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<p>[QUOTE=&quot;World Colonial, post: 2413406, member: 78153&quot;]The income flow from the vast majority of stocks in the form of dividends and debt from interest payments is an absolute pittance.&nbsp; This is the result of the asset, credit and debt mania.</p><p><br /></p><p>Debt instruments have never been more overpriced, especially considering the stable rags which pass for balance sheets in today&#039;s environment.&nbsp; In return for taking unprecedented historic risk, &quot;investors&quot; have accepted the lowest returns, ever.</p><p><br /></p><p>Except for January and March 2000, stocks on average have never been more overpriced either.&nbsp; The dividend yield is as low as it has ever been too, once again except for January/March 2000 and maybe October 2007 right before the &quot;Great Recession&quot; meltdown.&nbsp; To provide one indication of how absurdly overpriced stocks have been for so long, the only time prior to the late 1990&#039;s that the Dow yielded less than 3% was at top tick in 1929 and in October, 1987.</p><p><br /></p><p>Corporate balance sheets are also about as weak as they have ever been too.&nbsp; Since 2009, the data I have seen shows that in the aggregate, the S&amp;P 500 has distributed more than 100% of its reported profits through dividends and stock buybacks, even though the dividend yield is an absolutely pitiful 2%+.&nbsp; Many companies (such as IBM) have paid out more than 100% of their earnings by leveraging up.&nbsp; Collectively, they show record &quot;cash&quot; on their balance sheets but much if not most of this &quot;cash&quot; is actually another corporation&#039;s DEBT.</p><p><br /></p><p>Until recently, I always wondered how it might be possible for stocks to suffer a meltdown greater than the 1930&#039;s (at least in real money) based upon the &quot;fundamentals&quot;.&nbsp; The combination of unprecedented financial system leverage by governments, households and yes, now corporations means that in another financial crisis, corporations will be cutting or eliminating dividends at a much faster rate than they did in 2008 when supposedly &quot;rock solid&quot; companies like GE and Dow Chemical nearly went bust.</p><p><br /></p><p>Coins are more speculative than mainstream asset classes but the latter have never been more speculative than the last 15 years.&nbsp; The economic foundation supporting the debt structure and corporate earnings is weaker now than its ever been and this house of cards won&#039;t be able to sustain its financial levitation act forever.[/QUOTE]</p><p><br /></p>

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