Gary Shilling on deleveraging

Steve Forbes interviews Gary Shilling, and it warrants a listening. 

You find some familiar themes put differently:

• an expectation sustained low growth induced by deleveraging
• risk on trade & asset quality
• concern about  the dis-connection between monetary policies and real economies that creates a growing risk of chaotic re-adjustments 
• concern with and an explanation for the decline in money velocity 

Agree or not with the particulars, and we make no endorsement in that regard, we're in for a long ride... so we have some time to think about loading up on 30 yr zeros.

Update on Saturday, March 16, 2013 at 08:18AM by hb

Forward P/E Ratio for S&P 500 was also below long-term averages on October 9, 2007

"The estimated earnings growth rate for Q1 2013 is -0.6% this week, unchanged from last week’s growth rate. On December 31, the Q1 earnings growth rate for the index was 2.2%. Nine of the ten sectors have witnessed a decline in earnings growth rates since that date, led by the Materials, Consumer Discretionary, and Information Technology sectors. The Financials sector is the only sector that has not recorded a decrease in expected earnings growth since the start of the quarter.

Part of the reason for the drop in expected earnings growth for the index is the high percentage of negative guidance issued by S&P 500 companies for Q1. Overall, 83 companies have issued negative EPS guidance for Q1 2013, while 25 companies have issued positive EPS guidance. Thus, 77% of the companies in the index that have issued EPS guidance have issued negative guidance. This percentage is well above the 5-year average of 61%."