From CNBC via Value Walk (June 12, 2013):
Byron Wien: Profit Margins Have Peaked, ‘Trouble Ahead’ [VIDEO]
[rush] Transcript:
I’m sure you were listening to the conversation. i was. you have seen the volatility sort of amp up in recent days. what do you think? well, i think that the market has come a long way. it was up 16% last year, more than 15% so far this year. we’re only less than six months through the year. i think while valuations are still fair, i think the market has made a lot of progress, and i think there’s some trouble ahead. what’s the trouble? the trouble is that profit margins in my o have peaked, and that earnings are going to be disappointing in the second half. and that’s what the market is beginning to sense. it isn’t so much the fed. the fed may taper, but if they taper from 85 to 60, that’s still an enormous amount of liquidity being poured into the market, and in my opinion three qun quarters of that liquidity goes into financial assets, not the real economy. how do you get the market to believe that? to believe that a taper is not such a bad thing that everybody thinks it may be? well, i don’t know. you know, i have trouble enough analyzing myself much less the market. but i think — the market is looking for certain kinds of reality. tapering is a negative. a disappointment in earning would be a negative. evidence that profit margins have peaked is a negative. and i think there’s some negatives ahead...MUCH MORE
