DOW at 12,997

[safeinOhio]

http://blogs.wsj.com/marketbeat/2012/02/21/morning-marketbeat-dows-circuitous-route-t

The last time the Dow closed above 13,000, Lehman Brothers was still in business, the unemployment rate stood at 5.5% and Jeremy Lin was a sophomore basketball player at Harvard.
Nearly four years later investors appear ready to push the blue-chip index back above this psychologically significant level.

[Demeter]

1. Whoopee

And a dollar has lost how much of its purchasing power since then?

The only thing psychologically significant about this "level" is the nutcases who think it is.

[banned from Kos]

2. Dollar has GAINED strength in the past four years.

Don't go Beck on us.

[Demeter]

5. Sorry, not inside the country

(It's called inflation, and just because a dollar's strength relative to some other fiat currency is currently higher, doesn't mean that BOTH currencies haven't lost purchasing power. Because they have.)

[banned from Kos]

8. Fiat currency? there is no other type

You say that like its a bad thing.

[Demeter]

13. As presently implemented, it is VERY bad

Go back to colonial times, and see WHY England prohibited the colonies from having their form of currency

http://en.wikipedia.org/wiki/Currency_Act

http://en.wikipedia.org/wiki/Early_American_currency especially the "bills of credit"

The paper bills issued by the colonies were known as "bills of credit". Bills of credit were usually fiat money; that is, they could not be exchanged for a fixed amount of gold or silver coins upon demand.[3][5] Bills of credit were usually issued by colonial governments to pay debts. The governments would then retire the currency by accepting the bills for payment of taxes. When colonial governments issued too many bills of credit, or failed to tax them out of circulation, inflation resulted. This happened especially in New England and the southern colonies, which unlike the middle colonies, were frequently at war.[5]

http://www.carolana.com/NC/Royal_Colony/The_Currency_Act_1764.html

http://eh.net/encyclopedia/article/michener.american.colonies.money

[safeinOhio]

4. Still better than the less than 8,000

when Obama took office.

[Demeter]

7. Better How?

Are people more secure in their futures, no children go to bed hungry, sick people aren't dying of preventable causes, and there is general rejoicing and prosperity?

Do you really think that piling all the wealth into paper assets in the market increases anything except poverty?

[safeinOhio]

10. Compared to 2008, yes.

[denverbill]

18. You realize there are some real life things happening that drive stock market prices.

GM is selling more cars. People are starting to eat out more again. Businesses are starting to hire again.

To some people, that is good news and a reason to be more optimistic about the future. And if the stock market is rising, I AM more secure in my future, because like about 1/2 of all Americans, much of my retirement savings is there. It doesn't mean no children go to bed hungry or people aren't dying of preventable causes and it doesn't mean I'm satisfied with the condition of the world. But some people are more secure in their future, fewer kids are going to bed hungry, and not quite as many people are dying of preventable causes. It might not be cause for rejoicing, but it's hardly cause for despair either.

[Demeter]

21. Yes, there are things that drive the stock market

But if you are paying attention, you will find that it's completely divorced from economic activity. It's just not telling you anything except what kind of bets are being placed at the Big Boys casino.

And don't get too comfortable in that security blanket you are clutching.

[denverbill]

28. Well go buy a bag of gold and a gun and hide in the basement then.

The security blanket I'm clutching is hope and faith that the US will recover, because if it collapses, the bag of gold isn't going to do you much good anyway.

[Swede]

14. Inflation has been fairly low.

So no loss of purchasing power.

[Demeter]

16. I can see that you don't do much shopping

or bill-paying.

[Swede]

17. At current 2.93 % inflation,prices will double every 36 years.

http://inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx

[Demeter]

20. What are you going to believe, Government-generated and massaged staticstics, or your lying eyes?

Please don't tell me that reality loses.

[bornskeptic]

22. No. At 2.93% inflation, prices would double in 24 years.

1.0293^24=2.

[Swede]

25. Oops.

I was calculating the 72 rule in my head. 72/3=24,not 36.

[Roland99]

24. Except current inflation is NOT 2.93% >>>

http://www.shadowstats.com/alternate_data/inflation-charts

[Swede]

29. You better go buy some gold.

[whatchamacallit]

30. I own gold. Should I be ashamed?

[Swede]

32. Not at all.

The guy above you linked to that shadow dude that was always on Glenn Beck's show flogging gold.

[Roland99]

33. Would be a prudent move at this point.

[Swede]

3. GOP hate this.

With whitehot passion they hate this.

[zipplewrath]

6. Time to sell short

I'd bet we'll go above this some what, then drop back down and test some "low" before going back above it soon there after.

This is why gasoline is being driven up in cost. The markets are anticipating better times-a-comin'.
Gonna be hell for Mittens and his unending claim that Obama is making things worse.

[paulk]

9. great news!

too bad I've had to sell all of my investments off to make it through the crash and so called recovery.

oh well...

[Ian62]

11. Greek deal

The mkt is rallying because the Greek debt deal is supposedly done.
But this is the same deal as that signed in July 2011 - except for 3 differences :-

a) interest payments to be held in an escrow account and has priority over all other government payments
b) it is for more bail out money
c) ECB (or rather Germany) has protected itself by replacing existing bonds with new bonds that have no get out clauses (CAC's) at the expense of private holders, which are now effectively subordinated to ECB holdings.

Greek 1 year bonds - interest rates are now over 600% !!!!!

This deal will not last that long.
It hasn't even been done yet - there are a number of hurdles to overcome before March 20th (next Greek debt ollover - 15bn euros).
It is neither realistic nor practical.
It just kicks the can down the road a bit more.

[Lint Head]

12. And gas prices are going through the roof. Same scenario as the last financial disaster.

Nothing has really changed. With the rampant speculation on oil and same regulations in place things are getting a little scary.
The DOW being up is good for us Democrats but the indications are disturbing. The Greece bailout from the Eurozone doesn't look like it will be enough according to some economists.

People cannot afford to travel and the shipping of goods and services along with the cost of manufacturing will rise with the oil prices.

Same old song. Second verse same as the first. I hope I'm dead wrong.

[rusty fender]

15. And what followed?

The Crash.

[TBF]

19. Let's hope it holds on through November -

I don't think I can stay in this country if they elect Sanitarium president.

But I agree with the poster above that opined about the Greek deal, so who knows how it will go because I don't think the Greek workers are done responding to this yet.

[Roland99]

23. What the DOW passing 13,000 REALLY means >>>

Here Is Why The Dow Just Passed 13,000
http://www.zerohedge.com/news/here-why-dow-just-passed-13000

Wondering why the DJIA just passed 13K again? Wonder no more: as the chart below shows it is entirely due to the nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that. We would add that with the entire centrally planned ponzi scheme hell bent on preserving the illusion of nominal gains, global liquidity is now fungibly sloshing from one market to another with absolutely zero resistance whatsoever. At this rate, it should double again in 3 years, then 2, and so on. Will the Dow hit 52K in 5 years in that case? Why most certainly. Just ask any remaining citizens of the Weimar Republic. They know all too well about exponential stock market rises. They also know absolutely everything about the self-delusion that comes with chasing NOMINAL numbers. Oh, and before we forget, expressed in spot gold price, the central bank aggregate tally has moved from being the equivalent of 10 billion oz of gold, to just 8 billion. Guess what is 20% underpriced.

As Dow Passes 13,000 In Nominal Terms, Here Is The "Real" Picture
http://www.zerohedge.com/news/dow-passes-13000-nominal-terms-here-real-picture

Three charts that perhaps will calm the nominal euphoria as Dow 13000 screams across the screens. Since May 2008, the Dow is unchanged in price and down 50% in 'real' gold terms. The picture is just as disheartening from the start of 2011 and 2012. Next stop Dow 20,000 and Gold 20,000?

From May 2008, The Dow priced in Gold is down 50% while we have nominally recovered unchanged.

...

From the start of 2011. The Dow is up 11.35% while in real terms it is down 12.4%...

...

and from the beginning of this year, the Dow is up 4.8% while in gold 'real' terms, it is down 4.25%...

[banned from Kos]

26. ZeroHedge = propaganda. Anything "Tyler" writes should be fact-checked or spin-checked.

Dow priced in gold? Garbage.

Same with Denninger.

[Roland99]

35. except events have been happening just as they've been writing

but I guess facts don't mean much in some people's world.


Question: Do you really think Greece has been saved?

[FreeJoe]

31. It seems like an odd way to value the stock market

Does it really make sense to measure the "real" value of the stock market as it compares to a single, volatile metal's value? That is especially true when that metal is in a speculative frenzy. Why not measure the price of the stock market against California Real Estate. Gee, stocks have sky rocketed in value that way.

As for me, I consider the value of my stock holdings based on what I can get for them. I can't get as much gold for them, but I'm OK because I consume very, very little gold. Judging the stock market by the basket of goods that I actually do consume, it has done very, very well in the last few years.

[Roland99]

36. When dealing with a world full of fiat currencies, gold is the ultimate fallback standard

Country's devalue or prop up their currency constantly. Just look what the Fed's done to the dollar in the last few years.

When paper starts becoming worthless, holding gold (hard gold...not paper certificates for gold) becomes the prudent move and basing comparisons to the price of gold becomes necessary.

[MineralMan]

27. It passed 13,000 at noon, but then

fell back a bit. I think it'll close above 13,000 today. Then, tomorrow, it'll probably drop back a little before continuing the upward trend.

[Taverner]

34. Yay! The rich stand to make EVEN MORE MONEY!!!!!

Thank dog Kim Kardashian can buy a new Bentley this year! It would be a tragedy if she had to drive around in last year's model... yecccch!