GZ,
What about US companies SELLING parts and finished goods to Asia? I'll bet they're jumping for joy over recent developments. From what I have read, for a lot of companies, earnings out of Asia may have been smallish on a relative basis, but earnings GROWTH, those Asian earnings in particular, is what is driving many companies' lofty multiples. Look at the sudden, substantial reversal in trade flows with the US following the Mexican peso devaluation. This shoe hasn't yet begun to drop.
As for valuations, on a global scale, it has been difficult to beat the quality, consistency, and growth in earnings in the US for the last several years. For that reason alone, the relatively high valuations when compared to historical norms could be considered guardedly acceptable. This cycle is ending. Most of the fat has been cut out of US corporations over the last seven years, leaving little maneuvering room on the bottom line. As the growth in earnings dissipates, the consistency disappears, and as more and more accounting games are played to maintain an illusion of growth, the quality disappears, too.
When considering technicals, the markets worldwide peaked this year en masse. Some recovered a bit, the US recovered substantially (but still no new highs), and Asia, well... What are the technicals saying on a global basis? The US may yet pull this rabbit out of the hat for everyone, but I think it is more likely that, as US forward earnings are adjusted, our market will fall in line with global trends.
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