Reviewing 11 Global Markets Since 2009

I find it helpful every once in a while to review how the major global markets have performed over any particular time span relative to each other.  In the charts below we take a look at 11 large markets going back to the March 2009 lows, using the S&P 500 as the benchmark.  The Russell 2000 is included for two reasons.  The first simply being the humorous side of that particular market since it represents the "riskier" assets and is therefore literally a plaything for those who have the ability to goose or influence markets at will.  All cynicism aside, the performance of the Russell over the past 4 years is actually very typical of a market in which the appetite for risk is relatively high.  And of course in a realm where the central banks of the world are more than happy to accommodate their minion manipulators with free liquidity, it is perfectly understandable that the small caps would have risen more than any other since the collapse of Lehman.  It's aggravating as hell to be sure but in truth it is nothing unusual.  I have to keep reminding myself of that fact.

The second reason the R2K is included is for that very same dynamic... sans the cynicism.  Because from a strictly analytical and logical standpoint there's no secret that the Russell leads in both directions since it reflects the appetite for risk.  And of course that's just standard procedure.  So it behooves us to keep tabs on the Russell since there is absolutely no doubt that if and when the markets ever begin to suffer the consequences of a withdrawal of liquidity, that particular index will lead to the downside.   In a bear cycle The Russell should drop first and it 'will' drop the hardest (of the North American markets).  That particular topic...the analysis of the relationship between the larger caps and the small caps... is an important enough metric on its own merit that it deserves to be the focus of a study all by itself.  Although that won't happen in this post, I have been meaning to really dive into that one and hope to get to it very soon.  Just haven't gotten around to it as of yet.

That aside, we move forward with what I find to be a very interesting look at what has occurred over the past four years with 2 US markets and 9 European bourses.  Due to limitations imposed by StockCharts we can only investigate 6 different indices on any single chart.  But we get around that issue simply enough by presenting two charts.  On both of them I have included the S&P 500 as the benchmark which most of us know like the back of our hands.  As well, we'll present the Austrian market (in white) on both charts just for convenient reference since it happens to fall in the middle of the pack.  So we begin... first with the S&P 500 and the other 5 markets within the USA and Europe that have risen the most since March, 2009:

The actual percentages of change can be seen in the upper left hand corner.  Right click the chart to open in a larger version (new tab)

What is perhaps most interesting is that the Paris market ($CAC) is not even in the top three for Europe.  We don't even see it in the chart above.  That is not to suggest that France is really any worse off than any of the other European markets, but it is a bit alarming to realize that for an equities market representing an economy of that size and importance, the CAC's performance has been pretty darned anemic.  In fact it is only sitting with a net gain since the Lehman lows that place it uncomfortably between the markets of Austria and Spain.  And the IBEX of Spain is currently sitting with a net gain since March 2009 of exactly zero.   That's the 'good' news.

Portugal

The markets of Portugal, Italy and Greece are all underwater compared to 4 years ago and it would appear that if there is any inkling of a deflationary phase on the horizon, France is likely next.  Yikes!  That's scary because the French and Italian economies are not little punks by any stretch of the imagination.  Those are huge participants in the larger European theater although they might be a bit better off if they were to, well... get to work a bit more often.  Who knows, with a little honest effort they could perhaps produce something innovative and stunning like the Germans have been known to do.

So using the Austrian market (in white) on both charts as a handy reference, we move to the next graphic and take a look at the 5 lagging markets whose performance has been lesser than that of Austria.  You'll only see 4 lines on the chart below the $ATX, but in the interest of clarity I left out the Italian market since it is at exactly the same level as the PTDOW (Portugal).  For all intents and purposes if you prefer you can just read the letters P-o-r-t-u-g-a-l as spelling "Italy".  But they don't really.  They spell Portugal  :-)  How beautiful is that landscape?

Right click chart for the option to open it in a new tab and see a much larger version.

And finally just a few general thoughts on the images above.  Although I find it to be absolutely infuriating to see the Russell 2000 sitting at 210% of its value at the 2009 low, I fully understand and accept that this type of performance is actually perfectly normal in a world where liquidity is ample and banks are pigs... whether that liquidity be temporary and artificial or not.  It's just that the banking monsters use that market as a tool for their criminal advantage and at the horrible and crushing expense of all pensioners worldwide, some of whom are 'your' closest friends.

Ravello, Italy

As for what might seem to have been my 'taking a jab at' southern Europeans for being a bit on the lazy side, let me expound on why I can understand that they have that attitude... to a certain extent.  The latitudes that provide some of the very nicest climates anywhere in the world just happen to reside somewhere between the southern Canadian border (49°) and about 35° N.  And naturally, my homeland doesn't fit into that zone.  But lo and behold, in the western hemisphere the United States and the Caribbean fit the bill beautifully.  But I don't particularly want to live in the United States these days although I certainly could have enjoyed that at one time.  So one day recently, while in a dreamy mood filled with wanderlust and visions of beautiful women, I drew lines all the around the world on Google Earth at those lucious latitudes to see which other countries resided between the lines.  And sure as shootin', the entire southern part of Europe is smack in the middle of it, Spain, Portugal, France, Italy, Corsica, Sardinia, Cyprus.  And of course Greece.  Those poor folks simply had the seriously inconvenient misfortune of having been born in some of the most outstanding, relaxing, beautiful, laziness-inducing scenic climates in the entire solar system.  From that perspective I envy those people more than I can express in words.

But one thing I learned in 6th grade that I've never forgotten was Ellsworth Huntington's Theory of environmental determinism.  Today more than ever I am 100% convinced that his thesis represents a huge key to understanding the mindset we see throughout all of southern Europe.  I don't blame those people for expressing the attitude they do nor for living the lifestyle they do.  It's oh so understandable.  In a nutshell, what Mr. Huntington's theory proposes is that the colder the climate is that people are living in, the harder working those people are.  The reasons are pretty darned basic as well; first, without gorgeous warm beaches crawling with beautiful people there's not a hell of a lot else except to find something useful to do, and secondly, it's basically a matter of survival.  It really boils down to the fact that in cold climates hard work is literally 'essential' in order to just keep from freezing to death.  As a long time resident of the Great White North I can testify to the veracity of that argument.  It's even worse during winter.

Those of us who live in the more northerly climes here in the west can't walk down the road and just pick a pineapple or a mango or a banana any time we feel like it.   And they can't do that in northern Europe either.  Bananas aren't exactly in season in Canada right now and they haven't been for the past 17 million years or so.  Although interestingly enough, archaeologists did cause quite a stir a few years ago when they uncovered what was first thought to be a fossil of a banana in northern Alberta from only 10,000 years ago... which later turned out to be nothing more than a frozen penis.  No surprise there!  But in the Mediterranean.... ah yes, you can get grapes there.

Santorini, Greece

But I fear greatly for the future for Europe as well as our own.  And as much as the people of the world might finally be ready to get off their asses and get to work right about now, it might be too late.  All it would take though would be a little cooperation from the global fascist oligarchy who run ruin run every country on this blue planet.  But unfortunately they're simply too greedy to cooperate.  All it would take is that the governments

STOP SPENDING AND START LENDING in large and equal amounts

But alas... as always, greed rules.

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Hat tip to 'westcoast' for providing a link to an excellent video series from PBS about the "Crash of '29".  Why does it seem like his timing is eerily 'right on schedule'?  Here's Part 1:

Until next time...

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