Misery at an All Time High

The Misery Index was conceived by Arthur Okun, an economist at Yale University and the Brookings Institution who served as an adviser to Presidents John F. Kennedy and Lyndon Johnson. Currently, it stands at 12.8, the highest in 28 years. The chart below (idea for post borrowed from Financial Armageddon) depicts the relationship between consumer confidence indices & the Misery Index.

Well, Americans haven’t felt this bad in three decades! The moot question then is that if this is the peak and if some reversal to the mean is expected, does it mean that things are going to get better from here on? Is there any “Scepticism Index” of equity investing as well? That people loathe and shun the stock markets like the plague. If miserable people are also paranoid about equity, then yes, behaviourally at least, we may well be on the verge of a recovery. Who knows!

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About Kaushal
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One Response to Misery at an All Time High

  1. 666 says:

    There is the VIX on the Chicago exchange (CBOE or something). The VIX is somewhat close to what you call ‘scepticism index’

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