Dow Above 10,000: The Audacity of Hope Collides with Saturn and Pluto
As Jupiter turned direct this week, the Dow rose above 10,000 for the first time in over a year, inspiring many financial experts to crow that the recession is over. The stock market has been in a continual upward climb since it fell to its lowest level in March of this year, driven primarily by optimism that an improving housing market and the recovery of the financial companies will drive the economy back into gear.We can tie this recovery to a conjunction of Jupiter, Chiron and Neptune that began back in February and while for many people this has been a planetary cycle of deep personal growth, there is always the danger when Jupiter’s optimism combines with Neptune’s propensity to ignore the facts that we fall into illusion.
Articles like this entitled “Record Streak Continues for Pending Home Sales” are fueling the optimism: “Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the National Association of Realtors®.” This is deceptive in a couple of ways: first, the market seven months ago was at its worst in decades; and second, much of the increase in home sales is driven by the tax credit for first-time home buyers. Meanwhile, foreclosure levels just hit a new record, affecting 1 in 136 American homeowners. More foreclosures means more housing inventory, which means a continued slide in prices.
A drop in the number of people filing for unemployment insurance also fueled optimism on Wall Street, but these numbers don’t reflect the vast numbers of people whose right to unemployment insurance has expired. The national unemployment rate of 9.8% does not include the numbers of workers who have given […]