Most analysts agree that the US recovery is well under way, but Societe Generale analyst and world-famous bear Albert Edwards thinks that investors should be concerned about falling MSCI profits, because they signal a much weaker recovery than pro forma IBES profits which could be undone by problems in Asia.

“We have long believed that economists should monitor the profits cycle as closely as equity strategists,” writes Edwards in a March 25 report. “Over the years we have found that profits are probably the single most important leading indicator of recession. A decline in profits is inevitably followed by recession shortly thereafter as investment, the most volatile of all GDP components, is cut.”

Edwards isn’t interested in IBES profits

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