BOTTOM LINE: The S&P 500 P/E on current estimates is 22.5 and falling on the fastest GDP growth since the mid-80's. In the late 80's, the current P/E was at similar levels, yet the 10-year long-bond yield was 155% higher than today's rate of 3.76%. While the S&P 500's P/E in the mid-70's to mid-80's was lower, the U.S. economy was mired in the worst recession of our time and the 10-year long-bond was on its way to an astronomically high yield near 16.0% in 1981.
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