by Andrew Zatlin
We’re witnessing a very typical pattern right before recessions and market collapses.
The market’s price-to-earnings (P/E) ratio is currently at a level seen only before recessions.
[…] Before we flat out say there will be a recession, we need to dig deeper into why we’re here today.
First, we can look at earnings (the E in P/E.) Earnings have stalled. Yet prices (the P in P/E) have still rallied. This pushes the P/E ratio upward.