Tuesday, December 31, 2013

1995 vs. 2013

I heard on CNBC that the DJIA had its best year since 1995. It was theorized that perhaps the market would continue to behave like the late 1990s.

The following scatter chart shows the 10-year treasury yield vs. the DJIA in 1995.

Click to enlarge.

As interest rates fell consistently, the stock market rose consistently.

Let's do the same chart for 2013.

Click to enlarge.

As interest rates rose chaotically, the stock market rose consistently.

Other than the added chaos and inverted interest rate trend, the two charts are nearly identical! You just need to be wearing rose colored glasses so that you cannot see my commentary in red easily. It also helps to look at one of the two charts using a rear view mirror. That way the image will reverse and the trends will therefore look much more similar. It's a small price to pay for optimism!

If 1996 through 1999 is any indication (using red smoke and mirrors), I think we can expect great things from 2014 through 2017. Yes!

Too much sarcasm? Seems fairly heavy this time.

Source Data:
St. Louis Fed: Custom Chart (1995)
St. Louis Fed: Custom Chart (2013)


John said...

The only thing we have to fear is CNBC fraud itself--

Stagflationary Mark said...


It's a bit like buying a used car. We're told whatever it is they think we want to hear.

The more we get what we want, the more we watch. The more we watch, the more they get paid (advertising dollars).

We apparently want Mad Money and Fast Money. Hope that works out for us, lol. Sigh.

dearieme said...

My New Year resolution is to end every blog comment with a question to which the answer is "no". Do you think it's a good idea?

Stagflationary Mark said...


Do you think it's a good idea?

No comment.

I was planning to answer with a non sequitur, but I did not want to start an invalid argument with you. ;)