"US profits are
growing, companies have underinvested and have no choice but to spend more on
CapEx, and corporations have much less debt than they did during the crisis
thanks to a massive cash build up."
"These are the generic go to explanations by soundbity talking
heads for why the US recovery is gaining traction with US corporations, if not
so much Joe Sixpack, and why companies are still cheap. There is one problem:
they are all wrong.
As SocGen's Andrew Lapthorne shows
conclusively, "US
profits are not growing, companies are over not underinvesting (they may in
fact have overinvested), and corporates are carrying more (not less) net debt
than they were in 2009.
It would appear that many believe the opposite to be true, yet corporate report
and accounts data seems to say otherwise." But hey- stocks are at record
highs, right, and the market is never wrong (except when it is), so who cares."
http://www.zerohedge.com/news/2014-01-17/refuting-biggest-recovery-lies-four-simple-charts
