Looking a numerous earnings charts, we can come to several conclusions:
First, the charts imply that the worst of the crisis and recession driven earnings collapse is over. Second, it appears that earnings are normalizing, i.e., returning to their prior range. Third, that stocks can no longer be described as cheap. Lastly, whether stocks are art fair value or are expensive will be determined by how much equity prices gain relative to ongoing improvements in earnings.
click for larger graphs, below
How Cheap are Stocks ? (1871-2011)
Inflation Adjusted S&P Earnings Show Normalization
via Chart of the Day