Whitehawk's  Instablog

Send Message
Trader, investor, researcher, writer. I am also on a mission to educate people on economics and to campaign against the Federal Reserve, a monetary cartel.
My company:
My blog:
  • Corporate Profits At An All-Time High: Sustainable? 0 comments
    Feb 7, 2013 8:48 PM

    (click to enlarge)Corporate Profits After Tax

    This series of U.S. corporate profits after tax has made headlines for the last few quarters, and is partially responsible for driving U.S. equity markets higher. Among the reasons for the climb: companies have been able to drive productivity through cost cutting measures (bottom line), whereas average revenue growth has been flat (top line). [See link to Sageworks Private Company Indicator for 12-month and 5-year charts on average annual sales growth.] Is this sustainable, given rising tax rates, regulatory costs, government spending and inflation? The Fed has targeted higher inflation through monetary stimulus, which has in turn throttled the U.S. equity markets higher. Verdict: Unsustainable, unless companies can grow the topline, but this will likely require a rollback of tax rates, regulatory costs and crowding out government spending, not to mention a non-punitive modification to the corporate repatriation tax.

    I'd add that wages/GDP is at a multi-decade low, after peaking in 1970:

    (click to enlarge)

    It is no surprise why this has occurred: wages are suppressed by ever increasing government fiscal, regulatory and labor policies and the inflation caused by the monetary policies that "provide cover."

Back To Whitehawk's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • Advice to APSO.OB - This company is in bankruptcy, after massive insider selling and mismanagement by previous management. STAY AWAY.
    Dec 1, 2009
More »

Latest Comments

Most Commented
  1. Fed Watch 2013 ( Comments)
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.