The gray areas represent recessions.
As seen in the chart, oil has gone up faster than the S&P 500 this decade. Oil has also gone up faster than the S&P 500 during this economic recovery.
Should this new long-term trend continue, I would expect more pain than pleasure. Note that the trend can continue even if oil's price does not rise. Stocks falling in price would be sufficient.
Hussman Funds - Weekly Market Commentary
As I emphasized last week, even if we had no concern at all about a second wave of credit strains, we would still be fully hedged here based on the present combination of rich valuations, overbought conditions, overbullish sentiment, and hostile yield pressures. Presently, we are also at the peak of concern about the potential for fresh credit difficulties to emerge, as we move into the first portion of the Alt-A / Option ARM reset schedule.
Econbrowser: Not a textbook rebound
Is this as good as it gets? For the time being at least, it seems to be.
See Also:
Trend Line Disclaimer
Source Data:
EIA: Crude Oil Spot Prices
Yahoo: Historical Prices for S&P 500
NBER: Business Cycle Expansions and Contractions
Higher oil and gas prices are so 2 years ago! Nothing can stop this economy!
ReplyDeleteMark,
ReplyDeleteis this why you are always playing games online???:
http://www.geekologie.com/2010/03/paying_girls_to_play_video_gam.php
Now why didn't I think of that business??
"Nothing can stop this economy!"
ReplyDeleteLet me be perfectly clear.
1. Cheap oil brakes the economy like economy brakes brake. There's almost no braking power at all.
2. Expensive oil breaks the economy like economy brakes break. There's a tremendous amount of breaking power.
3. Zero interest rate polices brake the economy like economy brakes brake and then break the economy like economy brakes break.
It's all so simple really. ;)
If prior link did not work use:
ReplyDeletehttp://tinyurl.com/yb4uhvt
Would that be slotted/drilled brake rotors or the new age carbon fiber deals?
Stag, GYSC,
ReplyDeleteHere's something that irks me about the way the system of "positive" inflation is set up:
The harder and more successful the productive economy is, the more the FIRE eCONomy prospers at the expense of the productive economy.
The fruit of labor, productivity and ingenuity is more debt. I hate to be a downer cow, but that CONcept really bugs me.
I'll tell you what else bugs me - the notion that "savings" gluts lead to global debt impoverishment. Seriously. I'm supposed to believe a savings glut means people the world over are unable to afford places to live????? WTF!
It's all a big sham. The propaganda has reached unimaginable levels.
GYSC,
ReplyDeleteI meant to comment on The World's Oldest [Gamer] Profession link you offered but the phone rang, lol.
mab,
ReplyDeleteSeriously. I'm supposed to believe a savings glut means people the world over are unable to afford places to live????? WTF!
The savings glut is a disease that specifically targets the wealthy. It's a sham(e) that they alone must bear that burden.
Stag,
ReplyDeleteThe savings glut is a disease that specifically targets the wealthy. It's a sham(e) that they alone must bear that burden.
Good point. It's a sham(e) there isn't more shared sacrifice in our eCONomy.
Oh well, I guess we all have our own "El Guapos" to CONquer:
http://www.youtube.com/watch?v=ioKto0di3EA
mab,
ReplyDeleteBernanke said he'd offer us more "transparency" but...
http://www.youtube.com/watch?v=9eCCAAsLJeY