This in followup to my post on Corporate share repurchase programs and my thought that they have increased of late in an effort to boost EPS.
Please consider this view on Corproate profit sustainability from Califia Beach Pundit:
The fact that corporate profits have tended to track nominal GDP over time is not unusual, but the degree to which profits have outperformed nominal GDP in recent years is exceptional. I've argued for a long time that the market looks at the first chart above and sees a compelling case for corporate profits to revert to their long-term mean (just above 6% of nominal GDP). That would of course imply either a huge decline in profits in the next few years, or an extended period of flat profits, and that helps explain why the market is reluctant to embrace equities.