There are profitless companies far beyond Silicon Valley. One market expert explains how they're a lethal factor setting the market up for a meltdown.

• Vincent Deluard, the director of global macro strategy at INTL FCStone, says some of Silicon Valley's worst traits are popping up in other areas of the marketplace.
• He notes the flood of companies that haven't been able to turn a profit, even in a highly favorable economic backdrop characterized by loose lending conditions.
• Deluard thinks "all the ingredients" are in place for a meltdown.
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Silicon Valley unicorns are in the spotlight for all the wrong reasons.

Imprudent cash burns, massive debt piles, and business models that "may not achieve profitability" (Uber) or "elevate the world's consciousness" (WeWork) top the list of the more outlandish attributes these companies possess.

As investors, we like to think that pockets of market turmoil are generally sequestered and free of contagion. But that's not always the case.

Vincent Deluard, the director of global macro strategy at INTL FCStone, doesn't think these issues are going away anytime soon. What's more, he sees them popping up in places outside of Silicon Valley.

"Lack of profit is not just a unicorn, start-uppy phenomenon," he said in a recent interview with Real Vision. "If you look at the Russell 2000, about a third of Russell 2000 companies do not make profit."

He continued: "I counted - about 18% of the companies lost money in 15 of the past 16 quarters."

To Deluard, this is a shockingly high proportion that makes little sense. He argues that - amid a favorable economic backdrop rife with cheap capital - a larger portion of these unprofitable firms should be thriving.

"You have tax rates at the lowest they've been since the end of the war," he said. "We have the unemployment rate at the lowest it's been - since again - the end of the war. Interest rates at about a 5,000 year low, and still you have a third of the market that cannot turn a profit under these circumstances.

He continued: "At the same time, you've seen this explosion in debt per share, 3x to 4x on the Russell 2000."

Deluard aruges that, at some point, investors are going to stop tolerating these types of business models and start unwinding positions. And once that process commences, a vicious feedback loop of selling could occur.

"You have all the ingredients for - I think - a major correction," he concluded.

His comments on unprofitable companies were echoed recently by billionaire Bond King Jeffrey Gundlach, who warned of "zombie companies" that are still in business solely because of artificially low interest rates.

But Gundlach takes Deluard's market-correction forecast and does it one better: he's expecting a full-fledged economic contraction.

"We are battling tooth and nail the next recession," Gundlach said in a recent interview with Yahoo Finance. "The Fed has but done - and the central banks - everything they can to avert the next recession. But a recession will come."