Two interesting visual takes on Dow 12,000, both via the NYT:
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This one might have been more useful if we saw the millenial day counts on the way down (10k, 9k, 8k) and then back up again:
This chart shows how the US Markets have performed relatively to other global markets:
Sources:
How Far Past 12,000? Watch Data
VIKAS BAJAJ
NYT, October 20, 2006
http://www.nytimes.com/2006/10/20/business/20stox.html
Viewed From Abroad, the Dow at 12,000 Isn’t So Impressive
FLOYD NORRIS
NYT, October 21, 2006
http://www.nytimes.com/2006/10/21/business/21charts.html
hmmm. yup. That’s the Bush economy. A flatline with a crater in the middle of it. Like Iraq; all that effort, time and MONEY spent for a rather unspectacular result.
But it hit 12,000 for the first time ever!
TWELVE-THOUSAND!
Apparently all you need for a good economy is a good headline. Just emphasize the meaningless “records” and rely on most people being ignorant of what “Dow 12,000” symbolizes, other than a big number attached to a stock-market name.
This graphic is illustrative of just how stagnant the Dow, and by loose extrapolation, the US economy really is. This is the grand plateau that the housing boom provided. The technicals would suggest that another “punctuation” a la 2003 can be expected to upset this relative equilibrium. In my opinion, the fundamentals suggest that it will hit harder and deeper, especially once housing truly falls out.
Once the election is over, the hopeful-bullish forces propping up this hollow ralley will recede and we’ll probably continue on the same trend of losing ground to a globalizing economy and a costly occupation that won’t end anytime soon, if at all.
Granted, I could be totally wrong, but my instinct tells me that a Democratic takeover (which i do hope for) isn’t going to make the market react well, and it isn’t going to quickly solve the fundamental problems eating away at the US’ solvency, economy-wise or geopolitically.
These charts are pretty instructive. Dow investors in 2000 are still down, on an inflation-adjusted basis – although the average man on the street may think in nominal terms, inflation in developed countries can racks up to almost 30% a decade, and this in this world of low and contained inflation expectations.
That said, I think the charts also go to show that equity markets are a tough investment to beat over the long-term in terms of total real returns. You just need a really long time horizon to benefit from the drift.
“a Democratic takeover (which i do hope for) isn’t going to make the market react well”
Well, if the Dems start taking down the Potemkin village flats yes, i suppose we’ll be left with the “Reality” of whatever shape the economy is actually in. Sweeping up after the elephants is traditionally one of the toughest gigs in showbiz ;)
The markets discount everything. A widely anticipated democratic victory is one reason the markets are rallying. This will be overdone however and once victory is certain a correction should take place. Buy the rumor, sell the fact.
a 9.1% rise? that’s around 1% annualized.
charts like these make the case for secular bear markets that much stronger.
i guess we’ll have to wait until next year to see how the fed’s battle w/inflation, the inverted yield curve, housing, iraq, the elections, and the economy all get resolved.
it’s funny that the dow reached this peak at such a fragile tipping point.
“A widely anticipated democratic victory is one reason the markets are rallying.”
yeh just the thought of taxing the populace into recession, dismantling the truest form of evil -WalMart, and a “windfall tax” on oil companies can only be good news for stocks
gridlock means less spending…and if you look at the first chart you can cleary see that we need to invade another nation…its good for everybody…except soldiers….maybe we could use robots…
I miss that bubble market and economy of the 90’s …. P/E’s were 40 , 50 , 60 , 70 + / earnings , if there were earnings …. really stinks having some reality and real companies as we do now
Taxing the populace? The rich are not the populace….They are dinner….
I like Wal-Mart Moron. (btw- you aint no brother of mine) Windfall tax on pig Oil?? Good idea Moron….
pps -Give my regards to Argentina when you move there. You are moving there after the Dems (grownups) take over again aren’t you? (there’s a good little kool-aid swilling fascist)
“Taxing the populace? The rich are not the populace….They are dinner….
I like Wal-Mart Moron. (btw- you aint no brother of mine) Windfall tax on pig Oil?? Good idea Moron….
pps -Give my regards to Argentina when you move there. You are moving there after the Dems (grownups) take over again aren’t you? (there’s a good little kool-aid swilling fascist)”
wow, talk about kool-aid drinkers, so anyone that doesn’t hold your very same opinion is a fascist? so much for open mindedness and free speech. Hypocrisy does indeed breed hostility
Mark- if you are taking Moron’s side or equating his neo-con spew with human dialogue there is no hope for you either.
Mark, brion probably reacted strongly to “moron” because “moron”‘s post (as I read it) was meant to insult more than inform; not because brion considers his/her critics to necessarily be koolaid-drinking fascists.
BINGO 4 wunsacon. Barry’s blog seems to attract these nasty little O’Reilly winger trolls. Such folk are fascists in my book. They are the 21st century equivalent of the “Good Germans” in Hitler’s day. Blind, stupid, vicious and cruel.