3 replies to this topic

[The End]

Over the past few years corporate America has refinanced their debt. They called away all the old, higher coupon paper and they issued much lower yielding debt. As they were doing this, the amount of interest saved went to the bottom line and since we have seen really no top line growth, over the past year or so, and most of the aforementioned debt and the benefits of reducing the interest on that debt has been realized, where is the expected 20% growth in analyst's earning expectations going to come from?

[ogm]

The "expected growth" isn't going to come. Salaries and employyes have been cut to the bone. All cost cutting efforst have been done. Margins are at historical and unsustainable highs, and with top line growth non-existant, profit growth will not materialize. The whole bet was that the Fed's activities will generate economy recovery. And they don't and they won't. And thats why the market is selling and will continue selling as the faith in Fed 's ability to generate any economic growth is lost.

Edited by ogm, 27 September 2013 - 12:59 PM.

[pdx5]

Many reasons for corporate profits to grow: 1. People are working more hours! 2 jobs at 29 hours/week= 58 > 40 hours at 1 job! 2. Obamacare will boost jobs ! All tax increases under Obamacare will be retracted by executive order by the president! No more 3.8% tax on home sales, medical devices etc! The president will eliminate the individual mandate to buy approved insurance policies! 3. The government regulations on businesses will be eliminated! EPA will deliver meals on wheels to seniors instead of onerous fines on businesses! IRS will ignore all underpayments of taxes by individuals, small businesses. 4. We don't need oil/gas from Canada! Not building the Keystone pipeline line will save a whole lot of money to taxpayers! We will all be driving solar cars. Who needs that smelly oil anyway! 5. Syria will soon send all its chemical WMD's to US by Federal Express Over night delivery! Peace will breakout in Middle-east! Jews and Muslims will will dance Hava Nagila and celebrate! Libya will stabilize, Egypt will covert to peaceful democracy, Hezbollah will convert to Christianity! 6. Manufacturing in China will collapse and US will again become manufacturing monopoly similar to post WW II. 7. India will make it illegal to accept business from out sourcers. All technical, medical, accounting and legal outsourcing will be done internally in US creating millions of jobs. 8. All these jobs created means US consumers will go on a buying spree and boost corporation profits. Note: Please do not believe any of above and please recognize my sarcasm.

Edited by pdx5, 27 September 2013 - 01:40 PM.

[gm_general]

Fed flow of funds report came out Wednesday, it seems total debt is up to 57.66 trillion dollars (a new high), with corporate debt continuing to climb to 13.10 trillion (also a new high).