Profits down far more then the market
Big Picture has a post on what happened to profits this past year, down 85%,
▪ Profits fell from $645 billion in profits in 2007, to just $98.9 billion - an 84.7% decline.
When you consider the market was priced for future profit increases this is actually much worse then it looks. I am strongly of the option that the market was priced to high for existing profits.
Just quickly going by what I see on my CAPS the market is down in the 40-45%.
Unless one can somehow give good reasons to show profits are going to quadruple in a relatively short time frame I'd say the market is overpriced right now. Profits need to quadruple for the market to to be fairly price, imho.
It is getting easier to see how it was that the market declined to 11c on the dollar during the depression and I think the Asian crisis was in the same range.