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.Corporate buybacks are boosting shares in a couple ways. First, it can create the illusion of earnings-per-share (EPS) growth. When earnings aren’t growing, share buybacks reduce the number of ... (full story)