That would definitely raise the P/E, but how do you know this isn't already priced in? (If it actually happens). Most people seem to have been bearish on earnings for a while now.
you'd think the market prices in bad news but on Friday, GM/Ford/Chrysler were put on credit watch negative and the market acted like this was big news and tanked 100 more points. somewhere was posted that the banks have to report level 3 debt (the stuff that has no bid) with their 2Q 10Ks should be interesting
Ok good point, but I would have to think it would be dumb money exiting at that point; how could you not see that coming
did you know that if earnings drop then p/e's go up? do some reading. super cheap money is temporary. have you heard of inflation?
I dont know what holds anything up other than money printing and the Fed. buying junk debt 2009 should be really hideous unless there's a big break in oil/gas prices
'Impossible' is a word that doesn't exit in financial markets. Current PE and next year stock market performance are largely uncorrelated. I agree there will be a bull move down the road where huge fortunes will be made for those that don't get their head handed to them right now. But if that is that 6 months away or 6 years I have no idea.
Yahoo finance used to say AL have a yield of 12%, in reality it was 2-3% How can an ETF have earnings?
Hyper-inflation will make the housing crisis a blip. The stock market will not crash. As a matter of fact, it will go up. But that does not mean you can "make" money with higher stock prices, because in Euro$ term, US$ will worth less than ever before.