EQUITY INDICES all over the world have scaling newer highs while the unemployment rates are rising. To quote Bloomberg news,"The unemployment rate in the three months through July rose to 7.9 percent, the most since 1996, the statistics office(UK) said. That compares with the latest figures of 9.5 percent in the euro region, 9.7 percent in the U.S. and 5.7 percent in Japan. "Can anybody explain me this correlation?PERSONAL COMMENT - THERE IS A SHAMELESS uk minister named Jim Knight . He said “Unemployment still remains a real problem for families up and down the country,” Employment minister Jim Knight said on BBC News. “We’ve got to keep the support going and not be tempted to celebrate the recovery.” Is he talking about the WorldWide ( baring Israel and Japan) support of fraudsters( heading as central bankers) TO the scamsters in banks and funds? It is a bubble it seems. OR , the CRYSTAL BALL through which the funds are seeing the rosy future is not accessible to us. Can someone explain ,please.Disclaimer - All the words used by me are my personal opinion.

Well the explanation is: unemployment is a lagging indicator and stock markets are a forward looking indicator. When you’re at the bottom of the cycle, the stock markets anticipate a recovery in the near future and so stocks go up. But unemployment will continue to rise until actual demand in the economy exceeds supply and there is a need to employ more people. If enough people believe in the recovery then perhaps they’ll all go out and spend, spend, spend and we’ll need to employ more people to produce these goods and services and reduce unemployment.

Unfortunately the spending may be curtailed for awhile.Same Question posed in Different Forum

QuoteOriginally posted by: cosmologistEQUITY INDICES all over the world have scaling newer highs while the unemployment rates are rising. To quote Bloomberg news,"The unemployment rate in the three months through July rose to 7.9 percent, the most since 1996, the statistics office(UK) said. That compares with the latest figures of 9.5 percent in the euro region, 9.7 percent in the U.S. and 5.7 percent in Japan. "Can anybody explain me this correlation?PERSONAL COMMENT - THERE IS A SHAMELESS uk minister named Jim Knight . He said “Unemployment still remains a real problem for families up and down the country,” Employment minister Jim Knight said on BBC News. “We’ve got to keep the support going and not be tempted to celebrate the recovery.” Is he talking about the WorldWide ( baring Israel and Japan) support of fraudsters( heading as central bankers) TO the scamsters in banks and funds? It is a bubble it seems. OR , the CRYSTAL BALL through which the funds are seeing the rosy future is not accessible to us. Can someone explain ,please.Disclaimer - All the words used by me are my personal opinion.An extreme event (black swan) or recession/depression fear leads to a cyclical bear market or a huge crash. Usually, the liquiity in the market dries up and it goes well below one could imagine before the crisis. Traders see a heck of selling pressure and discount the end of the world. If (and only if) we can recoup from the economic recession the market has to correct the large bump.When more liquidity starts to get into the market there's more demand for stocks and hence prices tend to go up. The market has to update its discount rate which is usually excessive in these periods.Also, short-selling play a huge role in market meltdowns and short-squeezes has its role in making the market go to fair value at faster pace than usual. All short-selling should be banned from the equity markets but they keep allowing it...(check the contrarian investment school, the value investing school, liquidity premium, bargain hunters, dip buyers, short selling bubbles, naked short selling, other short selling schemes or trading scams (pump and dump), derivatives, and the uptick rule, asymmetry in fear/greed). Essentially, when things go really bad you try to protect capital at all cost, otherwise you get hammered and will never make a comeback (unless you can benefit from a TARP)...................It's like playing the high-yield game in corporate bonds. If you buy a distressed asset it's value is in the tail of the distribution. If the asset makes a comeback you'll have huge returns in % by moving from the tail to the mean.When coming out of a recession managers will be extremely reluctant in hiring people again. They prefer to be safe first and have better visibility. Markets update information at a faster rate. Markets try to reprice risk before facts happen. When there's no risk of an event it's already priced in... When employment starts to peak up the risk of getting sucked in in a bear market rally is extremely lower than in the early stage of a rally, hence most gains have to be made by those who took the risk earlier. Consider it of a premium for the huge risk of capital that you take if you end up being sucked in in a bear market rally.