To See a World in a Grain of Sand...

Bonus points if anyone can identify the movie and the origin of the title. Give up? Okay, the movie was Lara Croft: Tomb Raider starring a one (at the time) healthy looking Angelina Jolie. The actual origin of this poem though is William Blake, notorious for his role as a "seminal figure" in Romanticist (some argue pre-romanticist) literature.

Any way. Coming back to my point (I know, it was roundabout, but I'm glad that you've gone on this journey with me. I feel as though we are closer somehow. More secure in our relationship. It feels good.)

So there is this new thing. All the cool kids are doing it. It's called the Proust Index. And what is does is it measures how far back the recession has put us in terms of progress. So.. the good news is that the U.S. is only approximately 10-11 years. The worst hit was Greece, who is estimated to have been set back approximately 12 years with the financial crisis. How do they know this? Excellent question my dear Watson.

So, cobbling together a bunch of metrics, they've developed three broad categories. These include things like household wealth, financial asset prices and property prices (group 1), measures of annual output and private consumption (group 2) and real wages and unemployment (group 3). Together, these are averaged to develop a quantitative number that would indicate exactly how far behind we've gone.

In terms of historical perspective, we're actually ahead of the game. In comparison to the crash of 1929, and Japan's 1989 bust, values of equities were only 50% of their value in real comparitive terms to where we are today, whereas currently we estimate that the main indices (S&P 500) are around 90% of their peak value again (in the late 90s). However, keep in mind that it took 25 years for American stocks to regain their highs after 1929 and Japanese stocks never made it back to their peak.

Unsurprisingly, in this index, only Germany has not gone backwards out of the group that we like to call the G7. Shocker. At least we have a quantitative way to measure how badly we've performed?