TCTI: Too Crazy Too Ignore
 Dave Ross
AP: bb1b7c48-86ae-4926-9f0b-f527f7cec271
The market yesterday blew right past its 2007 record, but here's what they don't tell you on your 401K statement: To truly match the 2007 record in terms of purchasing power, the Dow would have to gain 1,377 points this afternoon. (AP Photo/File)

The market breaks a record - or does it?

BY Dave Ross  on March 6, 2013 @ 6:27 am (Updated: 6:50 am - 3/6/13 )

Oh those were reassuring words on the news last night, as Scott Pelley said, "The stock market finally recovered all of what was lost during the great recession."

Yes - except those numbers leave out one teensy weensy factor: inflation, which has been low, but not zero.

The market yesterday blew right past its 2007 record, but here's what they don't tell you on your 401K statement: To truly match the 2007 record in terms of purchasing power, the Dow would have to gain 1,377 points this afternoon. And even if it did, all that would mean was that you matched inflation.

But wait - it turns out the real record wasn't in 2007!

The REAL record in terms of purchasing power was back in 2000. And to match that, the Dow would have to gain about 1,422 points this afternoon.

In fact, technically, you would be better off today if you'd pulled your money out of the market in 2000 and put it in a baggie than if you'd left it invested.

However, and this is why people keep buying stocks, you can easily manipulate the numbers to create a sense of hope. Because if you'd taken the money out of the baggie in March of 2009 at the bottom of the market, you would have doubled it by now!

$1000 in the S&P in March of 2009 would be $2,070 today. A million would have been $2,070,000. And if you'd been smart enough to invest $1 billion at he bottom of the market, you'd probably be serving ten years for insider trading.

More:
Calculate the inflation adjusted investment values

Dave Ross, KIRO Radio Talk Show Host
Dave Ross is co-host of The Ross & Burbank Show on KIRO Radio (weekdays 9-Noon) and never too far from the spotlight.
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Comments (30)


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  • SeattleD wrote...
    The most important thing
    March 6, 2013 6:05 am
    is that the booming stock market proves corporations thrive under Obama's taxes and regulations. Everything the Republitards have ever said continues to be proven a lie.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Paul Kersey wrote...
    and that comment
    March 6, 2013 6:13 am
    Proves that you are an idiot. But there was never a doubt about that. Go ahead fool, invest in the Ponzi.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • SeattleNative wrote...
    The reason the stock market is "booming"...
    March 6, 2013 8:05 am
    ...is because the Obama administration is handing $85 BILLION each and every month to Wall Street bankers to prop up their failed policies. Pull the plug on his handouts, and the whole thing comes crashing down.

    It's called QE3, idiot. Look it up.

    Meanwhile, Obama and his minions are running around like Chicken Little, saying "the sky is falling" because of sequestration, which is only $85 billion over two years.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    WOW, Dave. I'd think you and every other rich guy who plays the market would be overjoyed.
    March 6, 2013 6:11 am
    And Obama will undoubtedly tout this as proof of recovery. ... But, YOUR concerns of the effects of inflation aside, Wall Street is NOT, repeat NOT Main Street.

    Guess what, the average worker in this country does not play the stock market. And I'd wager virtually none of either the officially unemployed 7.8% or the 12M who've given up even looking for work play the stock market. ... Nor is this wonderful stock market news about to make things any better down at the supermarket.

    But, by the way, Dave. How's that Facebook stock coming along?

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • sportsguru wrote...
    I guess Obama as an anti capitalist
    March 6, 2013 6:14 am
    Argument goes flying out the window,lol. Now if we can get this spending money that we don't have thingy under control.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Fuego wrote...
    Glad to see
    March 6, 2013 6:42 am
    that everything is back to what it was like in 2007, except for the unemployment, price of gasoline, my home is worth double, the price of food etc. the Dow is just another bubble ready to burst once the curtain get pulled back and Bernanke isn't the great Oz after all.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • William Lawn wrote...
    The price of gas was $4.28
    March 6, 2013 7:01 am
    Six months before the Texas wonder left office.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • ron prevost wrote...
    Mr. Lawn - unless you are as math challanged as I am..........
    March 6, 2013 7:38 am
    six months before 1/20/2009 was mid 2008. Fuego cited 2007.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • daveismenotyou wrote...
    What was the price
    March 6, 2013 8:46 am
    six months later loser?
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • daveismenotyou wrote...
    That was for Lawn
    March 6, 2013 8:46 am
    not Ron. I am a poet who doesn't know it
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • WiIliam Lawn wrote...
    Bush got the price of fuel down to around $1.60 / gal before leaving office
    March 6, 2013 12:25 pm
    Obamanomics brought it back up to over $3/gal
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • SeattleNative wrote...
    Fuego
    March 6, 2013 8:09 am
    You hit the nail on the head. Obama is propping up his failed policies by using government printing presses to fund Wall Street.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • mnpat wrote...
    Market going up is better than going down and so becomes the new Administration talking point…
    March 6, 2013 7:48 am
    Less we forget that a leaked e-mail from the Agriculture Department field officer adds fuels to claims President O-guy’s political strategy is to make the billions in recent budget cuts as painful to win the public opinion battle against conservatives. KIRO’s staff has done an admirable job trying to fulfill the Administrations wishes as they have lambasted their listeners/readers with the dire warnings. It never surprises me that an openly liberal news show host dances around anything that might be construed as bad news. It is also not a surprise that according to a new Rasmussen Poll only 6% of Americans trust main stream media, some 50% somewhat trust and 43% distrust the game the media plays fulfilling their obligations to their ideology. There are numerous stories that main stream media can follow up with but in doing so would/could harm the perception of our current administration, but if morning KIRO can pull away from their blessings of the current president long enough maybe media can ask some tuff questions……six months after the Benghazi attacks, why is the administration not granting access to the survivors? Why during the time of a supposed painful sequester is our government giving significant military/financial aid to the Egyptians? How’s is that investigation going with fast and furious……I see we are trying to pass another new law to reign in weapons marketing, to bad this wasn’t around when our esteemed Attorney General assed on all those high powered weapons to the Mexican Cartels………….Let’s face it, the President is not trying to solve the budget problem. The President wants to raise taxes and redistribute income, everything else be damned. That is leadership, that is war on the American people.
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  • Chuck Gould wrote...
    Absolutely meaningless in the lives of most Americans
    March 6, 2013 8:08 am
    I came across an interesting video recently

    http://tinyurl.com/aoeqj9y

    Just over 5 minutes into the video, there's a statistic that shows the top 1% of Americans own 50% of all equities.

    The bottom 50%? The bottom 50% of Americans own a walloping 1/2 of 1% of stocks.

    Seems distorted, until also considering that the top 20% of the country now controls 93% of all wealth. The bottom 80% of us are sharing the remaining 7%.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • sportsguru wrote...
    Can't have it both ways.
    March 6, 2013 8:33 am

    Apparently, corporations are the back bone of our nation TODAY, not the middle class, the middle class is just people that want a handout that the government freely gives to the corporations.

    If you hurt private companies, the trickle down will not happen. So private companies are making record profits and keeping the profits, but if you take away these loopholes from corporations then you are an anti-capitalist and are destroying the fabric of this nation and promoting class warfare between the middle class and the "evil corporation".

    Unions, for which I am not a big fan of who actually get paid to work for the MIDDLE CLASS are considered the anti-christ to future growth of businesses because they want workers pay to increase with inflation to live. I am sorry people, but you can't have it both ways.

    Here is my pledge, any organization that is willing to ACTUALLY work for the middle class, I don't care if it is the Tea Party, Conservative Party, Libertarian Party or the Liberal Party, I will strap it up and go to war with you against ANYBODY including the president and give parts of my dwindling monies to support the cause.

    All this political double speak is just entertaining for a while, it starts to ring hollow over time and most of the comments on here is just political hyperbolic entertainment.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Chuck Gould wrote...
    Socialism is a disincentive....but not the only disincentive
    March 6, 2013 10:52 am
    So the average CEO now makes about 350 times what his *average* (not his lowest paid) employee makes. The wealthiest 20 percent of Americans control 93 percent of the national wealth. At first glance, it would seem the proper response ought to be "HOO-RAY! Capitalism is working! The people who have worked the hardest or been the luckiest are increasingly rewarded, and people who haven't been as lucky or haven't worked as hard are suffering for their bad luck and/or sloth!"

    Socialism, or similar redistribution of wealth on a per-capita basis, is a disincentive. If you're going to make 26,000 per year, regardless whether you work as a doctor, cab driver, dishwasher, widget salesman, or don't even work at all- nobody is going to put out the extra effort required to achieve anything more.

    However, when nearly all the wealth is sucked up by the upper few percent in the US, (the top 1% now earn 24% of all income), we risk another disincentive as well. When the middle class disappears, and the lifestyle of people working 40 or 50 hours per week isn't really distinguishable from people who choose not to work at all, that will become a disincentive to work as hard as the average middle class wage earner is currently working.

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • mnpat wrote...
    " we risk another disincentive as well. When the middle class disappears, and the lifestyle of people working 40 or 50 hours per week isn't really distinguishable from people who choose not to work at all
    March 6, 2013 10:59 am
    Exactly Chuck, which is why I'm not a happy camper at this time in my life or very happy with the current or past administrations.....a person works hard and loses any gain in taxes paid.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • heyjim55 wrote...
    Don't be fooled
    March 6, 2013 3:36 pm
    Giving credit to the presidents policies is foolish, if you have to give credit to anyone give it to the Fedral Reserve as they are inflating the Markets. They are pumping 89 billion dollars a month of fiat currency into the Markets. When you comapre the numbers to 2008 they are very close except unemployment is higher, the debt is higher, GDP is lower and so is growth at .1%. The 2008 numbers are taken just before the crash and by the way all the big players are selling out and getting out of the Markets and if they want out then something bad is coming.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • SeattleNative wrote...
    More than that...
    March 6, 2013 4:49 pm
    ...businesses all over America are having discussions...right now...about which employees' hours are going to be cut to help lessen the impact of Obamacare on their survivability.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Mavila wrote...
    As I said in the other thread on this subject...
    March 6, 2013 5:03 pm
    the fundamentals don't support the DOW. Another person here said that it's the result of fed pumping, which is exactly true. The prices are inflated artificially. Investors beware. It's a bubble to be sure.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • sportsguru wrote...
    Can't have it both ways.
    March 6, 2013 5:08 pm
    When O took office and the dow was down, it was because of his leadership and investor backlash to his policies. Now that the dow is at record high it's because O is pumping money into it. Which is it, you people are pure entertainment.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Mavila wrote...
    Obviously...
    March 6, 2013 5:28 pm
    you don't understand. But, you're not at all alone. Most people haven't a clue what is going on and that includes the intrepid reporters here on MYNW.

    The only economic indicator that is on the upswing is the DOW. Its performance is suspect because of the fed pumping money into the system and the banks gettin that money are investing in the DOW.

    That money has nowhere else to go but into the DOW because bond yields are next to nothing.

    All that money going into the stock market (demand) is artificially inflating the value of stocks. The fundamentals of this economy don't support the increase in value.

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