Dollar Collapse Plunges S&P 500 Back To 1996

Discussion in 'Wall St. News' started by WallStWhizKid, Oct 12, 2009.

  1. And here you were thinking that the market's collapse had taken only six years or so off the value of your nest egg.

    After all, the S&P is back to 1,100, about the same level as late 2003.

    Silly you!

    As we've noted often in recent days, since your government is quietly destroying the value of the dollar (ostensibly to save your ass), the actual dollar-adjusted value of the S&P 500 is back to 1996 levels. Even after the recent 60% recovery!

    Here, from the FT, is the S&P 500 plotted after adjusting for the dollar's move relative to a broad currency index:

    <img src=";maxX=620&amp;maxY=432" border="0" alt="spy dollar adjusted.jpg" width="620" height="432" />

    And here's the FT's take on it:

    Another extract from Diapason Commodities’ latest note, courtesy of author Sean Corrigan. According to Corrigan, the chart — which is set to a logarithmic scale — shows the extent to which money illusion has boosted the apparent performance of US equities. As he explains:

    Strip out the effect of the sickly greenback (by multiplying by the TWI) and we see that this bust has clearly spelt doom for a three-decade uptrend; that we are both hovering dangerously at the 50% mark of that whole move and also threatening to fail at the previous 2003 low. were that to occur, it could mean a much deeper unwind of the post-Tequila bubble era range.
  2. Ron Insana
    Dollar Devaluation Isn't Doom
    2:00 PM EDT
    Like it or not, a weaker dollar is good for the U.S..
  3. Your initial valuations are correct. As far as true valuations don't forget to include any dividends that would have been paid out by owning the SP500 and whether or not they would have been reinvested or set aside in cash (M1). Do you have those charts as well?

  4. What a load of horseshit.
  5. Why does the market rise if the dollar falls? Does it even matter if the dollar falls? The market will rise exponentially!:p
  6. the1


    A weaker dollar is good for the US to a point. If the $USD goes to 35 is that still good for the US? Think about that before you answer.

  7. If it's bad to "devalue the Dollar completely", that is, make it the equivalent of Monopoly money (or Zimbabwe money)... and bankrupting nearly ALL US citizens in the process... then how is devaluing the Dollar by 50% a good thing?

    Same reason devaluing by 25%, or ANY PERCENT... it's bad for US citizens.

    The people who advocate devaluing the Dollar are SHORT SIGHTED, LIARS AND THIEVES.... that's mostly politicians, right?

    :mad: :mad:
  8. maxpi


    Bitch, bitch bitch.. Bush haters were complaining incessantly about the weak dollar here, absolutely 24/7, then we had the election... now there are a couple of people concerned about it as it gets ever weaker... whatever, it weakens, domestic goods and exports get better, it strengthens, shop at Wal Mart... it it's not the reserve currency, so what... if it causes inflation, your real assets will appreciate with it and eventually currency trading will be a better game than futs.. then it can all get back into equilibrium..
    #10     Oct 12, 2009