About Stuart Levine


How Now Dow Jones--Introduction

This originally started on a page to discuss the stock market. I've determined that it makes sense to give it a page of its own.

From time to time, the business news headlines are something like "the Dow Jones Industrial Average has allegedly reached a [or dropped X points from its] 'historic all time high.'" This is baloney. On a constant dollar basis, the DJIA has been virtually flat since January of 2001. On this page, I track the decline of the DJIA since the beginning of the Bush Administration using as a metric the value of the dollar relative to other major world currencies.

The value of the dollar vis a vis other currencies has changed dramatically. To speak of highs or lows in the DJIA without taking into account the changing value of the dollar is tantamount to measuring a person's height with a yardstick, breaking the yardstick in half, and assuming that the one-half portion is the equivalent to the entire yardstick. Applying that assumption, one would conclude that the individual whose height is being measured doubled his or her height overnight.

The Federal Reserve publishes what it terms the "Nominal Major Currencies Dollar Index." As explained on its website (which can be found here) Here, I use the major currency index which is "a weighted average of the foreign exchange values of the U.S. dollar against a subset of currencies in the broad index that circulate widely outside the country of issue. The weights are derived from those in the broad index." The "broad index" "is a weighted average of the foreign exchange values of the U.S. dollar against the currencies of a large group of major U.S. trading partners. The index weights, which change over time, are derived from U.S. export shares and from U.S. and foreign import shares."

On January, 2001, the index was 103.5074. Thus, multiplying the DJIA on January 31, 2001, by 1.035074 gives us a starting baseline value. On January 31, 2001, the adjusted closing price for the DJIA was 10,887.36 making the value 11,269.2233. (Note: The index value of 103.5074 was the "monthly" value. The daily value, that is, the value on January 31, 2001 was slightly higher, 103.7930. Although I now use the daily value for the numerator, I have not changed the denominator. The difference is relatively trivial, since using the daily value for January 31, 2001, to compute the denominator would result in a adjusted closing price on that day of 11,300.317, only a 0.27591% difference.)

The Final Returns Are In

At the close of business on January 16, 2009, the Dow Jones Industrial Average Stood at 8281.22. The value of the dollar relative to major currencies was 0.797801. Thus, on a dollar adjusted basis, the DJIA declined over the eight years of the Bush Administration by over 41% to 58.62662% of its value at the start of the period.

December 5, 2008--Bottoms Up?

I don't compile this website in order to offer predictions on the market. Nevertheless, it seems to appear that the market may have, at long last, bottomed out, at least on a dollar adjusted basis. This week's figure is roughly the same as last weeks, which is pretty amazing given the steady stream of bad economic news. The chart is here:

DWJ Adjusted Graph51

November 28, 2008--No Turkey?

The currency adjusted DJIA jumped nicely this week. At the end of last week, the CADJIA was at 60.58029% of what it was when Bush became president. This week, it jumped to 64.8790351%, a hefty increase for a short week. The CADJIA is still down more than 35% during the period of the Bush disaster Presidency, but if the trend continues or even stabilizes, we will no longer be looking into an abyss.

The chart is here:

DWJ Adjusted Graph51

November 21, 2008--Are We Having Fun Yet?

The currency adjusted DJIA is now down to the second lowest point since I've been keeping score. That is, the CADJIA is now at 60.58029% of what it was when Bush became president. Not as low as the 59.9469147% level on October 10, but it's in the same ballpark. The difference, and then some, is due to the rise in the value of the dollar against foreign currencies. On October 10, the value was 79.9361. Today, it's 84.8443, a significant 6.140% increase in about a month and a half. Thus, even though the nominal DJI has fallen significantly, that fall is more than offset by the dollar's move up.

The chart is here:

DWJ Adjusted Graph51

November 14, 2008--You've Got to Admit It's Getting Better?

Well, yes and no. The week closed with the dollar adjusted DJIA down to 62.6292648% of what it was when Bush took office. In other words, on a dollar v. foreign currency adjusted basis, the DJIA has lost almost 37.4% of its value since the start of this Administration. In fact, it is only slightly above its all time week-end low of 59.9469147% that it hit on October 10, 2008. (There may have been inter-week lows that were lower, but I do not tabulate that figure.)

What is a ground for optimism is the fact that the foreign exchange rate of 69.2631 to 83.0596. Thus, if the DJIA has hit bottom and begins to trend up, the recovery on this chart will begin to look fairly remarkable.

Today's chart is here:

DWJ Adjusted Graph50

November 10, 2008

I was very busy the last couple of weeks and didn't update in a timely way. Below, I've posted an update with data points for October 31 and November 7. I would like to keep going once the Obama administration comes into office, but there should be changes. My thought would be to have some sort of running chart comparing Clinton, Bush, and Obama at various points in their administrations.

I would welcome any suggestions.

DWJ Adjusted Graph49

October 27, 2008

I was out of town on Friday, so I updated the chart as of 24th today. As of the close of business on Friday, the DJIA, on a currency adjusted basis, was only 61.8940006% of what it had been when Bush took office. In other words, the index has lost over 38% of its value over the last 93 months. The chart is here:

DWJ Adjusted Graph48

October 17, 2008

A slight uptick in the value of the adjusted DJIA, but it's still down more than 37% since Bush took office.

DWJ Adjusted Graph47

October 10, 2009

The currency adjusted DWIA has now lost over 40% of its value since Bush became the Current Occupant. (The percentage stands at 59.9469147%.) The current chart is here:

DWJ Adjusted Graph46

The S&P 500 has lost more than half of it value 50.503539% and the NASDAQ has lost more than that, specifically 54.096732%.

October 3, 2008

Before we get to this week's chart, I thought that it might be interesting to look at the changes in some broader indices over the course of the Bush Administration, adjusted, of course, for the decline in the value of the dollar.

On January 19, 2001, the dollar, relative to other major currencies, was at 103.9602. Today, it's at 77.126. On January 19, 2001, the S&P 500 closed at 1342.54. Today, it closed at 1099.23. Doing the arithmetic, we find that the S&P 500, adjusted for the value of the dollar, declined by 39.2571% (on the chart, it would have been at 60.74283) since Bush took office.

Also on January 19, 2001, the NASDAQ was at 2770.38. Today it closed at 1947.39, a loss of 45.806% (a level of 54.194 on the chart).

In other words, regardless of the index used, the equity markets have performed miserably under the seven plus years of George Bush, with the DJIA actually performing better than broader indices.

In any event, here's today's adjusted DJIA:

DWJ Adjusted Graph45

September 26, 2008

As Congress wrestled with the bailout bill, the adjusted DJIA declined, due both to a decline in the relative value of the dollar and to a decline in the nominal value of the average. The chart is here:

DWJ Adjusted Graph44

September 19, 2008

One thing about roller coaster rides: they end pretty much where they begin. That was the case with the adjusted DJIA even in a week that saw two massive falls in nominal price. However, by week's end, the nominal price was back at just slightly under where the week began and there had only been a slight decrease in the value of the dollar. The chart is here:

DWJ Adjusted Graph43

September 12, 2008

The adjusted DJIA had a significant uptick this week, primarily due to stock prices rather than an increase in the value of the dollar.

DWJ Adjusted Graph42

September 6, 2008

Due to the press of real work, I failed to post last week. The chart below shows the data points for both Friday, August 29 and Friday, September 5.

DWJ Adjusted Graph41

If the Adjusted DJIA charts haven't convinced you not to vote for McBush, consider these:

From Brad DeLong:

DeLong Employment Chart

Or this, from Paul Krugman:

Krugman Employment Chart

And, from David Cay Johnston, this article, which states that:

[T]ax return data show that during the first six years of the Clinton administration, average incomes, adjusted for inflation, grew 16.2 percent, by $7,665 to $54,875 in 1998. That is more than 10 times the average income growth from 2000 to 2006, the first six years of the Bush administration.

August 22, 2008

I've changed the format of the chart slightly, since I'm attempting to master the program that I use to create it.

In any event, this was a fairly flat week.

DWJ Adjusted Graph40

August 15, 2008

The dollar has bounced back, but the mediocre performance of the DJIA resulted in a basically flat adjusted DJIA.

DWJ Adjusted Graph39

August 8, 2008

Unfortunately, I missed posting last week. The chart below reflects both last week's closing and this week's. The huge uptick was due primarily to the rise in the value of the dollar versus other currencies.

DWJ Adjusted Graph29

July 25, 2008

The Adjusted DJIA was essentially flat this week. That means that the "nominal DJIA" was somewhat lower than last week, since the dollar was on an upward trend. The chart is here:

DWJ Adjusted Graph28

July 18, 2008

The Adjusted DJIA rebounded this week and is just short of 72% of its price when Bush took office. That means it's "only" lost 28% of its value in the last 7 1/2 years. The chart is here:

DWJ Adjusted Graph27

July 11, 2008

The Adjusted DJIA broke through the "70" barrier this week. That is, by week's end it had lost more that 30% from the level at which it was when Bush became president. The chart is here:

DWJ Adjusted Graph26

July 4, 2008

Happy Independence Day!

Even though the nominal DJIA declined this week, the adjusted DJIA was virtually unchanged because the value of the dollar rebounded to almost completely compensate for the nominal decrease. The chart is here:

DWJ Adjusted Graph25

June 27, 2008

Wow! In the last two weeks, both the nominal DJIA and the dollar index have fallen. The nominal DJIA has fallen from 12,209.81 to 11,453.42, a roughly 6.2% decline. The dollar has fallen from 70.9279 to 70.8004, a fairly modest 0.2% decline. The result is that the currency adjusted DJIA is now only 71.285964% of what it was when Bush took office. The chart is here:

DWJ Adjusted Graph24

By the way, I've made a slight change in the chart, running the numbers over a shorter period of time. This was done to avoid having the graph results "scrunched up."

Finally, either this week or next, I will be making some changes to the server that holds the charts. This may result in the charts disappearing for several hours, but I will attempt to keep the disruption to a minimum.

June 20, 2008

I am traveling this week. Next week I will post the data point for this Friday as well as next Friday.

June 13, 2008

The Adjusted DJIA picked up this week to 78.6809491% of what it was when Bush became president. I expect that it will continue to rise a U.S. inflation fears cause government borrowing rates to increase which, in turn, causes the Dollar to appreciate against other world currencies. The Adjusted DJIA chart is here:

DWJ Adjusted Graph23

June 06, 2008

The Adjusted DJIA dropped by about two and a half percentage points this week (from 79.281372 to 76.8636136). This means that, adjusted for the relative strength or weakness of the dollar against other major currencies, the Dow has declined more than 23% since Bush assumed office. The decline is attributable to the decline of the dollar which has a value of only 68.2399611% of its value on January 19, 2001. The Adjusted DJIA chart is here:

DWJ Adjusted Graph22

May 30, 2008

The Adjusted DJIA rose this week, primarily due to the increase in the value of the dollar. The chart is here:

DWJ Adjusted Graph21

May 23, 2008

Both the dollar and the DJIA fell fairly dramatically this week, resulting in a significant drop in the Adjusted DJIA. If the percentage point decrease next week (a short week) is the same, the Adjusted DJIA will be at its lowest point since Bush assumed office. The chart is here:

DWJ Adjusted Graph20

May 16, 2008

The dollar fell and the DJIA rose this week. The chart is here:

DWJ Adjusted Graph19

May 9, 2008

Both the DJIA and the dollar fell this week. As of the close of the market today, the adjusted DJIA is just a shade under 20% less than when Bush took office. The chart is here:

DWJ Adjusted Graph18

May 2, 2008

Both the DJIA and the dollar continued to climb upward. As of today's close, the adjusted DJIA is only a little over 17% less than when Bush took office. The chart is here:

DWJ Adjusted Graph17

April 26, 2008

The Currency Adjusted DJIA continues to improve. Although I haven't done precise calculations, my sense is that it's due primarily to the slow recovery of the dollar which is at a level that is higher than it's been at since late February.

BTW--Sorry for the last posting. In any event, here's the chart:

DWJ Adjusted Graph16

April 18, 2008

The adjusted DJIA took a sharp bounce this week due to both an increase in the DJIA and an increase in the value of the dollar. It is now only (only!!) about 80% of what it was when Bush took office.

DWJ Adjusted Graph15

April 11, 2008

For most of the week, the adjusted DJIA was flat. Then came Friday. The final result is here:

DWJ Adjusted Graph14

April 4, 2008

I made a slight error in my calculation last week, using the currency figure for Thursday the 27th rather than Friday the 28th. I have corrected that error in the chart below, but I have not corrected the chart for March 28th. The new chart is here:

DWJ Adjusted Graph13

March 28, 2008

The chart below is slightly incorrect. The correct result is shown on the chart for April 4, 2008 and thereafter.

The Currency Adjusted DJIA fell somewhat this week. At the end of the week, the Currency Adjusted DJIA stood at 75.879588% of its value when Bush took office, a dip of almost two points from the previous week. The revised chart is here:

DWJ Adjusted Graph12

March 21, 2008

The Currency Adjusted DJIA took a big bounce up this week with both the "nominal" number and the dollar exchange adjustment both rising. At the end of the (shortened) week, the Currency Adjusted DJIA stood at 77.6282973% of its value when Bush took office, a bump of almost four percentage points in the four trading day period. The revised chart is here:

DWJ Adjusted Graph11

March 14, 2008

The Currency Adjusted DJIA continued its relentless downward march this week, ending the week at only 73.8487219% of its value when Bush took office. The revised chart is here:

DWJ Adjusted Graph10

March 7, 2008

The DWIJ took a beating this week. Now, the Currency Adjusted DJIA reflects a loss of 25% since the start of the Bush Administration. Here's the chart:

DWJ Adjusted Graph9

February 29, 2008

No chart was posted last week due to technical difficulties. This week, the Currency Adjusted DJIA suffered a major loss primarily due to the fall in the dollar. The Currency Adjusted DJIA from the start of the Bush II administration is now only 77.1170449% of what it was at the start. This is the chart:

DWJ Adjusted Graph8

February 16, 2008

I have revamped this page by having an introduction and then putting the most recent results toward the top of the page.

This week, I was reminded that the DJIA can be skewed by virtue of its selection of the thirty companies whose stock is used to calculate the average. In essence, periodically stocks that are in long-term decline are jettisoned from the average and replaced by stocks in companies whose relative value has been increasing. Thus, over time, the DJIA may gives a somewhat rosier picture of the market than is actually the case.

I took the occasion to look at the results of broader indices during the period of both the Clinton and the Bush Administrations. In each case, I assumed that the index value at roughly the start of the relevant administration (January 29, 1993, for Clinton, and January 31, 2001, for Bush) was 100. The results are as follows:

Clinton 372.79649
Bush 79.64109

In other words, when adjusted for the value of the dollar, the DJIA almost quadrupled under Clinton, but fell over 20% (and counting) under Bush. (Note that there is a slight variance in the Bush figure used in the weekly chart, since there the denominator is based on the January, 2001 monthly dollar value, rather than the January 31, 2001 value.)

Clinton 352.84845
Bush 69.39568

Here, the loss during the Bush term is over 30% (and counting).

Clinton 252.58652
Bush 96.90396

The Russell 2000 is a very broadly based index. Thus, it lacks the wild fluctuations that frequently affect the other indices. This is the only index with respect to which one would not have lost his or her shirt during the Bush Administration. However, even this conservative index registered a significant gain in currently adjusted value during the Clinton Administration.

Clinton 451.30216
Bush 58.79941

This, of course, dramatically illustrates the affects of the burst of the tech bubble. However, by January 31, 2001, the process of the bubble burst was well underway. In nominal terms, by January 31, 2001, the NASDAQ had declined almost 50% from its March 10, 2000, nominal historic high. (The currency adjusted loss was not as great, since the relative value of the dollar continued to climb from March 20, 2000, to January 31, 2001.) The NASDAQ is the only index that is not higher, in nominal terms, than it was at the start of the Bush Administration.

February 15, 2008

This week's Currency Adjusted DJIA illustrates the effect of the falling dollar. The Currency Adjusted DJIA was actually up by a fraction of a percent to 79.860841% from the start of the Bush Administration. This compares to 79.1422786% at the end of last week. Here's the chart:

DWJ Adjusted Graph7

However, the DJIA, unadjusted and compared to itself, rose by 1.596847%. Why, then, didn't the Currency Adjusted DJIA rise that much? Because the dollar, when measured against major currencies, fell by 0.4492464%. And that, in a sense, is the entire lesson of this site.

February 1, 2008

The "currency adjusted value" of the DJIA actually rose this week to 81.6592855%. The chart is here:

DWJ Adjusted Graph5

February 8, 2008

The "currency adjusted value" of the DJIA fell to 79.1422786%, just a shade over its January 25th value.

DWJ Adjusted Graph6

January 25, 2008

I had some thoughts about a mid-week posting. I'm glad that I resisted, since by posting only at the end of a week there's a certain consistency to the chart and trend line.

In any event, as of the close of business on the 25th, the "currency adjusted value" of the DJIA is 78.8725275%. Here's the chart:

DWJ Adjusted Graph4

January 18, 2008

Well, the market did get walloped. As of the close of business on Friday, January 18, the "currency adjusted value" of the DJIA is only 79.0764687% of its value as of January 31, 2001. The chart looks like this:

DWJ Adjusted Graph3

January 18, 2008

Because the market was getting walloped this week, I had an interesting thought: The "currency adjusted value" of the DJIA under Bush is about 80% of what it was when he took office. How does that compare with the results under Bill Clinton?

Running the numbers, we find that the "currency adjusted value" of the DJIA when Clinton left office was 372.796505% of the value when he first took office. In other words, in currency adjusted terms, the DJIA under Bush has lost about 20% (and counting) while it increased more than 3.7 fold under Bill.

So let's ask Wall Street: Are you better off today than you were seven years ago?

January 11, 2008

As of Friday, January 11, 2008, the DJIA "currency adjusted value" compared to its "currency adjusted value" as of the end of January, 2001, was 82.054659. The new chart is here:

DWJ Adjusted Graph2

January 06, 2008

I figured out how to graph the statistics using the OpenOffice spreadsheet program. The result for the last four weeks is here. Over the next week, I will attempt to create a graph with more data points.

DWJ Adjusted Graph

January 04, 2008

As of Friday, January 04, 2008, the DJIA "currency adjusted value" compared to its "currency adjusted value" as of the end of January, 2001 was 82.646361%.

December 28, 2007

As of Friday, December 28, 2007, the DJIA "currency adjusted value" compared to its "currency adjusted value" as of the end of January, 2001 was 86.5209741%. A good deal of the loss was due to the weakness of the dollar which closed the week at 98.3106993% of its close on the 21st.

December 21, 2007

As of Friday, December 21, 2007, the DJIA "currency adjusted value" compared to its "currency adjusted value" as of the end of January, 2001 was 88.5659233%.

December 14, 2007

Absent some extreme movement in either the Dow or the dollar/foreign currency index, I will publish adjusted numbers as of the close of business each Friday. As of Friday, December 14, 2007, the DJIA "currency adjusted value" compared to its "currency adjusted value" as of the end of January, 2001, was 87.7360888%.

December 10, 2007

Since I had followed the drop in the Dow, I felt it only reasonable to follow its recovery. As of the close of trading today, the Dow's "currency adjusted value" was 89.356091% of its "currency adjusted value" as of the end of January, 2001.

November 24, 2007

As of the close of business on November 23, 2007, just three trading days after the above report of November 19, the "currency adjusted" DJIA is now 83.125% of what it was at the end of January, 2001. This decrease is primarily due to the drop in the value of the U.S. Dollar.

November 19, 2007

The adjusted closing price for the DJIA on November 19, 2007, was 12,958.44. The dollar has also fallen since October 4, 2007, and has an index value of only 72.6047, making the final adjusted value 9,408.44. In other words, when tied to other currencies, the DJIA is 83.49% of what it was at the end of January, 2001.

October 4, 2007

The adjusted closing price for the DJIA on October 4, 2007, was 13,974.31. However, by October, 2007, the value of the dollar on the "Nominal Major Currencies Dollar Index" fell to 74.6624. Multiplying 13,974.31 by 0.746624 we find that the real value of the DJIA on October 4, 2007, was only 10,433.5552.

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changed January 19, 2009