We did it! Now What? Investor Sentiment looks back with CNN:

Dow: Then and now
January 14, 2000
October 3, 2006

Indices
Dow
11,722,98
11,727.34
Nasdaq
4,064.27
2,243.65
S&P 500
1,465.15
1,334.11
Stocks
eBay share price
$16.73
$28.18
Microsoft share price
$48.63
$27.37
General Electric
$43.25
$35.71
Proctor & Gamble
$50.86
$62.30
Economy
Fed funds rate
5.50%
5.25%
GDP growth
2000: 3.7%2001: 0.8%
2005: 3.2%2006E: 3.4%
National median home price
$131,000
$225,700
30-year mortgage rate
8.21%
6.31%
Average U.S. credit card debt per household
$7,031
$9,159
Oil/barrel
$28.02
$58.68
Gas/gallon
$1.30
$2.31
Gold/ounce
$283.90
$581.23
Real median household income
$42,148
$46,242
Warren Buffett’s net worth
$26 billion
$42 billion
—————————————

Now something here is shocking. Full House baby! All prices went up! So stocks (mostly the defensive), are at the same level. Real Estate – almost double. Gold – Doubled. Gas – Double. Oil – Double.

Now our money. Went nowhere! Our money stayed the same! The Interest Rates and the Median Household Income hasn’t increased at all.

But so something else has. DEBT. Average Household Debt rose about 30%. Which brings me to only one conclusion which economists have been claiming for months:

It’s not our money. That household debt is not including that which may come from an inevitable decline in housing. Worse over, we have taken debt out of our homes and put it back into, stocks (the “safest” secutrity in the world) and goods and services (why GDP is doing so well).

If the Dow declined, everything else rose and then the Dow came up again, I don’t know about you but something says we’ve all been playing the same game, with lots of money in the middle… but it’s about time to show your cards.

Advertisements

Tags: ,

2 Responses to “”

  1. JJM Says:

    so debt goes up by $2000 and housing values go up by $94000 , why are people crying so much , it’s utterly insane

  2. my1ambition Says:

    The problem isn’t the $2000, its the fact that the debt exists at all (China now has surplus of just under $1 Trillion).

    And Housing? As long as they don’t mind when it comes down $94,000 I’m ok with it too.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: