Tag Archives: profit margins

A number of people have forwarded this Bloomberg article – Wall Street Banks Warn Downturn Is Coming –  to me over the last couple of days. That fact alone is probably a good argument to ignore it but I can’t help but read articles like this if for no other reason than to know what the crowd is thinking.  The gist of the article is that a bunch of sell side analysts think we are nearing the end of the current business...

Why are profit margins persistently high? With decent earnings this quarter, corporate profits as a % of GDP will approach (maybe exceed) 10% again. That is abnormally high compared to the period 1960 to 2000. Margins actually started to rise in the mid-80s but really accelerated after 2000 and outside of the 2008 crisis have remained high. Why? What changed in 2000 to elevate corporate profits so much? Is this just...