Add earnings warnings and lower estimates to the widening mess of oil spillage, BP PLC's fight for its life and Europe's debt crisis this summer.
There's a difference between a liquidity-driven and earnings driven stock market. The former is driven by devaluation while the latter by savings and investment. I distinctly remember market fundamentalist calling the stock market cheap at PE = 17.93 in 2007.09. Shortly after that, the wheels began to fall off the earnings driven crowd.
S&P 500 Price-to-Earnings Ratio:
Source: finance.yahoo.com
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