is it important that DOW hits new high, if national debt is highest in US history?

Question

seems those who are dancing over the DOW, have no experience balancing a checkbook.

Answer 1

Two separate issues, plus investment income is taxable.

And you'll note this time the stock markey is not on an artificial high of dot com companies whose business statement was "payback initial investors"... every Economics 101 student understands that is multi-level marketing, but Clinton's SEC got away with it.

Answer 2

There is now tie between the DOW and the state of the economy, unless you look at the example of 1929.

The DJIA expresses how the people who speculate on stocks feel about a core group of companies (changes from time to time).

The national debt may be a better indicator, but look to individual earnings by the working/consuming class for the best indicator.

You note that Washington uses a whole slew of indicators depending on what point they are trying to sell, like the athlete's foot-powder wholesale index 8-).

Just the fact that the average family needs two incomes these days is a sure indicator that the economy is in poor shape.

The huge swings that go on and are considered normal these days would have caused panic just a few years ago.

Today the DOW did close for the first time higher than it was at the end of the Clinton administration. Don't think it means much.

Answer 3

The DOW Average reaching a new high is completely irrelevant to the national debt. If you don't understand this, don't expect me to try to explain it.

It's not the same as balancing a checkbook. In fact, it's nowhere near like that.

Answer 4

The DOW is more directly a meter of Public Confidence. Than Economic Health.

As far as I know everyone that jumped off a building in a Superman costume seriously believed they could FLY

This only indicates that many people can not see the desperate shape America is in.

Hey got to go Wallmart has 5 qts. of oil and a filter on sale for $1.99

Go big Red Go

Answer 5

It's high because oil prices have come down to the low 60's from the high 80's. This takes pressure off inflation and thus off the Federal Reserve to keep raising rates. Somethings going to give pretty soon: A few key players will miss their quarterly numbers, oil will climb, a hurricane will strike the gulf, or any one of a dozen other events construed as bad news for the markets. Unfortunately, it has very little to do with the national debt. The markets are moved by fear and greed. Currently there's nothing to fear immediately, so they're moving up. Next week, who knows?

Answer 6

The DOW hasn't proven to be an effective indicator since the overvaluation boom in the late 1990's. It is too easily manipulated by speculation and short-term reporting.

I won't be doing any dance unless I see a positive trend over longer terms (10 years or more) and stock prices leveling from their overinflated or overly deflated values.

Answer 7

It would have been higher if the nation debt was lower, since the cost of capital would be lower. We have a lot of foreign money which has propped our economy with lower interest rates. Some have suggested we may become like Japan and reach a point of virtually no growth in the near future.

Answer 8

The Dow is a fix, they change company's all the time to enhance it. They take poor performers and knock them off and replace them with ones that are doing well and I really do not see how that can be construed as a win.

Answer 9

Yeah I bet you keep all your money in the mattress huh?
National debt is historically high during war time.
Bulletin.....we are at war.
Government income is also at an all time high, but spending is out pacing it. There are cuts that need to be made but the deficit and the stock market do not always relate to each other.

On September 1, 2006, The Government Released New Jobs Figures – 128,000 Jobs Created In August. The economy has created more than 1.7 million jobs over the past 12 months – and more than 5.7 million jobs since August 2003. Our economy has now added jobs for 36 straight months. The unemployment rate is 4.7 percent – below the average of each of the past four decades.

Per Capita Disposable Income Has Risen 9.2 Percent In Real Terms Since The Beginning Of 2001.
Total Wage And Salary Income Increased In Real Terms At An Annual Rate Of 3.3 Percent In The Second Quarter. This follows an 11 percent surge in the previous three months.

Answer 10

National debt as a percentage of GDP is historically low and the US has never defaulted on its debt as have many other nations. That is why investors and other countries continue to purchase our debt by the billions every day.

If the US were in such terrible financial shape as your question implies, why would rational investors with many other choices to invest their capital be so stupid?

Answer 11

Since I like to see the Dow be above six years ago I do not think there is any irrational exuberance here yet.