by John Galt
August 23, 2009
Thanks to the folks at www.chartoftheday.com you get some idea as to just how absurd the earnings reports have been thanks to the distortions of creative accounting. With 97% of S&P companies reporting we have a whopping P/E ratio of 129 on the S&P 500 and that is so many deviations from the norm, it is not even funny. The historical average until the .com fiasco was 20 and change to the high side with 7 as the average to the low side. Obviously even under the best of economic circumstances this is not sustainable, thus look for a massive correction to bring this number into reality and statistical norms.