Chart of The Day: World Market Performance, Post-Financial Crisis

Chart Courtesy of Chart of The Day

For some perspective on the post-financial crisis rally, today's chart illustrates how much of the downturn that occurred as a result of the financial crisis has been retraced by several major international stock market indices.

For example, the S&P 500 peaked at 1,565 back in October 9, 2007 and troughed at 677 back on March 9, 2009. A recent close for the S&P 500 was in the 1,848 neighborhood -- a retracement of +132% of its financial crisis bear market decline.

As today's chart illustrates, China (Shanghai Composite), Japan (Nikkei 225), India (S&P BSE Sensex), Germany (DAX), France (CAC 40) and the U.K. (FTSE 100) are all above their financial crisis lows (i.e. above 0% on today's chart) and three of the aforementioned countries (Germany, India and the U.K.) are currently trading above their respective pre-financial crisis peak (i.e. are above +100% on today's chart).

It is interesting to note that the U.S. (epicenter of the financial crisis) has outperformed the other major stock market indices (* keep in mind that the German DAX is unique in that it includes for the reinvestment of dividends) while China has lagged to the point where it only trades +9.3% above its financial crisis lows -- not that impressive of a performance considering that the financial crisis occurred well over four years ago.


Chart Courtesy of Chart of The Day

Rising Rates In Spain Does Not Bode Well For European Union Or The Global Economy...

Jim Rogers: Another Financial Crisis Likely...

The world is definitely going to face another financial crisis stemming from problems in Europe, Jim Rogers said recently.

"We're certainly going to have more crises coming out of Europe and America; the world is in trouble. The world has been spending staggering amounts of money that it doesn't have for a few decades now, and it's all coming home to roost," Rogers, CEO and chairman Rogers Holdings told CNBC.

He added that the crisis would be much worse than the one markets saw in 2008 because the debt is much higher now.

"Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again. Greece cannot double its debt again. The next time around is going to be much worse," Rogers said.

"In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still – be careful," he added.

Why This Is More Than Just Your Garden-Variety Recession...

An economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance suggest that this isn't your garden-variety recession.

Moreover you know it’s a more than just a typical recession when, 33 months after the onset of recession...

·         Wages & salaries are still down -3.7% from the prior peak;

·         Corporate profits are still down -20% from the peak;

·         Real GDP is still down -1.3% from the peak;

·         Industrial production is still down -7.2% from the peak;

·         Employment is still down -5.5% from the peak;

·         Retail sales are still down -4.5% from the peak;

·         Manufacturing orders are still down -22.1% from the peak;

·         Manufacturing shipments are still down -12.5% from the peak;

·         Exports are still down -9.2% from the peak;

·         Housing starts are still down -63.5% from the peak;

·         New home sales are still down -68.9% from the peak;

·         Existing home sales are still down -41.2% from the peak;

·         Non-residential construction is down -35.7% from the peak.

Unfortunately, in a normal recession-recovery cycle, practically all these indicators are making new highs at this juncture of the business cycle.