xjo weekend zoomba lounge, page-134

This article by Mish Shedlock has a really interesting graph showing how corporate profits as a proportion of GDP have grown over time

http://globaleconomicanalysis.blogspot.com.au/2012/07/sharp-decline-in-earnings-and-revenue.html

For me it implies that there is a very long repair job in US equity prices still ahead as profit levels revert to their historical mean. Only constant stimulus and perhaps inflation can keep those margins high enough to justify current share prices. One reason why the Chinese stockmarket is doing so poorly is because profit margins are very low there because of stiff competition, unless the business operates as a local monopoly or semi-monopoly.

loki