Dow Jones Crosses Intrinsically Meaningless Milestone
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.