1 reply to this topic

[iloli way]

For the past couple of years, 40 percent of profits in the S&P 500 have come from financing activities, and financial profits have a long way to fall just to get back to historical averages. Remember, the U.S. economy has been driven by the financial system which has created an unprecedented level of debt. For those of you celebrating when the Dow edged up toward 14,000 and the S&P 500 hit a new record high, you may find the next celebration a long time coming. The recent stock market slide is caused primarily by worries over credit quality and excess leverage. The problems are just beginning.

[dcengr]

Ya I wanna see how those people who use the Fed model accounts for this.. because the forward projected earnings yield on the S&P500 is about to take a punch in the nose...