5

Reasons Why Corporate Profits

Will Decline this Decade

By 50%! 

1. Profits and Profit Margins will Mean Revert: 

Corporate profits as percentage Gross Domestic Product (GDP) mean is 6% historically today it is 12% simply reverting back to the mean is a 50% decline in overall profitability.

2. Globalization is finished:

There is no more sauce – Globalization – for the goose…Globalization has peaked in its profit maximization and when you are on top of the mountain no matter which way you go its down!

3.  Lower and Lower Interest Rates is Now Finished: 

The decline in interest rates that began 9-30-81 with the 10 year Treasury peaking at 15.84% and then dropped to its all time low on 8-4-2020 at 0.52% (10 year T-Bonds) IS NOW FINISHED.  Interest rates are nominalizing in a roller coaster fashion.  The day of sub atomically low interest rates is over; effecting corporations profitability and consumers ability to finance consumption.

4.  Debt Saturation:

Federal, States, local governments are all massively in debt.  Corporate America and John and Jane Doe are in hock up to their eye balls.  This debt binge will take a decade to work down to more manageable levels.  

5. Societal Shift:  Pro business to Pro Labor. 

When then President Ronald Reagan fired the striking air traffic controllers on August 5, 1981 marking the end of the pro labor movement and the beginning of pro business movement.  Currently the U.S. is in the turning phase waiting for a historical making event signifying the change grinding down corporate profits.

DYI