Lance Roberts: The Markets Are Now Waving A Huge Red Flag

Friday, August 17, 2018
By Paul Martin

by Adam Taggart via,
Fri, 08/17/2018

Lance Roberts sees trouble ahead.

As chief investment strategist of Clarity Financial and chief editor of Real Investment Advice, Lance issues commentary weekly on the financial markets. He sees a major market correction/crash dead ahead, likely in early 2019 as the US economy officially slides back into recession — though he’s open to it happening sooner than that.

Based on the huge debt/decifit excess that have built up in the economy, paired with the tremendous overvaluations in asset prices seen in today’s markets, Lance expects economic growth to remain anemic (at best) for the coming decade:

It’s a huge red flag. Look, at the end of the day, we can manipulate the bottom line of earnings statements all we want. But if I’m a business, look, I run three businesses, and if I don’t have revenue coming in at the top line, I can manipulate my bottom line through accounting gimmicks. I can do some weight suppression. I can layoff all my employees. I can maintain an illusion of profitability for some period of time. But at some point I’ve got to have the revenue, which is what happens at the top line of the income statement.

Just to put this into some context: since 2009, total growth of revenues for the S&P 500 is running about 30%. Bottom line profitability has grown by almost 300% during that same timeframe. Earnings per share have grown tenfold over revenue growth because of things like corporate stocks buybacks, weight suppression, employment suppression and accounting gimmicks.

The Rest…HERE

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