Sunday, December 13, 2009

2009 Worldwide Bull Market Rally: Stock Markets Gain 60%, $17 Trillion in Value Since Early 2009

The value of world stock markets increased by $1.6 trillion in November (data here) to $45.4 trillion, the highest level for total world stock market capitalization since August 2008 (see chart above).  The world's stock markets have increased in value eight out of the last nine months, and world markets have gained $17 trillion in market capitalization since the February bottom of $28.7 trillion, representing almost a 60% increase this year.   

Over the last year, 51 out of the 53 stock markets tracked by the World Federation of Exchanges have registered positive gains in market capitalization, and some stock markets have more than doubled in value since November 2008 including Brazil (+119%), India (+121%), Indonesia (+145%), and China (+146%). 

MP: Add this as another V-sign of economic recovery here and around the world, see Scott Grannis for his growing list of V-signs: strong retail sales growth, car salesemployment and the ISM index.


At 12/13/2009 10:16 AM, Anonymous Anonymous said...

With this surge in Stock Market prices and looking back just two cycles, Oct. 2007 and Dec. 1999, wouldn't it be wise to get out now and wait out a year?
Jim V

At 12/13/2009 2:04 PM, Anonymous American Delight said...

Jim V, are you invested in an index of world markets?

At 12/13/2009 5:25 PM, Blogger juandos said...

Benjamin Weingarten isn't impressed...:-)

At 12/13/2009 5:31 PM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

Die recession, die, die, die!

I predict another 20-year global GDP boom, with all the usual hiccups, scare, busts, booms etc.

But in the end, global GDP will be up 2-4 percent annually.

Investors beware: Lots of investment capital being generated constantly. Capital gluts mean good times, but hard investing. Lots of competition.

The USA will be a laggard in in this boom, but we will participate. We have as anchors our social welfare programs, a parasitic military-industrial complex, an extensively subsidized rural economy, and we will never balance our federal budget.

Why never? Look at federal outlays that are financed by income taxes (excludes Social Security and Medicare). More than 60 percent of those outlays are for defense, agriculture, VA, and Homeland Security and debt repayment.
Those are all sacred cows by the very people who want income tax cuts.

Ad to that the D-Party weakness for social welfare spending, and you get permanent red ink.

Invest in Asia, you may want to move to Thailand.

There is an interesting idea that the dollar weakens, and the US export picture brightens, and that strengthens our economy. Time will tell.

At 12/13/2009 7:37 PM, Blogger BxCapricorn said...

You always nail the top. Thanks in advance for killing the rally. You do realize Dubai defaults tomorrow and that oil has already started it's massive move downward.

The market is leveraged, therefore, how much it is leveraged dictates the value. The value's not real. Every time the trade has to be reversed to cover, we fall back down to the invisible moving average.

Put another way, the Feds put $2T back into the banking system so that it could be leveraged up and create $16-20T. Hey, we recovered! And since the Fed knows it cannot increase interest rates, there is nothing other than the defaults of the most highly leveraged (Iceland, various brokerage trading arms, Dubai, Hungary, Greece, soon to be Italy, UK, Spain debt-holders) who go by the waist-side and warn us all of how ridiculous ultra-Keynesian models truly are.

At 12/13/2009 7:48 PM, Anonymous gettingrational said...

Goldman Sachs says there will be 2009 year-end rally and the country to invest in 2010 is: Drumroll Please,RUSSIA!

Who is going to argue with the greatest group of financial engineers of all time?

At 12/13/2009 11:37 PM, Blogger Benjamin said...

Getting Rational: Russia? I think Russia is a terrible place, where rule of law is very iffy, and run by thugs.

Far East and Southeast Asia look very appealing.

There are publicly traded palm oil companies on the Thai set. Good yields, no debt, steady growth. Buy and hold for 20 years, collect dividends.

At 12/14/2009 9:47 AM, Blogger GordoM said...

The current Medicare Part A unfunded mandate (that's money we're already going to spend, guaranteed!) equals the total value of EVERY listed company on EVERY stock exchange in the WORLD!

Is anyone worried?


At 12/14/2009 10:50 AM, Blogger Methinks said...

Let's see....

The interest rate in the U.S. is as low as zero and we've exported that to Asia. So, if we artificially reduce the discount rate, then asset prices rise. Very good. We have a V shaped asset inflation.

At 12/14/2009 2:07 PM, Anonymous Anonymous said...

American Delight asks 'are you invested in an index of world markets', rising tide raises all boats, receding tide drops all boats. Unless in cash no one did do well from Oct. 2007 to March 2009? We have spiked almost 100% from the bottom, which was too low, but are we now too high, if so it will be too high for all stocks. Those who followed Rubini and Schiff and Soros in Mid 2007 are doing a little better off. Asking the question, don't know the answer. JimV

At 12/14/2009 3:23 PM, Anonymous Ingo said...

Except for all the indices which are showing pessimism and contraction. It's beginning to sound like the IPCC here.

I'm with the others. The apparent V in securities prices is a government induced bubble and will all soon come crashing down. Get ready for the big W. The Fed's balance sheet is flush with agency MBS and their purchase program is 85% done. That means mortgage rates will start rising soon, killing the housing market. There will be between 400 and 500 bank failures in 2010.

Throw in Obamacare, more wasteful spending, and the expiration of the Bush tax cuts and you have the making of fiscal and financial ruin. This is a great time to buy a house if you're planning on living in it for 30 years. Otherwise you're throwing money away.

Don't say we didn't warn you.

At 12/14/2009 3:55 PM, Blogger BxCapricorn said...

Oooh, Abu Dhabi saved the can see the exact minute they came forward...

on the US Dollar Index, when it hit 76.545....your BDI call continues to slide though professor...and oil continues to drop. I like that Thailand call by another commenter.

At 12/15/2009 12:07 AM, Anonymous Tea Vera said...

You can forget about the BDI BXCapricorn. Professor Perry forgets it exists any time it's down and suddenly remembers it when it's up. It doesn't even matter that the basic assumptions which make supposedly give the BDI explanatory power don't hold.

You can tell an index was down when it's not mentioned here.

At 12/15/2009 8:37 AM, Anonymous niknak said...

Look where the stock market was at its peak! And we know what happened next,

It doesn't mean shit, the fundamentals are worse now than they were before.

Higher national debt, higher unemployment etc. etc.

Nothing has changed.


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