Stock Market Price - Cause for Celebration?

The Dow Jones Price versus its Value

In October of 2007 the Dow Jones climbed above 14,000.  Since then it's been below that.  Except for today, when it again went above 14,000.  The Major Media had orgasms.  Proof of recovery, they all said.  Business on the rebound.  A triumph of Obamanomics.

Really?

A 2007 dollar is $1.14 today.  What that means is, for the Dow Jones to be of equal value to what it was in October of 2007, it would have to exceed 16,000.

Still a ways to go.  Don't hold your breath.  In the meantime, remember that price is not the same as value.  The value of a 14,000 DOW today is actually 12,281 in 2007 terms, even though its price is 14,000.  You're paying more for less, in other words.

Put that Champagne back in its bottle.