Dow now up under Obama

[Sam Spade]

Unemployment is probably not a lagging indicator in our scenario (actually, it could function both as a lagging indicator and a leading indicator).  There are a number of reasons why.

[Sam Spade]

The Dow resurfing is nothing to do with Obama.

In fact, it's simply the invisible hand, plus demand, re-correcting the market, which is currently undervalued.

Market currently undervalued?

By my present count, estimates for the SP 500 for 2009 are at around $42 per share (give or take a few dollars and I think that's still too high)

Historically, most bear markets bottom at single-digit P/E ratios.  The big bear market bottoms usually occur in single-digit P/E ratios of right around $5 per share (1932, 1949, 1982, I believe 1974 was around

Now, we can argue as to whether that number should be higher because of so much 401k investment.  It was certainly a higher number in the 2003 bottom.  Of course, there is an argument to be made that that bottom was not a real bottom and we have yet to see the true bottom, an idea built on the supposition that the secular bull market ended in 2000.

Anyway, the stock market is overvalued, not undervalued, in my mind, as was not undervalued at its lows in March.  (some companies may have been, but that's a different question).

[Sam Spade]

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Who made that claim, BRTD?

Sam Spade. He's hardly the only one I have in mind here though.

Yes, and I'm sticking to it.  Of course, you need to remember that there is the always the possibility of neither result. 

[Sam Spade]

The chart posted above would be interesting if the government didn't manipulate the numbers so much.

Basically, in comparison with last month, if you get rid of all the seasonal adjustment, birth-death stuff (and the Census jobs), there was basically little change from March.  You can argue things are stabilizing job-wise, but that's about it.