Interesting take over the weekend in Marketwatch on stock market bottoms relative to historic trendlines.In past bear markets, whenever equities as a group fall into the range of 40-42% below trend, at bottom was not far off.
HFN editor Peter Brimelow, along with ESR Research’s Edwin S. Rubenstein observe:
“We have looked at stocks relative to this long-term trend line. When we last looked, we found stocks were down 38% below trend, around the levels seen at historic bear market bottoms in 1981 (40% below trend), 1974 (41% below trend) and 1932 (42% below trend).”
The concept was developed via Jeremy Siegel’s Stocks for the Long Run. (Note: Siegel does not necessarily agree with their conclusions).
Brimelow and Rubenstein show the historic relationship between the two via this chart:
The >
Source: Stocks’ bottom in sight. Again.
They can’t go much lower before reaching unsustainable depths
Peter Brimelow & Edwin S. Rubenstein
Marketwatch, 9:28 p.m. EST Jan. 18, 2009
The Week Ahead in Europe
Busy week ahead as Burberry, Nokia and Fiat report fourth-quarter earnings and German economic sentiment index in focus.
Earnings roll on, with results coming from State Bank of India and LG Electronics, while Japan is expected to begin buying corporate debt. Michael Kitchen reports.
Ok, the next set of site tweaks are in the queue, and the people have spoken: Its not a full blown redesign, but rather, a series of minor upgrades and improvements. The biggest visual changes are going to be making the top header reduced in size, and moving the flash to the Cafe.
This means I need some art work for The Big Picture main page.
Any ideas?
The main logo is definitely staying — its whatever graphic that replaces the flash header that needs to be developed.
Any concepts?
Anyone want to take a stab at designing something? If I use your work, in addition to the glory (and endless blog groupies), an autographed copy of Bailout Nation is yours, plus a credit buried somewhere on the site.
Your suggestions?
You guys complained about the flash, so here’s your opportunity to replace it!
David Macaulay, author of The Way Things Work, shares his illustrated renditions of the human body, which are more akin to cartoonish blueprints than Gray’s Anatomy.
Marketbeat blogger David Gaffen and Simon Constable of Dow Jones Newswires discuss the forthcoming economic data, which is expected to show continuing weakness in the housing and retail sectors. Plus what to expect from the slew of earnings releases.
"I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -Thomas Jefferson (letter to John Taylor in 1816)
After 3 quarters in a row that averaged just 1.2%, Q4 GDP grew 2.8%, a touch below expectations of 3.0% BUT Nominal GDP grew well below forecasts. Because the price deflator was up just .4% vs the estimate of 1.9%, Nominal GDP was up 3.2% vs the estimate of 4.9%. Personal Consumption rose 2.0% vs the forecast of 2.4%. Fixed Investment rose 3.3% helped by a 5.2% increase in equipment and software spending and residential construction rose by 10.9%. Trade was a slight drag on GDP growth and government spending was as well led by a 12.5% decline on national...
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