While Q3 earnings season has been better than expected, and the 5-consecutive quarter earnings recession is set to end, the bigger picture reveals something troubling: a secular corporate decline as revenue growth continues to be absent, and sales decline quarter after quarter. This is what shown in the following Citi chart, which also points out that while revenue declines normally trigger a sell-off, this can be avoided if companies return capital to shareholders by increasing payouts, which is precisely what they have been doing.
As we reported recently, traditionally increased payouts are financed with credit, and this time – as Barclays showed recently – the amount of new credit going to fund payouts has been higher than ever.
This post was published at Zero Hedge on Nov 10, 2016.
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