Sunday, October 18, 2009

Comparing the Dow with CPI, and with debt


4 comments:

  1. James Higham18 October 2009 at 14:44

    And your conclusion and projection, Sackers?

    ReplyDelete
  2. Sackerson18 October 2009 at 15:25

    Ine the Dow/CPI comparison, I think the Dow is still above where it "should" be.

    As to Dow vs debt, I wonder myself. I think it suggests a long-term progress away from investment based on savings towards investment based on borrowing and speculation. The current buzzword is "financialisation", I believe. Maybe comparing the Dow/debt with the Dow/CPI would show points where the two were significantly out of step, and this could indicate increased danger of volatility and market collapse? But I just don't have the time and resources - maybe one of your full-time City contacts could think about it.

    ReplyDelete
  3. dearieme18 October 2009 at 18:53

    At least in the early part of your period, the Dow would also have been paying useful dividends, which I suppose should be allowed for somehow.

    Still, not only are equities probably overvalued, but so are bonds I dare say, and property too. So what to do? Fill your attic with "stuff"?

    ReplyDelete
  4. Sackerson18 October 2009 at 19:41

    Spot-on question, DM. Currency speculation? Land? Oil?

    ReplyDelete

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