A picture is often worth 1000 words. In this case let's chart the euro. Look at it crash.
(Click to enlarge)
Back out the factors that overstate earnings. Back them all out.
1. The irresponsibility of Europe spending money it doesn't have. This has created an unsustainable and unpayable debt situation where countries that don't issue their own debt are racking up debt payments that it is impossible for them to pay back. I've argued in the past that their debt is a balance sheet liability and not a balance sheet asset. This is still the case. Anyone irresponsible enough to buy Insolven European debt deserves to lose their shirt.
2. China still can't afford to bail out the entire euro-zone, but they're certainly going to try. This is especially hilarious when you realize that they are facing their own insolvency risks which are even greater. China's interbank lending rates have been soaring lately (SHIBOR). Back out China's unsustainable demand for goods and services that has been primarily financed on unsustainable (negative ROI) bank loans into dodgy real estate investments and other off-balance sheet hidden liabilities that are stacking up like their last Great Leap Forward.
3. The U.S. government is stupid enough to think that we need to run our government like a company. This is out of line with MMT (Modern Monetary Theory), but I'll let it all slide and say that if the U.S. government doesn't start ramping up spending, we are heading full throttle into a very large deflationary spiral led by the private sector, China, Europe, Australia housing crash, commodity price crash, etc.
What have you got?
Discount the cash flows of the S&P500 and you find things are grossly overvalued given their risk profile. Sure, interest rates are at al time lows, but have you noticed that emerging market yield curves are inverted? Sure, this hasn't happened in the USA, but how do you invert a yield curve that the Federal Reserve is holding down to 0% at the front end? You can't.