S&P 500 EMERGENCY

Source: S&P.com

S&P 500 Price to Earnings ratio:

12/31/1988	277.72	11.69
03/31/1989	294.87	11.81
06/30/1989	317.98	12.61
09/30/1989	349.15	14.74
12/31/1989	353.40	15.45
03/31/1990	339.94	15.69
06/30/1990	358.02	16.84
09/30/1990	306.05	14.08
12/31/1990	330.22	15.47
03/31/1991	375.22	17.92
06/30/1991	371.16	19.12
09/30/1991	387.86	21.77
12/31/1991	417.09	26.12
03/31/1992	403.69	24.93
06/30/1992	408.14	23.94
09/30/1992	417.80	23.16
12/31/1992	435.71	22.82
03/31/1993	451.67	22.77
06/30/1993	450.53	23.31
09/30/1993	458.93	22.49
12/31/1993	466.45	21.31
03/31/1994	445.77	19.63
06/30/1994	444.27	17.63
09/30/1994	462.71	16.93
12/31/1994	459.27	15.01
03/31/1995	500.71	15.38
06/30/1995	544.75	15.82
09/30/1995	584.41	16.61
12/31/1995	615.93	18.14
03/31/1996	645.50	18.96
06/30/1996	670.63	19.21
09/30/1996	687.33	19.09
12/31/1996	740.74	19.13
03/31/1997	757.12	18.82
06/30/1997	885.14	21.83
09/30/1997	947.28	23.31
12/31/1997	970.43	24.43
03/31/1998	1101.75	27.86
06/30/1998	1133.84	29.10
09/30/1998	1017.01	26.70
12/31/1998	1229.23	32.60
03/31/1999	1286.37	33.52
06/30/1999	1372.71	33.46
09/30/1999	1282.71	29.18
12/31/1999	1469.25	30.50
03/31/2000	1498.58	29.41
06/30/2000	1454.60	28.02
09/30/2000	1436.51	26.75
12/31/2000	1320.28	26.41
03/31/2001	1160.33	25.54
06/30/2001	1224.38	33.28
09/30/2001	1040.94	36.77
12/31/2001	1148.08	46.50
03/31/2002	1147.39	46.45
06/30/2002	989.81	37.02
09/30/2002	815.28	27.14
12/31/2002	879.82	31.89
03/31/2003	848.18	27.97
06/30/2003	974.50	28.21
09/30/2003	995.97	25.82
12/31/2003	1111.92	22.81
03/31/2004	1126.21	21.66
06/30/2004	1140.84	20.32
09/30/2004	1114.58	19.29
12/31/2004	1211.92	20.70
03/31/2005	1180.59	19.57
06/30/2005	1191.33	18.80
09/30/2005	1228.81	18.46
12/31/2005	1248.29	17.85
03/31/2006	1294.83	17.82
06/30/2006	1270.20	17.05
09/30/2006	1335.85	17.00
12/31/2006	1418.30	17.40
03/31/2007	1420.86	17.09
06/30/2007	1503.35	17.70
09/30/2007	1526.75	19.42
12/31/2007	1468.36	22.19
03/31/2008	1322.70	21.90
06/30/2008	1280.00	24.92
09/30/2008	1166.36	25.38
12/31/2008	903.25	60.70
03/31/2009	797.87	116.31
06/30/2009	919.32	122.41

4Q 2009 P/E will likely pop 200.

Objective Conclusion:
The S&P 500 must fall 90% to 95% to reach a price equivalent to 1988 (as far back as S&P's web xls goes). But 1988 represented a valuation in a reasonably strong economic environment, which we do not have today. In 1932, which had much higher Treasury interest rates (the best measure of economic growth expectation) than today, P/E bottomed at 6. To reach that valuation, the S&P must drop by 97% or more, assuming earnings do not deflate at all while the index price falls to almost 0.