Hamilton's E-Wave Analysis

Chart of the Day

Chart of the Day - Another record high. How does the current rally rank_

There have been 13 rallies in the past 116 years after a 30%+ drop. That is one every 8.9 years on average. The chart shows the regression line and the 13 individual plots. The latest rally, that may not yet be complete of course, is roughly at the intersection of 200% and 2000 days.

What strikes me as particularly interesting is that despite the Greenspan, Bernanke, Yellen total preoccupation with easy money and the subsequent acceptance of that policy by almost all other major economies, Japan, China, Germany , the UK etc. etc., there is very little to show for their efforts. This rally is better than six others but worse than seven others. It is very much in the left hand bottom corner of this chart, precisely where you do not want to be.

For those that love the there is the very supportive thought that things would have been much and much worse without it (the mythical ceteris paribus clause in action). For those that think the Fed is very seriously misguided and barking up the wrong tree, myself included, there is clear empirical evidence that Mr. Keynes and his theories leave a lot to be desired in the present circumstances.