Aggregate earnings per share (EPS) for the S&P 500 companies on a trailing 12-months basis rose for the second quarter in a row. That's the foundation of the Wall Street hype. But here's the thing with these EPS: they're now back where they had been in... May 2014. Yep. More than three years of earnings stagnation. No growth whatsoever, even for "adjusted" earnings... And yet, over the same three-plus years of total earnings stagnation, the S&P 500 index has soared 34%.


And there's another thing: these earnings per share are heavily influenced by the share count. Companies have been on a huge borrowing binge over these years, fueled by historically low interest rates, and a big part of that borrowed money wasn't used to create new things, expand, invest, or invent, but to buy back their own shares.

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