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As Dow Passes 13,000 In Nominal Terms, Here Is The "Real" Picture

Tyler Durden's 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%...

Charts: Bloomberg

 


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Tue, 02/21/2012 - 12:29 | Link to Comment Thomas Jefferson
Thomas Jefferson's picture

Forgot the illuminist eye on the top of that triangle.

Tue, 02/21/2012 - 13:03 | Link to Comment hawks5999
hawks5999's picture

Can we see the Dow priced in AAPL?

Tue, 02/21/2012 - 14:04 | Link to Comment Banjo
Banjo's picture

I hope you got most of your AAPL stock back before iPhone and iPad started to go gangbusters.

 

Other market participants are all looking to get a slice of the consumer pie, samsung, google, amazon and others.

 

I would review some of Reggie Middletons posts re why AAPL is way overbought at this juncture.

 

I did not neg you, just figured you're not that sharp.

Tue, 02/21/2012 - 14:27 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

and RM has been completely fucking wrong, why don't you go back and review his posts and you can see how wrong he has been, all of his numbers on iphone sales have been way off, you know not what you are talking about, just look at apple's last earnings numbers instead of going to the RM trough

Tue, 02/21/2012 - 15:19 | Link to Comment Seer
Seer's picture

Eventually everyone who is trying to prop up the "growth" world is going to be wrong: RM is seemingly incapable of acknowledging this (continues to just promote more of what's totally unsustainable).

Reversal of economies of scale.  APPL's numbers are going to turn parabolically to the downside as austerity starts to permeate the globe: people will have to spend their time doing actual PHYSICAL labor and spending their hard-earned money on stuff that matters (like food).

Tue, 02/21/2012 - 14:46 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Since when does APPL have monetary properties? Since when does APPL exist? a blip by historical scale. The earth did not start in the 80s with Ronald Reagan, Madonna and Steve Jobs.

Tue, 02/21/2012 - 12:30 | Link to Comment SheepDog-One
SheepDog-One's picture

DOW 13,000....so now what? LOL what a clownshow.

Tue, 02/21/2012 - 14:02 | Link to Comment SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

LOL all theyre doing is inflating markets by printing money....what chicanery!!!!!

Tue, 02/21/2012 - 12:31 | Link to Comment SheepDog-One
SheepDog-One's picture

DOW 20,000, gold $20,000, gallon of gas $20,000.....allrightey then!

Tue, 02/21/2012 - 15:24 | Link to Comment Seer
Seer's picture

So, people will FINALLY be forced to learn math skills?

Always reminds me of this Beavis and Butt-Head skit:

http://www.imdb.com/title/tt0814634/quotes

Tue, 02/21/2012 - 12:33 | Link to Comment RockyRacoon
RockyRacoon's picture

The sheep are about to get sheared -- again.  The "retail investors" will pile in here and will be prime pickings.

Tue, 02/21/2012 - 12:35 | Link to Comment LouisDega
LouisDega's picture

Theres a tool for that. Its called the sell button

Tue, 02/21/2012 - 12:37 | Link to Comment resurger
resurger's picture

Stacking VXX & TVIX , and slaughter recommendation will be appreciate it Louis.

Tue, 02/21/2012 - 12:56 | Link to Comment slaughterer
slaughterer's picture

Hard to imagine "my" SPX 1380 given the probable future events (CAC, IMF uncertainty, Iran, technical selling, etc.).  I would say "OPERATION ROBO-KILL" should be taking place soon enough.  Maybe after a close or two above DOW 13000 to sucker in the last passengers for the elevator drop.  

**

You heard it first: markets are setting up for what more than one trading unit is calling "OPERATION ROBO-KILL" named after our own very beloved "Robot Trader."  The idea is to swiftly demoralize Perma-Bulls into selling at a loss.   

Tue, 02/21/2012 - 15:09 | Link to Comment shuckster
shuckster's picture

A little flash crash maybe? I'm sure they'll cancel the non-blackpool trades so that only the most dubious can profit from it.... the VIX will certainly be interesting to watch while the process is in action

Tue, 02/21/2012 - 12:36 | Link to Comment diesheepledie
diesheepledie's picture

Yes. There are still a few not yet in the corral. But it is almost time to harvest. :-) I am a little bit hard.

Tue, 02/21/2012 - 12:32 | Link to Comment rumblefish
rumblefish's picture

Three charts that perhaps will calm the nominal euphoria as Dow 13000 screams across the screens.

I don't know that it will calm the uphoria as I believe the masses won't comprehend this. I can just picture Obama talking about this in the fall.  Stock market is up and unemployment is down.

Tue, 02/21/2012 - 12:47 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Yes, with 5-8$ per gallon gas, winning!

Tue, 02/21/2012 - 12:35 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Lucky number 13K! Yay!

I'd just like to thank Dr. Bernanke. Without you none of this would be possible! There's someone I'm forgetting... um... oh, gosh ... [forehead slap]

Tue, 02/21/2012 - 12:34 | Link to Comment LouisDega
LouisDega's picture

And now ladies and gents, Its Hindenberg omen time. Who cares? it just sounded good. Rally on.

Tue, 02/21/2012 - 12:34 | Link to Comment NotApplicable
NotApplicable's picture

Green is good... no?

Tue, 02/21/2012 - 12:34 | Link to Comment goldencross10
goldencross10's picture

spam at 20,000 we'd need the presses to go HAM for another few yrs

Tue, 02/21/2012 - 12:36 | Link to Comment resurger
resurger's picture

13Kay, Okaaaaaaaay!

Is Robo contributing to all this? Or the sideliners have jumped in.

btw the Dow is up by 96% from the 2008 bottom.

Tue, 02/21/2012 - 12:35 | Link to Comment Esso
Esso's picture

When did the Dow first hit 13,000, the Clinton administration?

How high would the Dow have to be to equal the inflation adjusted 1990's peak?

How about the NASDAQ? LOL.

Tue, 02/21/2012 - 12:44 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

April 20, 2007 DOW @ 12,961.98 and should be at 14,169.87 today according to an annual rate of inflation of 9.3%.  At least that is according to the BLS Inflation Claculator.  I can't believe they would admit to 9.3% annual inflation. - http://www.bls.gov/data/inflation_calculator.htm

Tue, 02/21/2012 - 12:55 | Link to Comment resurger
resurger's picture

Hey Doc.

Thanks for the link Sir

Tue, 02/21/2012 - 13:08 | Link to Comment Esso
Esso's picture

I couldn't quickly find any historical charts of the 1990s peak but I found this on wiki:

"On May 3, 1999, the Dow achieved its first close above the 11,000 mark (11,014.70)."

So, poking 11,000 & 1999 into your BLS calculator, the Dow would have to be north of 30,000 just to be equal to what it was in the '90s. Super.

Thirty thousand, thirteen thousand, I guess they sound a lot alike anyway.

NASDAQ's still gonna be a whole 'nother story. :) 

Tue, 02/21/2012 - 13:19 | Link to Comment bpom
bpom's picture

The rates for an increase from 12,961.98 in 2007 to 14,169.87 now is 1.87% simple and 1.8% annualized, Dick.   ...Also 11000 in 1999 is 14965 now, or rates of 2.8% simple and 2.4% annualized.

Tue, 02/21/2012 - 15:16 | Link to Comment Midwest Prepper
Midwest Prepper's picture

Take a closer look at that calculator.  You read it wrong.  That is NOT the annualized rate of inflation that they are claiming.

Tue, 02/21/2012 - 15:33 | Link to Comment Willzyx
Willzyx's picture

You numbers may be off a bit, but this is a fun little game.  The point is the Dow has failed to keep up with even the most conservative measures of inflation.  Even if you reinvested dividends you would lag.  If I had time to kill, I'd try numbers for different indexes and time periods.

Tue, 02/21/2012 - 15:37 | Link to Comment Seer
Seer's picture

So, even WITH all the hyper-printing via QEs the DOW is STILL shy by about 9%?  Yeah, go DOW, DOW Number One!

It's like when I try to get my fire going in my wood stove, huffing and puffing at some dying coals hoping that if I just huff and puff MORE that those diminishing coals will multiply and get the fire going.  Continued huffing and puffing would only result with me passing out and, a dead fire.

No actual kindling or firewood has been added.  I suspect that people are suffering from a mass loss of oxygen to the brain...

Tue, 02/21/2012 - 12:36 | Link to Comment AC_Doctor
AC_Doctor's picture

Watching for the Death Cross then Dow Death Collapse...

Tue, 02/21/2012 - 15:52 | Link to Comment Seer
Seer's picture

NO!  Don't turn around and look, else you'll be sucked in and your soul will become zombie-fie'd!

Tue, 02/21/2012 - 12:36 | Link to Comment Comay Mierda
Comay Mierda's picture

thank you posting these charts.  in a money printing environment, everything has to be priced in gold in order to be truely valued.

Tue, 02/21/2012 - 12:39 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

OMG I've seen you somewhere before... You totally look like a zoomed-out version of a guy I saw once...

Tue, 02/21/2012 - 12:56 | Link to Comment Pladizow
Pladizow's picture

Unfortunately, I can say the same about your avatar and a peruvian hooker!

Tue, 02/21/2012 - 13:15 | Link to Comment LFMayor
LFMayor's picture

ROFL.  That's so filthy, I wish i could up arrow you again.

Tue, 02/21/2012 - 13:16 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

I have a little surprise for you, see this little guy:

http://www.zerohedge.com/news/dow-passes-13000-nominal-terms-here-real-p...

Guess what?

Tue, 02/21/2012 - 13:31 | Link to Comment Pladizow
Pladizow's picture

Are you saying, you are in fact a male smurf's anus?

Tue, 02/21/2012 - 12:36 | Link to Comment casey13
casey13's picture

This is what most people seem to miss. You can't value anything without a stable currency. The absolute value of the market is not relevant only the purchasing power it represents. This is why you can have rising prices in a depression. We ain't seen nothing yet.

Tue, 02/21/2012 - 13:25 | Link to Comment OutLookingIn
OutLookingIn's picture

Exactly. Most don't realize its not about price, but about value. Valuation is the key, in a devalued currency induced cost push inflation price world. As the value of fixed assets (real estate) deflate.

Indeed! DOW 20,000 ~ GOLD 20,000

Tue, 02/21/2012 - 15:57 | Link to Comment Seer
Seer's picture

As they say, it's all relative!

Been saying this for years with all the folks jawing on and on about what the price of a barrel of oil would be.

The REAL issue is affordability.

Tue, 02/21/2012 - 12:37 | Link to Comment nudlee
nudlee's picture

great time for a turnaround tuesday

Tue, 02/21/2012 - 12:38 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

Somewhere, the bot's are giving each other algo high fives...break out the vintage silicone.

Tue, 02/21/2012 - 13:00 | Link to Comment amadeusb4
amadeusb4's picture

FYI, silicone goes into bathroom caulk and boobies. Silicon goes into microchipped algo bots.

Tue, 02/21/2012 - 12:37 | Link to Comment battlestargalactica
battlestargalactica's picture

Is it just me or does that first graphic spread look alot like a giant Pac-Man mouth ready to devour us all?!?

Tue, 02/21/2012 - 13:06 | Link to Comment Frank N. Beans
Frank N. Beans's picture

no, it's the doomsday machine from Star Trek.  The only way to "kill" it was for Captain Kirk to fly right into its giant maw. At that point, it barfed everything up.  Or had a giant heartburn attack, I'm not sure which.

 

 

 

Tue, 02/21/2012 - 12:38 | Link to Comment Seasmoke
Seasmoke's picture

who the fuck believes in anything "real" any more

Tue, 02/21/2012 - 12:39 | Link to Comment Convolved Man
Convolved Man's picture

The "virtuous circle" is almost complete.

-The Bernank Chants

Tue, 02/21/2012 - 12:39 | Link to Comment Alex Kintner
Alex Kintner's picture

[In my best William Wallace accent]
Hoooooooold, Hoooooooold, Hoooooooold, Hoooooooooooooooooold! Sell!

Tue, 02/21/2012 - 13:32 | Link to Comment Grinder74
Grinder74's picture

You do look a little blue in the face.

Tue, 02/21/2012 - 12:39 | Link to Comment A Lunatic
A Lunatic's picture

Your recovery is your recovery and my recovery is my recovery............Economic Relativism, bitchez.

Tue, 02/21/2012 - 13:30 | Link to Comment Grinder74
Grinder74's picture

I hereby mandate you shall pay for my recovery no matter what your religious beliefs may be. 

Tue, 02/21/2012 - 13:03 | Link to Comment spastic_colon
spastic_colon's picture

Everything is priced for "re-election perfection and re-appointment anointment"......

You can say it like Jesse or Al, but more fun to say it like Eddie....

Tue, 02/21/2012 - 12:46 | Link to Comment fuu
fuu's picture

Green shootz.

Tue, 02/21/2012 - 12:47 | Link to Comment Monedas
Monedas's picture

$20 K DOW, $20 K GOLD, $200 CONDOMS, $200 PANTYLINERS.................That's what's next !  Monedas  2012  "Think the worst and you will find the truth !"....Mexican Proverb !

 

Tue, 02/21/2012 - 13:27 | Link to Comment Esso
Esso's picture

"Monedas 2012"

Nope, I'm voting for Kito. I heard he's promising to let people buy beer with foodstamps.

KITO 2012 SNAP BEER!

Tue, 02/21/2012 - 12:57 | Link to Comment taniquetil
taniquetil's picture

I'm calling it.

 

DOW 100,000

Tue, 02/21/2012 - 13:21 | Link to Comment dogbreath
dogbreath's picture

You were definately the first. lol.

Tue, 02/21/2012 - 13:36 | Link to Comment taniquetil
taniquetil's picture

Hey CNBC, give me a job, I'm ready coach!

 

"Dow soaring to 100,000? You heard it first on CNBC!"

Tue, 02/21/2012 - 12:57 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Dow 13k hats!  Get 'em while they're hot!!

Tue, 02/21/2012 - 12:59 | Link to Comment Shizzmoney
Shizzmoney's picture

It'll probably get to 14K until shits hits the fan.

I mean, the DOW is at 13K, yet we have U3 at around 8.3% (9% accordign to a GALLUP poll) and U6 at 15.2%. 

We've never had such great corporate profits.  We've never been more productive in our labor.  But yet we haven't had this much debt and our wages haven't risen one inch.

Huh?

Tue, 02/21/2012 - 13:00 | Link to Comment Esculent 69
Esculent 69's picture

get the dow to 20k then raid everyones 401k/ IRA/ Money Market/ Bonds/ Treasuries just so the only place to go to get any $ is the gubmint or the gubmint owned/ controlled banks.  

http://money.usnews.com/money/blogs/capital-commerce/2008/10/23/would-ob...

Remeber it's the Chicago way.

Tue, 02/21/2012 - 13:01 | Link to Comment Zola
Zola's picture

What about gold mining stocks in real terms ... PERPLEXING !!

Tue, 02/21/2012 - 13:03 | Link to Comment 10044
10044's picture

Do these fkers really believe dow 13k means cheap food and gas??

Tue, 02/21/2012 - 13:03 | Link to Comment gwar5
gwar5's picture

John Williams of Shadowstats says real inflation has been greater than 10% for the last two years, which just shows how effectively the MSM and the central planning propaganda machine can hide the truth. Double digit inflation is huge. Won´t take long now.

 

Killing the currency and access to energy is national suicide yet this is the course chosen for us by the clever ones in charge. I have lots of physical but I only feel morbid relief. It´s going to be like hearing the screams from the safety of a Titanic lifeboat as the music fades into darkness.

 

 

 

Tue, 02/21/2012 - 16:22 | Link to Comment Seer
Seer's picture

"Killing the currency and access to energy is national suicide yet this is the course chosen for us by the clever ones in charge."

That's the cost of growth.  They (and we) have been playing the game.  Nature's calling the game: A Hard Rain is gonna fall...

Tue, 02/21/2012 - 13:17 | Link to Comment tony bonn
tony bonn's picture

excellent, short and sweet.....gold is your northern star although the clouds of politburo pricing cause it to disappear at times....however, you can assume under current manipulation that gold is way under priced....

Tue, 02/21/2012 - 16:35 | Link to Comment Seer
Seer's picture

Gold is gold.  It is what it is.  It's FIAT that's capable of having the attribute of being under/over-priced.

Tue, 02/21/2012 - 13:31 | Link to Comment OutLookingIn
OutLookingIn's picture

"Its a cold breezy day on Wall Street..."

Tue, 02/21/2012 - 13:26 | Link to Comment Trader47
Trader47's picture

Just wait for QE infinity, as no Gov are going to pay zilch>> crack up boom, currency collapse, war of course,, Gold to the MOON

Tue, 02/21/2012 - 13:56 | Link to Comment Catullus
Catullus's picture

Did someone forward this to Roubini yet? Asshole.

Tue, 02/21/2012 - 16:48 | Link to Comment Seer
Seer's picture

Maybe relay it through RM?  I heard they were buddies...

Tue, 02/21/2012 - 14:38 | Link to Comment justanothernerd
justanothernerd's picture

The thing I never understand is why gold? Why not platinum, silver, or any other asset? Can you price the DOW in terms of average asset price (in case gold is actually in a bubble...)?

Tue, 02/21/2012 - 14:45 | Link to Comment devo
devo's picture

Because historically it is currency.

Tue, 02/21/2012 - 17:26 | Link to Comment Seer
Seer's picture

Twinkies!

How much "wealth" do you have?  With enough I'm sure that you could have a successful marketing campaign that would allow you to establish the next "currency."  Of course, doing so would likely result in depleting your wealth.  Maybe better off exchanging your fiat for gold rather than platinum (or Twinkies) AND marketing?

Tue, 02/21/2012 - 17:38 | Link to Comment Spigot
Spigot's picture

Gold's role in financial transactions is based on a multi millenia experience and the qualities of a material which make it very suitable for such use: It does not oxidize, it is easily assessable in term of its purity (search the term "touch stone" to read the history of how gold was assayed before chemical alaysis, its divisible without altering its properties, etc.

Platinum was not isolated as an element until some time in the 1800's, so was not known.

Silver was used, but is not readily assessible in terms of its purity. IE - the color does not change rapidly when mixing with other metals. And in fact mining and refining silver was more difficult that gold because gold generally was found as free metal in gravel or sand, where as silver mainly has to be refined from ore.

Tue, 02/21/2012 - 14:50 | Link to Comment Elmo The Great
Elmo The Great's picture

In a deflationary world what is more valuable gold or FRN (cash)?

Tue, 02/21/2012 - 15:01 | Link to Comment Piters
Piters's picture

If DOW Transportation is a Market Leader, then According to the 4h chart, we are testing the Neckline of the reversal pattern H/S. 

http://www.forexfactory.com/showthread.php?p=5405714#post5405714

Tue, 02/21/2012 - 15:33 | Link to Comment Pairadimes
Pairadimes's picture

Soon it will be time to brush up on the use of scientific notation.

Tue, 02/21/2012 - 16:00 | Link to Comment Spigot
Spigot's picture

DOW/Gold ratio is 7.5 and I expect it to drop to 2 or less. Also expect Gold/oil ratio to hew within its historical 7 to 15 range. If the hyperinflation gets going you can expect these ratios to be your guide.

Tue, 02/21/2012 - 17:31 | Link to Comment Seer
Seer's picture

"ratio to hew within its historical"

HA HA HA HA... Another person who thinks that this is just another cycle.  HA HA HA...

Wed, 02/22/2012 - 03:35 | Link to Comment sikefeier0728
sikefeier0728's picture

 

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