Lower earnings should stimulate corporations to save or pull back. This is adverse to the market and economy but is a natural force in a regular economic cycle. It seldom reverses until weaker players are culled and poor and inefficient sectors of the economy are thrashed. Those projecting better and better growth year after year should be handed their lunch and told to go do something else.

LOL a lot of those borrowing wouldn't even qualify for subprime. That said, there is certainly a market for lending besides depositing at a bank at close to 0% interest and then having to borrow at 8%. Shouldn't the people owning the capital make some of the money?

Sadly, investors must also look to see whether the dividends and stock buybacks are coming from debt and if the company's earnings and profits aren't falling. There are increasing amounts of companies who have been playing the Federal Reserves glutton on debt, stoke earnings from buybacks and not growth, and implement unsustainable dividends supplied through even more debt not profitability.

The risks in this market are real and substantially greater than what many let on. Stocks are bets on the whole company, not at all like a bond.

Its just as easy to see this as it is to see the drop off of regular individual trade volumes in the US market indexes also showing much of the US market is full of baloney hoping to get investors intro the game to unload on them. What is funny is to watch them try to keep volume up without real trade demand.

Great article and interesting ideas Jeff. Keep on writing about this.

This is absurd, especially given the high cost of things in Europe. The Federal Reserve seems at war with the public it serves trying to get rid of currency to force everyone to deposit dollars to make negative rates work. Europeans should throw a fit about this as well as discussions of negative rates in their country as should Japan.

Sadly I stopped trusting yelp the second they went public. Worse many good restaurants got lambasted by them for not paying money and bad restaurants that paid got positive reviews. It is only a matter of time before consumers figured out their game and stopped trusting them. They sold their souls.

Good read and a good article. The Fed's action make waiting for the norm impossible as does getting us out of a downturn in any normal way.

With $15 an hour wage laws being passed it is no wonder why manufacturing jobs are sagging. Sadly, to be globally competitive either the dollar must drop significantly or manufacturing wages must drop. Seeing neither occurring manufacturing jobs will still decrease unless they require skilled highly productive talent like robotics work. In the end, a lot of manufacturing will inevitably be replaced by automation anyways.

We are entering the issues dealt with in "The Affluent Society" without the intelligent discussion that needs to be talked about as we enter into this phase of human history.

#1 Puerto Rico should be the big concern more than earnings. Sadly, I expect the rest of corporate returns to be worse given usually the better returns are scheduled for release first. The worst are the ones that need to file for delay. Thus, the general trend is down after the sharp unjustified rally back to the top of the trading range.