Why Surging Profits Aren't Leading To CapEx And Jobs

Tyler Durden's picture

Submitted by Lance Roberts of STA Wealth Management,


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NotApplicable's picture

I think we've consumed about all of the future we can afford. And then some.

Headbanger's picture

Jobs!!?   You mean like.. paying PEOPLE for doing something!?

That's absurd!

And the future sure ain't what it used to be!

Vampyroteuthis infernalis's picture

Tylers, this is a good article showing how data is easily manipulated for the money changers benefit. One statistic that I seriously question is population growth. Many of the numbers posted by the Census people are sheer BS. Our population is not growing as fast as they claim. This makes it easier to have phantom voters during election cycles using Diebold counters. No paper trail to demonstrate the fraud.

HINT: We did not elect our dear leader the pigeon.

Mercury's picture

The problem is quite clear. With the consumer heavily leveraged, the inability to "spend and borrow" is reducing aggregate demand.  As stated, the current level of aggregate demand simply isn't strong enough to offset the rising costs of taxes, benefits and healthcare (a significant consideration due to the onset of the Affordable Care Act) associated with hiring full-time employees.


More to the point,  the government's Keynesian efforts to pick up the agg demand slack with QE and ZIRP hasn't done shit.

disabledvet's picture

debt and the sheer scope and scale of Government is the wet blanket on the recovery.
The bulk of banking profits have gone to Washington not Wall Street.

I fail to see how TBTF has not been perfectly recreated here...first by the taking of too much rusk leading up to the housing collapse of 2008...then the refusal to take any risk coming out of the recession until this very day.

Now we're long overdue for an economic correction and the Fed has not really put itself in a position to engineer a "soft landing" should even a minor correction unfold.

IronShield's picture

Them's a lots of words to say "killing the middle class" ain't be good.

yogibear's picture

All tapped out. Student loans, 6 year car loans, auto leases and stagnant wages.

Unlike some Asian countries, Americans don't save.

Add in the baby-boomer fiasco.

The US is so broke it has to bum a ride into space on a Russian rocket.

elwind45's picture

And maybe the FEDERAL RESERVE is displaying a fortunate understanding of the future that is further ahead than a lot of " new kids from the hood" understood? Peak consumption? You mean its not a PAULSON SHITGUM? Helicoptors bazooka or SHITGUM its really done leveraging the future to satisfy present ego and they call him SANDY CLAWS. J.M.Joe.

Snidley Whipsnae's picture

"Never in history has a segement that comprises 17% of GDP been able to pick up the slack for a segment that comprises 68%. It is function of math that will likely lead to eventual disappointment."

"will likely lead to bankruptcy for those businesses that try it" 

plain english please... and it ain't a function of math so much a good business sense...

businesses can't 'fight the Fed' anymore than individuals can... The Fed created the current business conditions and now they want business people on Main St to go bk trying bail the Fed out temporarily... fagedaboutit

tvdog's picture

Consumers won't be 68% of aggregate demand any more. Serfs don't have money, aren't permitted to have it. Only nobility get to possess and use money. As long as the nobility have enough money for luxuries, there is no need to worry about the poor.

The problem of TPTB is not to promote economic growth, but to prevent it. Too many people with too much money leads to loss of control by the plutocracy.

Shizzmoney's picture


The problem of TPTB is not to promote economic growth, but to prevent it. Too many people with too much money leads to loss of control by the plutocracy.


Why do you think the SCOTUS decisions are all about?  "Free Speech" that actually matters (exposure) will soon have a unsurmountable price tag, and even tax!

People at the top seem to sometimes forget why exactly the gun was invented.  But like those before them in history, THEY THINK THEY HAVE IT ALL COVERED.

Boy, will they be wrong.

Chuck Knoblauch's picture

It's sad that some innocent rich families are going to be sacrificed for the greater good.

ejmoosa's picture

WTF are you talking about with surging profits?

38% of the companies in the Valueline Investment Survey are reporting lower profits tha one year ago, and the rate of year over year profit growth is down from a year ago as well.


Profit growth begets job growth.  And since the rate of growth of profits are down, hiring is going no where.  

Shizzmoney's picture

That, and demand.....which is a pre-cursor for hiring, isn't so for wages.


Wages don't need to be risen if there is no pressure to do so.  Unionization rates at an all time low.  Too many people and not enough jobs.  Education costs at an all-time high, along with student loan debt.  And assholes gaining more wealth through QE handouts, instead of actual working people who would remember where they came from.

It seems as if shit doesn't get addressed until things start burning.  So until shit does.........

MagicMoney's picture

Brillant article. I wish I could add STA into my feeds, but I can't. Don't know why.

venturen's picture

if it wasn't for the ability to pay zero interest....these companies would be bankrupt. Look at the topline numbers company after company have falling sales. Any money made goes to the deferred income portion of the CEO.

Chuck Knoblauch's picture

This is not the country the top 1% are going to want to live in.

In constant fear of hired help wanting to cut their throats. Not good.

Colonel Klink's picture

Let the major multinational corporations rot.  Live local, shop local.