Stocks made a half-hearted attempt at a correction earlier this week, but quickly threw off their dole drums and resumed their seemingly unstoppable climb. Below I attempt to put this in perspective with a 2 year chart of the S&P 500. Briefly, stocks fell from their 2007 highs of about 1500 to a 2009 low of about 680. This is a fall of a bit over 50% in value. Since that low stocks have increased from about 680 to about 1020 - a rise of about 50%. However, the fall was 50% of 1500, and the rise was 50% of 680, leaving us still about 30% below the 2007 peak.
I saw a headline this week, "Single-family home building rises for 5th month." If all you read was the headline, you would likely think "See, housing is recovering and the recession is really ending." Here's some facts:
So what is the actual story? I think a more accurate headline would be "Foreclosures continue to mount, building permits and overall construction continue to drop off, but builders are rushing to finish a few more new homes before the new buyer tax credit expires on November 30th."