Dow Jones Crosses Intrinsically Meaningless Milestone
Friday, April 09, 2010 at 5:30 pm
Investors, rejoice! The Dow Jones Industrial Average has crossed the 11,000 mark for the first time since September 26, 2008. The news has caused much breathlessness in a financial blogosphere hungry for good news. But, to throw some cold water on the situation, the number 11,000 is no more meaningful than, say, 7 or 912,384. Rising stock prices make money for investors and bring new entrants into the stock market. But they have only a tangential relationship to macroeconomic fundamentals. And, soberingly, having the Dow at 11,000 puts us precisely where we were in May 1999.
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