Prieur du Plessis posts the Chart of the Day which shows a 98% decline in real earnings of the S&P since Q3 2007.

This makes it by far the largest decline on record (the data goes back to 1936). “In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative,” said Chart of the Day.

TPC has a good post on Morgan Stanley’s bearish call on the stock market.

In essence, analysts currently expect 2010 record profits in 4 of 10 sectors, record ROE for the S&P 500 and record profit margins.  Just two years out of the worst financial crisis in 75 years and the analysts are calling for all sorts of record setting earnings?  Does that seem far fetched?  It certainly should.

Apparently the tide is turning from setting the very easy-to-beat earnings forecasts of this present earnings quarter to earnings forecasts which will prove impossible to achieve in first quarter 2010 and beyond.