As of this morning, the latest Standard & Poor's earnings data is the July 31 spreadsheet. The trailing-twelve-month (TTM) P/E and P/E10 remain unchanged.

S&P reports 1Q09's earnings at $7.52, and it looks like 2Q09 will end up around $7.27. Perhaps seven dollars and change is the "new normal" and the best earnings will for the next few years is around $30 annually. We'll see.

However, with the S&P 500 at 1002 and the historical average PE of 15, that says "investors" are expecting earnings around $66.80 for the year. These are pretty high expectations, as this means Q3 & Q4 would have to come in at about $26 — earnings that the S&P 500 has never achieved in any quarter so far.

On the other hand, investors could be expecting lower annual earnings and be planning to pay higher than 15 multiple, but that also makes little sense in the future slow-growth environment of higher unemployment and reduced consumer spending. No matter how you look at it fundamentally, current valuations make no sense.

Well said. Historically the correlation between price and TTM earnings often moves in odd directions — now more than ever. This is why I like to view this metric alongside the P/E10 ratio. This longer view looks far less whacky than the TTM P/E, but it's also moving into pricier territory.