What a way to start the Earnings Season !

http://www.zerohedge.com/news/2012-10-09/alcoa-launches-earnings-season-whimper

Alcoa Launches Earnings Season With A Whimper

Submitted by Tyler Durden on 10/09/2012 16:46 -0400

• Jim Cramer

You've heard the CEO's oracular outlook; you've read the press-release; you've seen Maria Bartiromo flush and the algos stymied in after-hours trading. Now here are the facts:

• *ALCOA CUTS 2012 GLOBAL ALUMINUM DEMAND FORECAST TO 6% VS 7%
• Free Cash Flow: Q3 -$39MM
• Adjusted EBITDA: Q3 $282mm, down 45% from Q2
• Adjusted EBITDA: Q3 2011: $821 MM; Q2 2012: $ 517 MM; Q3 2013: $282 MM
• Adjusted EBITDA Margin Changes: Q3 2011: 12.8%;  Q2 2012: 8.7%; Q3 2012 4.8%
• Total debt: $9,524; Net debt: $8,092; LTM EBITDA $1,875 million; Total Leverage: 5.1x; Net Leverage: 4.3x

and here is the correlation:

and another blast of foul air from Cummins....

Global Growth Reality Hits As Cummins Cuts Guidance And 1500 Jobs

Submitted by Tyler Durden on 10/09/2012 - 17:40Capital Expenditures China Global Economy New York Stock Exchange Reality

CMI is down over 7% after-hours as it seems the 16% cut in Aluminum demand that Alcoa just announced can no longer be ignored. Reality is that Cummins is slashing guidance and cutting jobs in "response to the weakening global economy."

• *CUMMINS TO CUT UP TO 1500 JOBS, LOWERS YEAR REV, EBIT FORECASTS
• *CUMMINS SEES YEAR EBIT ABOUT 13.5%, SAW 14.25%-14.75%  :CMI US
• *CUMMINS PRELIM 3Q REV. ABOUT $4.1B, EST. $4.425B       :CMI US
• *CUMMINS SEES 2012 REV. $17B, SAW $18B, EST. $18.11B    :CMI US

"We continued to see weak economic data in a number of regions during the third quarter increasing the level of uncertainty regarding the direction of the global economy.... Demand in China has weakened in most end markets"

Two words - Priced In?

Buffett's Favorite Bank, Wells Fargo, Sued By US

Submitted by Tyler Durden on 10/09/2012 - 15:23Wells Fargo

Couldn't happen to a nicer crony capitalist's favorite stock:

• U.S. FILES CIVIL MORTGAGE FRAUD SUIT AGAINST WELLS FARGO
• U.S. CLAIMS WELLS FARGO FALSELY CERTIFIED FHA LOANS
• GOVERNMENT SEEKS DAMAGES AND PENALTIES FOR RECKLESS LOANS
• FHA FORCED TO PAY `HUNDREDS OF MILLIONS' FOR DEFAULTED LOANS

Well, Charlie: "Suck it in" (even more than just the recent epic collapse of BYD of course). As for Wells, sorry Warren, but just like gold, you can't really fondle that stock certificate, held by DTCC in proxy, either.