expensive office in 2 months you would not see that deducted from current profits. Such inconsistencies, especially when they are institutionalized as they have been for the past decade or two, have always been reversed during a long bear market periods in the stock market to adjust for the intitutionalized lies that we have gotten used to telling oursleves.

IMO, CNBC and Bloomberg are shilling the market and the consequences have been, and will be, devastating as the stock market finds a way to return to a reasonable value regardless of what Bloomberg and CNBC can convince the public of. BTW, none of this could happen without the public accepting it. But I also blame you if you don't do the research that any investor should be doing. In the past decade and over the coming years, you, if you are one of those accepting such obviously bad data, have and will get burned again and again and each time it happens I suggest you look in the mirror when you are looking for someone to blame.

The real data is out there and easier than ever to find; go find it and put it in context or suffer the consequences of ignorance.

LEADING INDICATORS. Three of the ten indicators that make up The Conference Board LEI for the U.S. increased in March. The positive contributors — beginning with the largest positive contributor — were real money supply*, interest rate spread, and the index of consumer expectations. The negative contributors — beginning with the largest negative contributor — were building permits, stock prices, index of supplier deliveries (vendor performance), average weekly manufacturing hours, average weekly initial claims for unemployment insurance (inverted), and manufacturers' new orders for nondefense capital goods*. Manufacturers' new orders for consumer goods and materials* held steady in March.

The Conference Board LEI for the U.S. now stands at 98.1 (2004=100). Based on revised data, this index decreased 0.2 percent in February and decreased 0.2 percent in January. During the six-month span through March, the leading economic index decreased 2.5 percent, with two out of ten components advancing (diffusion index, six-month span equals 20 percent).

ECRI shows a slight increase in their Leading Economic Indicators at www.businesscycle.com/...

This type of data is vital for any investor or trader and should be used in proper context.

http://www2.standardan...

"341 issues (76.15% mkt val) rptd: initial good reports fading, actuals are 2% behind of estimates, and -36.1% behind last year...

Sales down 12.8 with 89 beating last year and 246 falling short

As Rpt EPS for 12 Mo Sep,'09 estimated to be negative ($-1.83 EPS) - first time in index history"

This confirms what I had been noticing as earnings were being reported over the past weeks; revenues were down by massive amounts (typically 20%) as were earnings but the fact that analysts had finally gotten the earnings estimates close was being used as good news by the pollyannas.

This is a(nother) tought time to remain bearish as some LEI's seem to be suggesting we are coming out of the recession but there is simply no way that we are through the tough times given that housing has yet to bottom, the consumer is far from delevaeraged, the banks are far from deleveraged, our government is in debt up to its corrupt eardrums, and the stock market is still overpriced.

From my POV, however, I see this as one sure thing. The market is overbought and weakening, as we have seen before and all the wise old owls I listen to say that experience (along with Dow Theory) tells them that there is more correction to come from the stock market. The young, brash pollyannas are excited and buy more and more each day, almost as if it were 2000 all over again. Yes, we are coming closer to a great buying opportunity on the long side (hopefully) but that is likely a ways off as new dark clouds become visible on the horizon.

My view is that the overall market has significantly farther to go to revalue itself but that tech and the QQQQ will be the strongest during this period and once the true rebound eventually comes.

Author positions: SDS, SRS, PURE, LAD

--Fred