You don't take the S&P or Dow Jones to the grocery store. The paper "wealth" in the markets is largely dependent on the continuous supply of "bigger fools" who buy your share for more money than you paid for it. The equity markets in this sense are a sophisticated ponzi scheme. If you buy an insignificant amount of shares from a non dividend paying company, you get nothing in terms of "real intrinsic value" You can't demand or exchange your proportion of ownership for the same proportion of earnings/assets(and you don't get any real say in what the company does either). What you do get, is a hope that somebody will pay more for your stake.
The markets have not done anything for 10 years. It could easily turn to 20.
I don't want to be like Kudlow&Dennis Kneal who use the markets as the ultimate oracle. The markets(with the exception of NASDAQ of course) made their tops just as subprime mortgage was getting into high gear and set the stage for financial armageddon. What that means is that markets don't know/ understand shit and can't be used as objective indicators of economic health.
Whether you are talking about deficits, unemployment levels, "deleveraging", housing, we are still in bad shape. There is nothing to celebrate. I would measure the wealth of joe sixpack by the proportion of his income (if he has a job!) going to pay expenses, level of savings, etc. I think it is tragic that the financial industry convinced the general public that the financial markets can be a wealth generating device for society at large and a way to pay for your retirement.
