Compliments of Steve Jon Kaplan :
Membership prices on U.S. exchanges continued to decline in recent weeks. This shows what traders are actually willing to pay to be allowed to be market makers on the floor, and is generally a useful leading indicator of stock prices. The current bid/ask price for a seat on the New York Stock Exchange is 1,330,000 bid, 1,775,000 asked (last 1,600,000), compared with the all-time high sale of two million dollars on March 9, 1998. The Amex shows 355,000 bid, 450,000 asked (last 400,000), versus the record high of 480,000 on February 13, 1998. The COMEX (primarily precious metals trading) shows a spread of 78,000 bid, 90,000 asked (last 85,000) versus its record high of 350,000 on July 6, 1995.
Corporate profits of U.S. companies have sharply declined in 1998, but the economy is not slowing. Last month's new home sales totaled 888 thousand units annualized, the highest ever.
The divergence between the performance of the major market indices and the broader market has not been this pronounced since just before the bear market of 1973-1974, the worst in postwar U.S. history. |
