naked capitalism
And a little note from Marshall Auerback re the 5.7% GDP growth release yesterday:
Even if you use the government’s own massaged data, it suggests that we’ve had barely any growth at all and curiously, a massive rally in the stock market. I was chatting to Frank Veneroso about this yesterday. He pointed out that the giant gains in the stock market (after an 86% fall from 1929-1932) were accompanied by the most explosive fundamentals ever. The years after 1932 saw the most rapid advance in industrial production in the entire history of the U.S. economy. The market rose starting mid-1932 with a 14% rise in industrial production in a mere four months. It soon deeply corrected as a result of a fall in industrial production into early 1933 that wiped out all those very sizeable but brief production gains. The stock market’s biggest surge came off that early 1933 low. It was coincident with a 62% rise in industrial production in a mere four months. That outsized gain in the stock market and the one that followed it were obviously driven by extraordinary fundamentals.
By contrast, the almost 70% rise in the S&P since last March has occurred amidst a modest five percentage point rise in manufacturing production off its cycle low. And, in fact, there has been only a 2.6% increase in industrial production so far relative to March when the stock market rally began.
So viewed relative to the fundamentals, there has never, ever, ever been a stock market rally as outsized as the one since March of last year.
via naked capitalism.