Thursday, April 15, 2010

Greece, Market and More

by Bill McBride on 4/15/2010 03:55:00 PM

A few links ...

Stock Market Crashes Click on graph for larger image in new window.

This graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

  • Henry Blodget at Business Insider has an update of the cyclically adjusted PE ratio (CAPE). (ht Mark)
    Measured using our favorite valuation technique, Professor Shiller's cyclically adjusted PE analysis, the S&P 500 has a PE of 22X. The long-term average (1880-2010) is about 16X. The current level is actually close to the big bull market peaks of the past--with the exception of the gigantic one that peaked in 2000.
  • From the Financial Times: Greece takes key step towards rescue
    Greece capitulated ... took an important step towards a bail-out from its eurozone partners and the International Monetary Fund as it formally sought “consultations” over a €30bn-plus ($40bn, £26bn) loan package to stave off default.

    ... Greece’s finance minister, George Papaconstantinou, said Athens wanted to discuss “a multi-year economic policy programme with the Commission, the European Central Bank and the International Monetary Fund”.
    excerpt with permission
  • On Industrial Production from Spencer at Angry Bear (see graph):
    Historically, recoveries have been proportional to the recessions -- severe recessions have strong recoveries and mild recessions have weak recoveries. So far the recovery in industrial production this cycle looks about average. But given the depth and severity of the recessions an average rebound is disappointing.
  • And Professor Hamilton has More on oil prices and the economic recovery