Tonawanda News

Columns

November 20, 2012

CONFER: Why stocks are higher than expected

Tonawanda News — A question that people have asked me quite often over the past few years is this: “If the economy is so bad, then why is the stock market so high?”

It’s a legitimate thing to ask. In October of 2007 the Dow reached an all-time high of 14,164. During the Great Recession, the market bottomed out in March of 2009 at 6,547. In the past 52 weeks we’ve seen a peak of 13,661 and, as I write this column, we’re at 12,570. Those aren’t pre-recession levels, but they’re still pretty good considering what the global markets went through.

No one would have expected the Dow to double — let alone surpass just 10,000 — in just a couple of years. It doesn’t match what has really happened in the economy. Most Americans are just as pained and worried as they were during the Recession; such is to be expected when the widely-accepted unemployment rate has languished around the depressing 8 percent mark. That number, which in itself doesn’t reflect reality, is only that small because so many people have dropped out of the workforce or have lowered their expectations to part-time employment. Taking into consideration those individuals through the U6 unemployment rate, true unemployment is really at 14.6 percent.

You can see why people are confused by the inverse relationship between economic indicators.

So, what does account for the stock market’s ascension?

The answer is simple. It’s the only game in town.

It used to be that the working man could plan for his future by dabbling in one or more of the following: investing in the stock market, buying real estate, acquiring government debt, or buying certificates of deposit. Now, only the first one is a legitimate endeavor because the other 3 are just shadows of their former selves.

Text Only
Columns
  • DuVall, Eric mug.jpg DUVALL: In defense of the Common Core

    They've become the two dirtiest words in education, but the Common Core is very much worth defending.

    April 20, 2014 1 Photo

  • tucker, barb.jpg TUCKER: Bits and pieces from out and about Ever since it was restored and opened, the Hotel @ Lafayette in downtown Buffalo has fascinated me. Last Monday, the Preservation Buffalo Niagara offered a tour of the hotel led by developer Rocco Termini.

    April 19, 2014 1 Photo

  • mug - adamczyk.jpg ADAMCZYK: Kenmore is a village made of bricks Buffalo and surrounding environs have brick buildings galore, often in the process of repurpose. Whole neighborhoods made of brick await development, redevelopment, gentrification, whatever wand will be waved at them to make them function again. Structures here tend not to be razed; they fall down occasionally but typically simply stand and wait.

    April 18, 2014 1 Photo

  • leffler, scott.jpg LEFFLER: Justice is blind -- and deaf and dumb I've always been intrigued by the concept of justice. I say concept because it really seems more theoretical to me than practical. One man's justice is another man's nightmare.

    April 18, 2014 1 Photo

  • confer, bob.jpg CONFER: Don't go soft on teenage criminals

    April 16, 2014 1 Photo

  • DuVall, Eric mug.jpg For Sabres, more suffering is on tap

    April 15, 2014 1 Photo

  • tucker, barb.jpg TUCKER: Taking down trees 'disheartening' Several readers have questioned the City of Tonawanda's tree removal program. An email to Jenna Koch, who represents the third ward and checks into any query on the city, explained the program.


    April 12, 2014 1 Photo

  • mug - adamczyk.jpg [Duplicate] ADAMCZYK: Letterman was on my side The announcement that Mr. Letterman is retiring from his groundbreaking television program, sometime in 2015, is already old news, but it gives opportunity to ponder a few truisms about history and modern life.

    April 11, 2014 1 Photo

  • Leffler Mug 041114 [Duplicate] LEFFLER: 'Need to know' a double-edged sword Inquisitive doesn't begin to describe me. I must know everything. About everything. I hate being in the dark. I guess that's what makes my career choice so very obvious. I think "must know everything" is at the top of most journalists' trait lists.

    April 11, 2014 1 Photo

  • Wallace, Amy BW mug WALLACE: Airplane coverage has gone awry I don't know about you, but I am so sick of the cable news stations' constant coverage of the missing Malaysia Airlines jet.

    April 10, 2014 1 Photo