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FRED
10-22-06, 08:52 PM
Viewed From Abroad, the Dow at 12,000 Isn’t So Impressive (Registration) (http://www.nytimes.com/2006/10/21/business/21charts.html?_r=1&oref=sloginclick)
October 21, 2006 (FLOYD NORRIS - New York Times)

The Dow Jones industrial average is setting records in the United States, trading over the 12,000 level for the first time this week. But when adjusted for inflation, the American stock market lags behind those of many other countries, and appears to be going nowhere fast.

The chart accompanying this article shows the last 10 years of the Dow, with the level adjusted for changes in the Consumer Price Index. After adjusting for inflation, it remains around 15 percent below the highs it reached in 2000, and has made little progress in recent years.

AntiSpin: Better late than never. At long last the New York Times has caught up with our reclusive iTulip Real Dow (http://www.itulip.com/realdow.htm) expert, who has demonstrated for years that the Dow has averaged 1.64% real annual gains since 1924. Wall Street makes its money on trading the volatility, the ups a downs in the market.

It remains to be seen whether the NYTimes reports on future developments in the Dow through this lens, or whether this excellent report represents a passing moment of clarity. In any case, we award the NYTimes' Floyd Norris the iTulip Honesty in Financial Reporting Award. Well done! And continued deepest appreciation to our anonymous analyst for his originally creating the Real Dow analysis and his tireless effort at maintaining it for iTulip.


http://www.itulip.com/images/honestreporting.jpg
iTulip honors Floyd Norris of the New York Times

jk
10-22-06, 10:07 PM
it might be interesting to also have a curve adjusted for shadowstat's cpi.

Christoph von Gamm
10-23-06, 07:43 AM
it might be interesting to also have a curve adjusted for shadowstat's cpi.
No please... then you only get depressed...

Finster
10-23-06, 10:12 AM
it might be interesting to also have a curve adjusted for shadowstat's cpi.

Maybe, but why not just adjust for inflation? And instead of the thirty stock Dow Jones Industrial Average, look at the Dow Jones World stock index?

Turns out it doesn't matter what country you live in, the real performance of stocks as an asset class has been considerably less that what would be implied by the scaling of new records.

http://users.zoominternet.net/~fwuthering/Posts/RealStock.png

Jim Nickerson
10-23-06, 11:09 AM
So, Finster, what inflation number did you use to calculate your graph? The FDR or the BLS numbers.

Finster
10-23-06, 07:46 PM
So, Finster, what inflation number did you use to calculate your graph? The FDR or the BLS numbers.

In the above chart, the DJW is deflated by the FDI. Far as I know, BLS does not publish an index of inflation.

Jim Nickerson
10-23-06, 11:57 PM
In the above chart, the DJW is deflated by the FDI. Far as I know, BLS does not publish an index of inflation.

So what is the CPI-U published at [url]http://www.bls.gov/opub/ted/2006/oct/wk3/art04.htm[/url}?

Finster
10-24-06, 01:09 AM
So what is the CPI-U published at [url]http://www.bls.gov/opub/ted/2006/oct/wk3/art04.htm[/url}?

An index of consumer prices.