With fourth-quarter earnings largely in the books (over 79% of S&P 500 companies have reported for Q4 2009), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low -- the largest decline on record (the data goes back to 1936). Since its Q1 2009 low, S&P 500 earnings have surged (up over 600%) and currently come in at a level that has only been exceeded during the latter years of the dot-com and credit bubbles.
Blogger note: Warning sings are plentiful. Few heed the lights of the oncoming train. But in every bubble and market mania, these signs are ignored and many follow their own fancy and conjecture. It will not be until the implosion occurs that folks will wake up from their fantasy sleep. This is the way it always has been--unfortunately.