Absolutely brilliant table on Briefing.com this morning explaining why the rally off the March 9, 2009 low is a great short-term bull market but why longer-term the bear remains in control.
The jargon for those who care is that this is a cyclical bull inside a secular bear. The last great secular bull market stretched from 1982-2000, Briefing.com points out. And the conditions that produced that huge long-term running of the bulls couldn’t be more different from today’s fundamentals.
I think Briefing’s chart shows that more convincingly than a truck load of words.
“The table below encapsulates this concerning message with a presentation of what key data points revealed at the end of 1981 and what those same data points are showing today.
(a) For individuals with taxable income over $212,000 (source: National Taxpayers Union)
(b) For individuals with income over $357,700
(c) This will jump to 20% after 2010
(d) Source: Fed’s Survey of Consumer Finances (1983 earliest publication)
(e) CBO’s Baseline Budget Outlook
Briefing.com’s Patrick O’Hare goes on to say that while the comparison doesn’t say that the current rally is about to end, it does cast doubt on the argument that we’re in a new long-term bull market.
Briefing.com is, in my opinion, one of the most valuable sites for investing news and commentary. Check it out. I think you’ll find it worth the subscription.