Six Reasons Why Corporate Profits Will Fall 50%

Should stock valuations track this same decline in profits, it's entirely reasonable to expect the stock market to lose 2/3 of its valuation premium.

All Six of the reasons corporate profits will decline by half are common sense:

1. Reversion to the mean: profits that are double the historical average as a percentage of Gross Domestic Product (GDP) are highly likely not to be a sustainable New Normal. The far more likely track is a reversion to the historical average, which is about 50% below corporat…