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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: who cares? who wrote (12342)4/21/2004 6:19:18 PM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
how all of Detroits profits are from their finance arms

this is kind of the story of Corporate America. more and more, the old industrial cos are turning into finance cos, so a really huge percentage of corporate profits are from finance. officially Financial Companies are 22% of the SPX vs. 5% in 1980, but this understates the case because it does not include cos like GM and GE, which derive most of their profits from financial activities. contrary investor estimates the sector weighting including these "industrial financials" would be "well above 30%", and profits as a percent of SPX earnings are higher still.

so we have a country where nobody makes anything, and money is made simply by pushing pieces of paper around based on the historically wide spread courtesy of Elmer.

so a worsening environment for financials, such as may be emerging, could really devastate corporate profits.
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