Dow Jones All-Time High this Tuesday. Caveat emptor.
The Dow Jones Industrial Average, which measures the stock price performance of 30 companies that are representative of our economy, hit an all-time high on Tuesday, surpassing the previous all-time high set in 2007 before the financial crisis. What makes the record so worrying is that underlying economic condition apparently are having no impact on stock prices. As ZeroHedge blogger Tyler Durden (no, not that Tyler Durden) points out, by most metrics our economy is in far worse shape now than in 2007:
- U.S. debt as a percentage of GDP has gone from 38 percent to over 74 percent
- The U.S. deficit has gone from $97 billion to over $975 billion
- U.S. debt outstanding has ballooned from $8 trillion to nearly $16.5 trillion
- Consumer confidence has plunged from 99.5 to 69.6
Much of the rise in stock prices may be due to the fact that investors are tired of earning zero or nearly zero on their cash holdings and are choosing to invest in equities reluctantly.
A little about Mike Periu
Mike is a seasoned executive with experience in small business finance and management. He is the founder of Proximo, LLC a leading provider of corporate, consumer and small business education and training services with an emphasis on finance and technology.
Mike Periu is also a leading national voice for individual empowerment through financial education and entrepreneurship. He has been interviewed over 500 times in national and international media, including NBC, Univision, CNN en español, Telemundo, HITN, TVE, RTE, SBS, MegaTV and others.
Mike writes regularly for American Express OpenForum, Yahoo! Finanzas and is a Huffington Post contributor.
Mike has degrees in Finance and International Business from Georgetown University. He is on the Board of Directors of the Council for Economic Education and was a Fellow at the Kauffman Foundation’s Labs for Enterprise Creation.
