Not surprisingly, the decline in banking profits has been reflected in the banks' stock prices. The shares of Italy's largest bank, UniCredit, have lost nearly 70% of their value. Shares of the Royal Bank of Scotland has declined more than 55%, and those of Credit Suisse and Barclays are down by half. Since the start of 2016, twenty of the world's bigger banks have lost about $455 billion, a quarter of their combined market value.
- The Standard & Poor's 500 index now has a P/E (price/earnings ratio) of 25. Only twice in history has this metric been this high: (1) at the top of the high-tech (“dot.com”) bubble that burst in 2000, and (2) in 2007 at the peak of the stock market before it and the housing/mortgage market collapsed into the Great Recession of 2008-09.
- Earnings have moved in the opposite direction from stock prices. Earnings for the S&P 500 peaked in 2014 at $106 per share. Corporate earning for those same companies have declined for four straight quarters, and the end of the second quarter 2016 stood at $86.67 per share. This despite the fact that the Dow Industrials and the S&P 500 hit all-time highs in August.
- Business investment fell 2.2% last quarter, the third straight quarterly decline in investments in property, plant and equipment, which hasn't happened since 2008-09.
- U.S. companies are borrowing faster than they did during the dot-com bubble or housing boom.
- Corporate leverage, which measures net debt against earnings, is twice as high as it was in 2007.
- The real GDP growth rate for the year ending in June was a mere 1.2%—the weakest four-quarter rate since the Great Recession.