Sunday, October 17, 2010

Michigan Sentiment Index historic chart and does it mean a slip into a Double-Dip recession?

I thought I would go back and look at the data released on Friday concerning the Michigan Sentiment number and how it looks on a chart. Here in chart from is the Univ. of Michigan Consumer Sentiment index plotted back to 1998, by Haver Analytics.

The last few points is what has many concerned for a Double Dip recession. The level we are at now is the same as it was just when they say the recession ended, as is noted in the grey bar from 2008 to mid 2009. It was mid 2009 (June 30th) when the stock market was at 8,447 and Gold was at $934/ounce, and the Dow Gold ratio was 9.0. Today the Dow is at 11,062 while Gold is at $1367.50/ounce and the Dow Gold ratio is at 8.1 and heading lower. So the Dow had risen 2615 points or 31% since June 30th 2009 while Gold has risen 46.4%. Still think you made any real money which you can buy more Food/Products/assets with? I am expecting that the Michigan Sentiment number will drop after the election for next month and signal a returned concern to a double dip recession. It certainly will set the stage for a slow Christmas shopping season, no matter what you hear to the contrary. Bah, humbug!

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