Corporate profits are tanking

In the last 115 years, only one thing has stopped a profit collapse from leading to recession

Source: Businessinsider.com

“Declining corporate profits as measured by US equity EPS have been closely followed by, or coincided with, a recession 81% of the time since 1900,” Lakos-Bujas wrote in a note to clients this week.

And given where the profit cycle is, Lakos-Bujas said that history says only an outside economic shock has been able to keep the economy out of recession. “The remaining 19% of slumps were followed by a re-acceleration of growth to a higher peak before recession inevitably ended the cycle — though not without some form of stimulus (fiscal, monetary or exogenous),” Lakos-Bujas said.

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