Inflation is still bouncingalong the bottom at less than 2%, often negative as it has done fordecades. The Yen has appreciatedstifling exports while the Nikki stock index is essentially flat along witheconomic growth.
With a 4th quarter of declining earnings justabout in the books, Goldman Sachs is out warning about how overvalued stocksare based on the median price. Nosurprise as P/E ratios were already on the high side when earnings started tofall a year ago. As is often the casewith Wall Street and corporate America creative accounting and finance rides tothe rescue. Recent pieces by Estimize,FactSet Research and others noted that companies were actively gaming thenumbers to present the desired result to the investing public, employing allmanner of chicanery in the process, things have gotten so bad even the SEC hastaken notice. So much for Sarbanes-Oxley, which was supposed to return trust and faith to corporate financial data afterthe 2005-2006 scandals involving WorldCom, Tyco and Enron to name a few. Once again you can’t trust the analysts or the numbers the companies publish each quarter.