In November, analyst consensus was that the S&P 500 would decline 17% for 2008 but rebound by 30% this year, The Wall Street Journal reports.

The fact of the matter is that 2008 profits fell 40%. Analysts then tamped down their expectations for the S&P 500 for 2009 to 24%, then 20%. Now the projections are for 9%.

“Recency bias” and “anchoring bias” based on tried-and-true benchmarks that have traditionally shaped the views of Wall Street may be a thing of the past, experts now say. In fact, the “golden age of profitability” may be permanently replaced by lower profits.

In 2006, profits reached historical highs, driven by consumer credit and home equity loans. With profits as a percentage of gross domestic product now at long-term averages, some people on Wall Street believe they must reset their models to account for permanently lower profits.

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