Comments on: Chart of the day: Stocks vs unemployment A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: ChrisH Tue, 23 Feb 2010 03:36:44 +0000 POWERSHIFT TO CHINA
1929-1932 reveals a stark correlation to today?

Have a look at the two graphs below.. To me it’s clear that during the period 1929-1932; as unemployment rose the DJI fell… if the period we are in now is quasi-reminiscient of 1929-1932 then we are in February 1930 now.. Watch out below…

Dow Jones Industrial Average 1929 – 1932


Unemployment Rate 1929 – 1932

If this is like 1987 then we’re OK…

My thoughts are this “feels” like Structural change and we are heading for a quasi 1929-32 type scenario albeit with less civilian pain because China will “buy” America’s knowledge and assets in return for forebearance of debt. This will ease the populations’ initial herdship but the net result will be the confirmation of the shift of economic power from US to China.

By: Tim Tue, 26 May 2009 16:55:12 +0000 To put it simply: the stock markets, most especially US ones, WISH things would magically — aka, suddenly and sustainably — go back to mid 2008! They want it SO very badly!! Many want to try to recovering their losses, and others want in on the action they missed …

Problem is, reality: unemployment, consumer spending, credit market situation, rapidly ballooning federal debt, unprecedented industry changes; just to name a few!

Notice what I did not list there: corporate profits. Those are a RESULT, not a driver in themselves, in the real world! (Only Wall Street can live in fantasy land, and try to ignore reality; “Masters of the Universe” my …)
Those results, too, we have seen so very vividly demonstrated can be manipulated almost arbitrarily, especially in the short-term!!

In the face of all that, why the hell would any rational investor have any faith in the rally being sustainable??!!??

By: Jeff Tue, 26 May 2009 14:03:08 +0000 I’ve noticed that another Seeking Alpha writer, Dr. Kris from MIT has developed a really interesting item called the SMC analyzer….it puts together Modern Portfolio Theory and several market timing oscillators – seems she prefers the CCI – in regard to properly allocating assets. I’ve been involved in markets for many years and fund managers have never shown that they can effectively time the markets. Maybe they should take a look at it, since this seems to be hard math and there is no ‘human’ element to louse the results….

By: Felix Salmon Mon, 25 May 2009 20:56:11 +0000 Curmudgeon, yes, there is a direct correlation. See here: les/2009/05/unemployment-underemploymen. gif

By: Ironman Mon, 25 May 2009 18:45:32 +0000 Curmudgeon: There’s room for semantic flexibility here – the U6 measure incorporates both the number of unemployed and the number of underemployed.

Felix: If it helps, stock prices haven’t been following changes in the labor force so much as they’ve been pacing changes in the expected future growth rate of stock dividends per share.

By: Curmudgeon Mon, 25 May 2009 17:54:47 +0000 Felix, the chart is labeled “underemployment,” yet you refer to it throughout your posting as “unemployment.” Is this a mistake, or are you implying a direct correlation between the two? If so, can you explain? Thanks.