NO CHIT!@
Are Profit Margins Really Plunging? Goldman Responds To Zero Hedge
To answer this question, ten days ago we showed the one measure of corporate profitability that avoids various non-GAAP adjustments and one-time addbacks. We referred to the data set tracking corporate profitability without the benefits of non-GAAP adjustments, which is reported by the BEA as Corporate profits with inventory valuation (IVA) and Capital Consumption (CCAdj) adjustments. Such operating profits, or profits from current production, are the purest form of corporate earnings since this series puts all firms on the same accounting framework - it avoids non-GAAP adjustments - and the profit numbers are not adjusted for the number of shares outstanding.
And here, something stunning emerged when looking at corporate profits (after tax with IVA and CCAdj) as a % of US GDP: these have not only tumbled to the lowest level this decade, but are in fact lower than where they were when the US was sliding into the 2007-2009 financial crisis and when the US entered the 2007 recession!
Ask any Wall Street analyst why stocks are at all time highs and the immediate answer will be because adjusted corporate profits and income are similarly at or near all time highs, which means that the multiple needed to justify an S&P around 3,150 is not all that egregious (technically it is, as DB's Binky Chadha noted last week when he pointed out that the S&P 500 is trading at a multiple that’s higher than any time since the dot-com era, except for a few months in late 2017 and early 2018. As Chadha wrote , "the S&P 500 trailing multiple has historically mostly stayed in a range between 10x-20x. So current valuation at 19.1x is clearly at the higher end of the historical range. Indeed, over the last 85 years, outside the late 1990s equity bubble, the multiple remained below current levels around 90% of the time.")
LOT MORE,,,,,,,,,,,,,,,,
http://www.zerohedge.com/markets/are-profit-margins-really-plunging-goldman-responds-zero-hedge?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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