Here is the argument: if you are already married because you married someone attractive that you kind of liked, it makes it more difficult to say yes to the woman of your dreams when she magically appears out of nowhere.... I know this because I had the fun of calling off my engagement while my fiancé was buying her wedding dress because I simply didn't wait for the woman of my dreams.... same thing with real estate or any other asset.. if you buy a house that seems like a good buy, when that dream house shows up at a remarkable price you are already stuck with a cost basis relationship that you don’t like for a swap
Here is the argument: if you are already married because you married someone attractive that you kind of liked, it makes it more difficult to say yes to the woman of your dreams when she magically appears out of nowhere.... I know this because I had the fun of calling off my engagement while my fiancé was buying her wedding dress because I simply didn't wait for the woman of my dreams.... same thing with real estate or any other asset.. if you buy a house that seems like a good buy, when that dream house shows up at a remarkable price you are already stuck with a cost basis relationship that you don’t like for a swap
"It's already baked into the cake." @DawgsCanDance / @godawgst - is that a Fin Tech wiz bang term? I'm not familiar with the idea. I don't bake cakes.
"I've been saying this since the 80s and early 90s ...."
So, I stopped listening right about there. If I pull almost anything out of my ass, whether it comes true or not in 30 to 40 years is not all that intellectually thought-provoking. He's been saying what since the 1980s? That there's been "no economy"? That it's been dead? Seriously? Who is this guy?
Someone make the case for the following postulate: the economy has been dead since 1985 because demographics and life support. You've got the floor brave warrior.
I don't know what to do with what this guy's saying. I'm not selling off my equities based on that little interview. There might be reasons to do it; but not this guy.
Talk me out of it. Or into it. Or whatever. @Baseman can explain it; but it appears he's run out of days to kill.
Yah well no kidding... and its not happening... -70% for the stock market is never happening ~ his point that the market is the most over valued since the 30's is valid however so its possible to see -30 to -50 as an outside number but the big numbers like -50 happen as a result of a total liquidity crash. Its conceivable but not likely. The real point from my perspective is that the market was meaningfully overvalued last February ~ trading at the highest multiple of earnings revenue and cash flow since the 30's with a below average trajectory of those same metrics. In theory therefore the equity market is now geometrically overvalued because 25-35% of the economy is suffering an intermediate term cash flow crash, and corporate debt has risen dramatically which degrades margins considerably. So, in my view -30% is a reasonable downside risk support level for the intermediate term
-40-50% for real estate is also a complete fairy tale... My point has been that the expectation of using real estate as an ATM is over because its a given that the reversal of the interest rate level of affordability is now going the wrong way longer term. Sure -20 to -30 can happen in pockets and moments in time due to liquidity issues for sellers, but that is always true.
"It's already baked into the cake." @DawgsCanDance / @godawgst - is that a Fin Tech wiz bang term? I'm not familiar with the idea. I don't bake cakes.
"I've been saying this since the 80s and early 90s ...."
So, I stopped listening right about there. If I pull almost anything out of my ass, whether it comes true or not in 30 to 40 years is not all that intellectually thought-provoking. He's been saying what since the 1980s? That there's been "no economy"? That it's been dead? Seriously? Who is this guy?
Someone make the case for the following postulate: the economy has been dead since 1985 because demographics and life support. You've got the floor brave warrior.
I don't know what to do with what this guy's saying. I'm not selling off my equities based on that little interview. There might be reasons to do it; but not this guy.
Talk me out of it. Or into it. Or whatever. @Baseman can explain it; but it appears he's run out of days to kill.
Yah well no kidding... and its not happening... -70% for the stock market is never happening ~ his point that the market is the most over valued since the 30's is valid however so its possible to see -30 to -50 as an outside number but the big numbers like -50 happen as a result of a total liquidity crash. Its conceivable but not likely. The real point from my perspective is that the market was meaningfully overvalued last February ~ trading at the highest multiple of earnings revenue and cash flow since the 30's with a below average trajectory of those same metrics. In theory therefore the equity market is now geometrically overvalued because 25-35% of the economy is suffering an intermediate term cash flow crash, and corporate debt has risen dramatically which degrades margins considerably. So, in my view -30% is a reasonable downside risk support level for the intermediate term
-40-50% for real estate is also a complete fairy tale... My point has been that the expectation of using real estate as an ATM is over because its a given that the reversal of the interest rate level of affordability is now going the wrong way longer term. Sure -20 to -30 can happen in pockets and moments in time due to liquidity issues for sellers, but that is always true.
"It's already baked into the cake." @DawgsCanDance / @godawgst - is that a Fin Tech wiz bang term? I'm not familiar with the idea. I don't bake cakes.
"I've been saying this since the 80s and early 90s ...."
So, I stopped listening right about there. If I pull almost anything out of my ass, whether it comes true or not in 30 to 40 years is not all that intellectually thought-provoking. He's been saying what since the 1980s? That there's been "no economy"? That it's been dead? Seriously? Who is this guy?
Someone make the case for the following postulate: the economy has been dead since 1985 because demographics and life support. You've got the floor brave warrior.
I don't know what to do with what this guy's saying. I'm not selling off my equities based on that little interview. There might be reasons to do it; but not this guy.
Talk me out of it. Or into it. Or whatever. @Baseman can explain it; but it appears he's run out of days to kill.
1. regarding corporate debt, is your point here that having to finance through the liquidity short-falls means interest expense that cuts into operating margin? one note, if you have investment grade ratings, you can borrow for almost as little as a 30-year mortgage. the last debt offering I did in early 2020 we closed a 3 and 5/8s. And we're not a AAA issuer by any means (but still investment grade).
2. what did you make of his seemingly bizarre comments that he has been warning of some fundamental flaw in our economy since the 80s? do you agree that going back that far to point something out is almost too abstract to matter? is he saying that the economy has not generated any value since the 80s? that there's been no real economic growth? seems like a preposterous position to take. and even if it were not, how can you take something that by your own estimation has been going on for 30+ years and NOW you know precisely (or close to precisely) when it's going to blow up?
he came across to me like a charlatan. I'm not shooting the messenger ... I can take bad news. But this was one of the more bizarre "end of the world as we know it" pitches I've ever seen.
1. regarding corporate debt, is your point here that having to finance through the liquidity short-falls means interest expense that cuts into operating margin? one note, if you have investment grade ratings, you can borrow for almost as little as a 30-year mortgage. the last debt offering I did in early 2020 we closed a 3 and 5/8s. And we're not a AAA issuer by any means (but still investment grade).
2. what did you make of his seemingly bizarre comments that he has been warning of some fundamental flaw in our economy since the 80s? do you agree that going back that far to point something out is almost too abstract to matter? is he saying that the economy has not generated any value since the 80s? that there's been no real economic growth? seems like a preposterous position to take. and even if it were not, how can you take something that by your own estimation has been going on for 30+ years and NOW you know precisely (or close to precisely) when it's going to blow up?
he came across to me like a charlatan. I'm not shooting the messenger ... I can take bad news. But this was one of the more bizarre "end of the world as we know it" pitches I've ever seen.
Ok, so I will play... I apologize in advance for the length of the following, there is simply no way to convey the following in a brief discussion.
So I get where he is coming from actually... he isn't crazy, has been around forever and is adding things up in a cumulative fashion to clinically reach his conclusions... our conclusions are not necessarily the same but I do understand where he is coming from. As briefly as I can state it without a lot of supporting documentation, I think that what he is referring to is the following... by the way, its obvious that every one of the following statements is subject to argument for sure ~ I'm going to set that aside and simply lay out the argument for discussion purposes. Those reading this can feel free to tee off as desired.
1. Every economic growth cycle has an engine which drives growth and its normally a number of composite combinations that are required to drive above average growth.
For perspective purposes I will lay out the following scenario for illustration purposes... I used to follow several hundred growth companies in the 80's, all of which had a 10- 20 year history of above average growth with very little variation ~ it was amazing ~ they appeared to grow their business like clockwork. The "formula" was Growth of revenue of 10-14% per year [which then was two times the average], EPS of 16% + and profit margins that were 1 1/2 to 2 times higher than the average company. I literally followed 300 companies across a myriad of diverse industry groups like that, and cut it off at that level because that was enough companies to suit my needs.
The vast number of high growth rate industry groups and the variety and depth of the list went on and on ~ these myriads of companies were acknowledged as being some of the top companies in the world. They operated with a proprietary "most admired companies" formula for how they grew their business model of course, but there were underlying themes that were similar. Briefly stated, the thought process "formula" was a cornerstone combination of factors which stressed that innovation, developing new markets + effective research and development were the key to above average growth ~ Models that projected that 35% of revenue and profitability 2-3 years from now would be coming from new markets, new distribution relationships, new technology , new products and research development were the hallmark of business planning for the highest growth rate companies.
2. These companies were the usual well known blue chips like Pepsi, Proctor and Gamble, and 3M types of long term above average companies plus the incredible diversity of industry group names in Newspapers, Media production and distribution, Grocery stores, Pharmaceuticals, Food Product Groups, Micro Computer Hardware Technology, Software, Retail, Restaurants, Air Freight, Transportation and Trucking, Energy & Natural Resources, Dairy, Ice Cream & Beverages, Fashion, Medical Supply, Hospitals, Scientific Instruments, Aerospace & Defense Electronics, Air Gas and Specialty Chemicals, Flavor and Fragrances, etc, etc..
3. At that moment, we were the envy of the world because of the hugely diverse and multiply layered industry groups that were the engine of our economy. In the late 80's when I compared our industry groups to those of Europe and Asia, the shear number and diversity of US major companies and industry groups that were successfully competing and growing their business was 3-5 times greater than competing economies. The contrast with Europe was particularly staggering.
The contrast was this: the European and Asian Model then was dominated by Mega corporations that were vast conglomerates that had swallowed up their competition, which over time had killed their job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect was to reduce the breadth of product offerings, reduce overall GDP, and ultimately make their economy less vibrant and over time less competitive.
Flash forward to today and think back to the change point of the late 80's when the change of US Business culture began to really take hold... CFO "efficiency experts" fell in love with the idea that they could just increase their growth rate though buy outs, mergers and acquisitions and stock buy back programs ~ a process seemingly so much simpler and predictable.
They could geometrically grow the size and scale of the company, achieve efficiencies, reduce pricing pressures, increase profit margins, increase key product market share and build barriers to entry ~ on the surface of it, what is not to like?
The problem is that as a result, we have since turned into the European model of mega corporations that have all of the same problems as were listed above: vast conglomerates that have swallowed up their competition, which over time has killed our job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect is to reduce the breadth of product offerings, reduce "middle class" mid management good paying jobs, reduce overall GDP, and ultimately make our economy less vibrant and over time less competitive.
This is not an incidental impact: Simply put, the problem is that the animal is eating its own tail ~ half of the fortune 2000 companies listed in the year 2000 are now no longer in existence. And actually, the effect is worse than that ~ the consolidation that has taken place has gutted competition in so many industry groups that it has created a rolling crash in the growth rate of 1/2 of the US industry groups ~ the barrier of entry which has resulted from the new oligopoly status of more than half of the major industry groups has killed the spirit of innovation, and as a result the growth rate of earnings, revenue and net income is half of what it was in 2000 ~ meanwhile corporate debt has risen considerably.
Of course there are bright spots, however the issue is the overhang of the fiscal drag on the economy ~ coupled with the end of a long cycle of lower interest rates, the end of real estate ATM feature, the end of the FED juicing the economy with stimulus, the reality of the pending substantial increase in state and federal taxation for individuals, the impact of higher Corporate taxation, and the resulting historically high valuation of the securities market leads many to believe that the party is over, and that a substantial correction is pending [whenever that is].
1. regarding corporate debt, is your point here that having to finance through the liquidity short-falls means interest expense that cuts into operating margin? one note, if you have investment grade ratings, you can borrow for almost as little as a 30-year mortgage. the last debt offering I did in early 2020 we closed a 3 and 5/8s. And we're not a AAA issuer by any means (but still investment grade).
2. what did you make of his seemingly bizarre comments that he has been warning of some fundamental flaw in our economy since the 80s? do you agree that going back that far to point something out is almost too abstract to matter? is he saying that the economy has not generated any value since the 80s? that there's been no real economic growth? seems like a preposterous position to take. and even if it were not, how can you take something that by your own estimation has been going on for 30+ years and NOW you know precisely (or close to precisely) when it's going to blow up?
he came across to me like a charlatan. I'm not shooting the messenger ... I can take bad news. But this was one of the more bizarre "end of the world as we know it" pitches I've ever seen.
My answer is:
Ok, so I will play... I apologize in advance for the length of the following, there is simply no way to convey the following in a brief discussion.
So I get where he is coming from actually... he isn't crazy, has been around forever and is adding things up in a cumulative fashion to clinically reach his conclusions... our conclusions are not necessarily the same but I do understand where he is coming from. As briefly as I can state it without a lot of supporting documentation, I think that what he is referring to is the following... by the way, its obvious that every one of the following statements is subject to argument for sure ~ I'm going to set that aside and simply lay out the argument for discussion purposes. Those reading this can feel free to tee off as desired.
1. Every economic growth cycle has an engine which drives growth and its normally a number of composite combinations that are required to drive above average growth.
For perspective purposes I will lay out the following scenario for illustration purposes... I used to follow several hundred growth companies in the 80's, all of which had a 10- 20 year history of above average growth with very little variation ~ it was amazing ~ they appeared to grow their business like clockwork. The "formula" was Growth of revenue of 10-14% per year [which then was two times the average], EPS of 16% + and profit margins that were 1 1/2 to 2 times higher than the average company. I literally followed 300 companies across a myriad of diverse industry groups like that, and cut it off at that level because that was enough companies to suit my needs.
The vast number of high growth rate industry groups and the variety and depth of the list went on and on ~ these myriads of companies were acknowledged as being some of the top companies in the world. They operated with a proprietary "most admired companies" formula for how they grew their business model of course, but there were underlying themes that were similar. Briefly stated, the thought process "formula" was a cornerstone combination of factors which stressed that innovation, developing new markets + effective research and development were the key to above average growth ~ Models that projected that 35% of revenue and profitability 2-3 years from now would be coming from new markets, new distribution relationships, new technology , new products and research development were the hallmark of business planning for the highest growth rate companies.
2. These companies were the usual well known blue chips like Pepsi, Proctor and Gamble, and 3M types of long term above average companies plus the incredible diversity of industry group names in Newspapers, Media production and distribution, Grocery stores, Pharmaceuticals, Food Product Groups, Micro Computer Hardware Technology, Software, Retail, Restaurants, Air Freight, Transportation and Trucking, Energy & Natural Resources, Dairy, Ice Cream & Beverages, Fashion, Medical Supply, Hospitals, Scientific Instruments, Aerospace & Defense Electronics, Air Gas and Specialty Chemicals, Flavor and Fragrances, etc, etc..
3. At that moment, we were the envy of the world because of the hugely diverse and multiply layered industry groups that were the engine of our economy. In the late 80's when I compared our industry groups to those of Europe and Asia, the shear number and diversity of US major companies and industry groups that were successfully competing and growing their business was 3-5 times greater than competing economies. The contrast with Europe was particularly staggering.
The contrast was this: the European and Asian Model then was dominated by Mega corporations that were vast conglomerates that had swallowed up their competition, which over time had killed their job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect was to reduce the breadth of product offerings, reduce overall GDP, and ultimately make their economy less vibrant and over time less competitive.
Flash forward to today and think back to the change point of the late 80's when the change of US Business culture began to really take hold... CFO "efficiency experts" fell in love with the idea that they could just increase their growth rate though buy outs, mergers and acquisitions and stock buy back programs ~ a process seemingly so much simpler and predictable.
They could geometrically grow the size and scale of the company, achieve efficiencies, reduce pricing pressures, increase profit margins, increase key product market share and build barriers to entry ~ on the surface of it, what is not to like?
The problem is that as a result, we have since turned into the European model of mega corporations that have all of the same problems as were listed above: vast conglomerates that have swallowed up their competition, which over time has killed our job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect is to reduce the breadth of product offerings, reduce "middle class" mid management good paying jobs, reduce overall GDP, and ultimately make our economy less vibrant and over time less competitive.
This is not an incidental impact: Simply put, the problem is that the animal is eating its own tail ~ half of the fortune 2000 companies listed in the year 2000 are now no longer in existence. And actually, the effect is worse than that ~ the consolidation that has taken place has gutted competition in so many industry groups that it has created a rolling crash in the growth rate of 1/2 of the US industry groups ~ the barrier of entry which has resulted from the new oligopoly status of more than half of the major industry groups has killed the spirit of innovation, and as a result the growth rate of earnings, revenue and net income is half of what it was in 2000 ~ meanwhile corporate debt has risen considerably.
Of course there are bright spots, however the issue is the overhang of the fiscal drag on the economy ~ coupled with the end of a long cycle of lower interest rates, the end of real estate ATM feature, the end of the FED juicing the economy with stimulus, the reality of the pending substantial increase in state and federal taxation for individuals, the impact of higher Corporate taxation, and the resulting historically high valuation of the securities market leads many to believe that the party is over, and that a substantial correction is pending [whenever that is].
Comments
. I would have preferred that you used Gonzaga as your example but . . . . . . . . Ouch. . . . . . . I think I realize why you didn't. . . . . . . .
And, this post is weirdly reassuring for someone who might suddenly question the short term future of bank stocks.
70-90% for the stock market
40-50% for RE
Sounds scary.
"It's already baked into the cake." @DawgsCanDance / @godawgst - is that a Fin Tech wiz bang term? I'm not familiar with the idea. I don't bake cakes.
"I've been saying this since the 80s and early 90s ...."
So, I stopped listening right about there. If I pull almost anything out of my ass, whether it comes true or not in 30 to 40 years is not all that intellectually thought-provoking. He's been saying what since the 1980s? That there's been "no economy"? That it's been dead? Seriously? Who is this guy?
Someone make the case for the following postulate: the economy has been dead since 1985 because demographics and life support. You've got the floor brave warrior.
I don't know what to do with what this guy's saying. I'm not selling off my equities based on that little interview. There might be reasons to do it; but not this guy.
Talk me out of it. Or into it. Or whatever. @Baseman can explain it; but it appears he's run out of days to kill.
@RaceBannon
@MikeSeaver
1. regarding corporate debt, is your point here that having to finance through the liquidity short-falls means interest expense that cuts into operating margin? one note, if you have investment grade ratings, you can borrow for almost as little as a 30-year mortgage. the last debt offering I did in early 2020 we closed a 3 and 5/8s. And we're not a AAA issuer by any means (but still investment grade).
2. what did you make of his seemingly bizarre comments that he has been warning of some fundamental flaw in our economy since the 80s? do you agree that going back that far to point something out is almost too abstract to matter? is he saying that the economy has not generated any value since the 80s? that there's been no real economic growth? seems like a preposterous position to take. and even if it were not, how can you take something that by your own estimation has been going on for 30+ years and NOW you know precisely (or close to precisely) when it's going to blow up?
he came across to me like a charlatan. I'm not shooting the messenger ... I can take bad news. But this was one of the more bizarre "end of the world as we know it" pitches I've ever seen.
Gotcha. Reasonable take. Couple questions:
1. regarding corporate debt, is your point here that having to finance through the liquidity short-falls means interest expense that cuts into operating margin? one note, if you have investment grade ratings, you can borrow for almost as little as a 30-year mortgage. the last debt offering I did in early 2020 we closed a 3 and 5/8s. And we're not a AAA issuer by any means (but still investment grade).
2. what did you make of his seemingly bizarre comments that he has been warning of some fundamental flaw in our economy since the 80s? do you agree that going back that far to point something out is almost too abstract to matter? is he saying that the economy has not generated any value since the 80s? that there's been no real economic growth? seems like a preposterous position to take. and even if it were not, how can you take something that by your own estimation has been going on for 30+ years and NOW you know precisely (or close to precisely) when it's going to blow up?
he came across to me like a charlatan. I'm not shooting the messenger ... I can take bad news. But this was one of the more bizarre "end of the world as we know it" pitches I've ever seen.
My answer is:
Ok, so I will play... I apologize in advance for the length of the following, there is simply no way to convey the following in a brief discussion.
So I get where he is coming from actually... he isn't crazy, has been around forever and is adding things up in a cumulative fashion to clinically reach his conclusions... our conclusions are not necessarily the same but I do understand where he is coming from. As briefly as I can state it without a lot of supporting documentation, I think that what he is referring to is the following... by the way, its obvious that every one of the following statements is subject to argument for sure ~ I'm going to set that aside and simply lay out the argument for discussion purposes. Those reading this can feel free to tee off as desired.
1. Every economic growth cycle has an engine which drives growth and its normally a number of composite combinations that are required to drive above average growth.
For perspective purposes I will lay out the following scenario for illustration purposes... I used to follow several hundred growth companies in the 80's, all of which had a 10- 20 year history of above average growth with very little variation ~ it was amazing ~ they appeared to grow their business like clockwork. The "formula" was Growth of revenue of 10-14% per year [which then was two times the average], EPS of 16% + and profit margins that were 1 1/2 to 2 times higher than the average company. I literally followed 300 companies across a myriad of diverse industry groups like that, and cut it off at that level because that was enough companies to suit my needs.
The vast number of high growth rate industry groups and the variety and depth of the list went on and on ~ these myriads of companies were acknowledged as being some of the top companies in the world. They operated with a proprietary "most admired companies" formula for how they grew their business model of course, but there were underlying themes that were similar. Briefly stated, the thought process "formula" was a cornerstone combination of factors which stressed that innovation, developing new markets + effective research and development were the key to above average growth ~ Models that projected that 35% of revenue and profitability 2-3 years from now would be coming from new markets, new distribution relationships, new technology , new products and research development were the hallmark of business planning for the highest growth rate companies.
2. These companies were the usual well known blue chips like Pepsi, Proctor and Gamble, and 3M types of long term above average companies plus the incredible diversity of industry group names in Newspapers, Media production and distribution, Grocery stores, Pharmaceuticals, Food Product Groups, Micro Computer Hardware Technology, Software, Retail, Restaurants, Air Freight, Transportation and Trucking, Energy & Natural Resources, Dairy, Ice Cream & Beverages, Fashion, Medical Supply, Hospitals, Scientific Instruments, Aerospace & Defense Electronics, Air Gas and Specialty Chemicals, Flavor and Fragrances, etc, etc..
3. At that moment, we were the envy of the world because of the hugely diverse and multiply layered industry groups that were the engine of our economy. In the late 80's when I compared our industry groups to those of Europe and Asia, the shear number and diversity of US major companies and industry groups that were successfully competing and growing their business was 3-5 times greater than competing economies. The contrast with Europe was particularly staggering.
The contrast was this: the European and Asian Model then was dominated by Mega corporations that were vast conglomerates that had swallowed up their competition, which over time had killed their job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect was to reduce the breadth of product offerings, reduce overall GDP, and ultimately make their economy less vibrant and over time less competitive.
Flash forward to today and think back to the change point of the late 80's when the change of US Business culture began to really take hold... CFO "efficiency experts" fell in love with the idea that they could just increase their growth rate though buy outs, mergers and acquisitions and stock buy back programs ~ a process seemingly so much simpler and predictable.
They could geometrically grow the size and scale of the company, achieve efficiencies, reduce pricing pressures, increase profit margins, increase key product market share and build barriers to entry ~ on the surface of it, what is not to like?
The problem is that as a result, we have since turned into the European model of mega corporations that have all of the same problems as were listed above: vast conglomerates that have swallowed up their competition, which over time has killed our job market [middle and upper management higher paying jobs in addition to multiply redundant distribution network and product producing workers] through cost cutting efficiencies and reducing the product offering by eliminating products and brands which competed with the surviving companies flagship offerings. The effect is to reduce the breadth of product offerings, reduce "middle class" mid management good paying jobs, reduce overall GDP, and ultimately make our economy less vibrant and over time less competitive.
This is not an incidental impact: Simply put, the problem is that the animal is eating its own tail ~ half of the fortune 2000 companies listed in the year 2000 are now no longer in existence. And actually, the effect is worse than that ~ the consolidation that has taken place has gutted competition in so many industry groups that it has created a rolling crash in the growth rate of 1/2 of the US industry groups ~ the barrier of entry which has resulted from the new oligopoly status of more than half of the major industry groups has killed the spirit of innovation, and as a result the growth rate of earnings, revenue and net income is half of what it was in 2000 ~ meanwhile corporate debt has risen considerably.
Of course there are bright spots, however the issue is the overhang of the fiscal drag on the economy ~ coupled with the end of a long cycle of lower interest rates, the end of real estate ATM feature, the end of the FED juicing the economy with stimulus, the reality of the pending substantial increase in state and federal taxation for individuals, the impact of higher Corporate taxation, and the resulting historically high valuation of the securities market leads many to believe that the party is over, and that a substantial correction is pending [whenever that is].