Four Elections And A Market Myth Funeral | ZeroHedge - Since 11/7/2000, the first election of Bush, the S 500 is down 0.25%. The USD has lost a remarkable 30% of its purchasing power relative to the world's major currencies (36% Trade-weighted). But it gets better because energy costs (WTI) have risen 65% since then. The Long Bond has gained a remarkable 50% while the clear winners in a Greenspan/Bernanke era has been precious metals - up around 550% since November 2000.
One thing I keep reading all over the place is this myth that a recession won’t happen because residential real estate is appreciating. Of course, the implication is that rising prices mean increased residential real estate activity, etc. But the reality here is that recessions just about ALWAYS occur with home prices still appreciating. As you can see in the chart below, in the last 40 years recessions have always occurred with rising home prices (with the exception of the 2008…
To sum this up: there have been bigger bubbles, so ours can grow bigger too. Moreover, it is different this time. It is actually fairly typical to find this type of thinking near the top of a bubble. The people living inside it cannot believe that it could possibly crash. Of course Canada's economic situation is in many respects 'different' from the US economic situation, but that is the case with every slice of economic history. Not one of them can possibly be exactly the same.
S 500 Snapshot: Some Serious Selling - A weaker than expected Advanced Retail Sales report was probably a key factor in the market's reversal. The index hit an interim low around 11 AM and then traded sideways through mid-day, which included most of President Obama's first post-election news conference. But the market evidently didn't like his hard stance on taxing high incomes.