Happy Anniversary “Lows”

Around a year ago, world markets witnessed all time low figures (after global crisis). On March 9, 2009, MSCI all-economy world index exhibited numbers that are rarely seen throughout the world.

In less than 16 months, value of stocks fell by around 60%, which is a considerable fall in any market. This year, however, the stocks rallied back and recovered around 80% till January 2010. And people started becoming optimistic about the fundamentals that drove the market.

With worries about Euro debt, equity markets are definitely not optimistic today, which now questions the recovery of the US economy and futility of several stimulus packages. Post January, we have seen a gradual fall in the market. It seems that MSCI index is going through tough times. Probably it needs few more stimulus packages.

Few experts, on Tuesday, commented about current market instability. From Odey Asset Management, Crispin Odey said, “Having hoped that March of last year might have proved to be the long term bottom for the developed markets, I am now much less sure.”

The recent rise in market is because investors are pumping in millions of dollars believing things will change soon, few believed. It, however, seems that every minute surge in the market was mainly due to millions invested by the government and not investors.

And if stock market represent growth of an economy, what about the unemployment rate? It’s not rising, but it’s not getting any better either. Even export market is being slowly strangled due to strengthening dollar. The situation can be best described as bunch of penguins (few ones that survived the storm) dancing on a piece of ice, which will melt sooner than expected. And we cannot expect much help from other economies as they are quite busy saving their own boats.

However, let’s not be as worrywart as Odey and rejoice that stocks are still 73% higher than they were in March 2009.