Half Way Up the Tree

The high of the Dow Jones industrial on the week of October 12, 2007 was 14,198. The low was made during the week of March 6, 2009. The approximate low price was 6,470. This was a fall of 7,728 points from the high. The high of last week in the Dow was about 10,342 or 3,872 points from the low made in March of this year. In other words, as impressive as the rally in the Dow Jones has been for the past 6 months, we have only gained about 1/2 the amount we lost from the highs of 2007.

They say markets climb a wall of worry. This has certainly been the case for the stock market. Unemployment is at 10.2 percent and most economist believe this number will continue to go higher. The US dollar is losing ground against almost all the major currencies and our estimated deficit and debt is continuing to explode. Wall of worry? It is more like a sunami of worry.

Yet americans are heading to the malls. It is the holiday season and the banks have a whole new attitude. Charge it. Don’t worry. Why we have even lowered our overdraft penalties. We are the friendlier bank you have always dreamed of. Well it was either that or face new legislation creations by chairmen Barney Frank and Chris Dodd. But never you mind americans go charge it.

Americans may indeed heed the call. Sales may continue to be brisk and the stock markets may indeed continue the bull market pathway to higher prices. The only shame is that americans are buying their holiday goodies from salespeople who have Phd’s, masters degrees, or other letters of significance. The person across the sales counter lost their job long ago and although they are now counted by the governement as employed,  it is at a wage that is about 1/2 or worse of what they use to make. Come to think of it. That is about where the Dow is now. It is also about 1/2 of where prices use to be. Go figure.

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