Time to Pop the Corks?

We reached a milestone on Friday, when the Dow Jones Industrial Average climbed back to the point at which it started 2009, meaning all the losses of this spring have been erased. The Dow began the year at 8,776, but bottomed out on March 9 at 6,457. That was the index's lowest point in 12 years. In the three months since then, the Dow has gained 34 percent, finishing last week at 8,799.

That 34 percent gain has come over 68 trading days. We haven't seen the Dow rise that much in that short of a time since November 1982. At that point, we were coming out of the 1981-82 recession, an economic downturn that was in some ways even worse than what we've been seeing for the past 18 months. That runup in the Dow kicked off the bull market of the 1980s, which lasted for almost five years.

Now, no one is saying that we're destined for a rerun of the go-go Eighties. For one thing, the Dow recently got an artificial boost by dropping General Motors and Citigroup and replacing them with Cisco and Travelers. If GM were still part of the Dow, we wouldn't have reached those 2008 levels yet. And of course, the unemployment figures continue to be distressing. But we can take solace in the fact that the end of the recession is unfolding just as we expected, with the markets returning first, to be followed - at some point - by the jobs numbers and the housing market.