Goldman Sachs Wants A “Revolution,” So Grab These Shares Now

Goldman Sachs thinks they’ve spotted an economic anomaly – and they’re warning it may force the firm to redefine the nature of capitalism itself.

In a research note, produced by a team of analysts and released earlier this year to clients, the firm highlights the fact that profit margins in the United States and elsewhere are historically high and that they may remain that way for a long time – especially when it comes to companies engaged in mergers, acquisitions, and stock buybacks.

In what may be the ultimate case of the pot calling the kettle black, Goldman says that’s not how things are supposed to work.

I can’t say I disagree.

Since 2007 we’ve talked about how today’s markets are a completely artificial construct made possible by the Fed’s incessant meddling, regulators who were asleep at the switch and who still aren’t fully awake, and a completely out-of-control Wall Street machine.

You simply cannot engineer your way out of a crisis caused by too much debt by adding more debt.

Why?

Because it messes with the very relationships Goldman has evidently just latched on to.

Something has to give…

…just make sure it’s not your money.

Here’s how you can make sure it won’t be – and a run-down on two stocks uniquely positioned to make triple-digit gains when this debt-ridden system falls apart.

Declining Profit Margins Always Mean Short-Term Pain… Except in 1986

S&P 500 profit margins are flirting with historically high levels, even after this quarter’s blisteringly poor results and a blended earnings decline that averaged 3.7% across the board.

In fact, current profit margins are so far above their long-term average that they’ve “got to” fall until they come into line with longer-term averages… at least according to classic economic models.

Yet, Goldman is saying is that there is so much financial engineering at work intoday’s markets that they may not, especially when it comes to companies engaged in the systemic orgy of mergers, acquisitions, and share buybacks enabled by bailouts and zero-interest-rate policies (ZIRP).