2009 Rally vs. 1982 Bull Market

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The very useful comparison of the current US stock market rally with that of 1982 is provided in the table below, courtesy of Barry Ritholtz, writer of The Big Picture blog.

It is when looking at the characteristics of a typical market bottom that one has difficulty seeing that the March ’09 lows were in fact a primary bull market turning point. “Maybe this time it really is different, I guess we’re going to find out,” said Richard Russell (Dow Theory Letters).

tabel-s

Source: Barry Ritholtz, The Big Picture, November 18, 2009.

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1 comment to 2009 Rally vs. 1982 Bull Market

  • John W. Green

    Comparing the current recession with the 1981-82 recession is like comparing apples and oranges. The 81-82 recession was a supply-side recession; the U.S. was in the process of digesting a 10-year increase in primary energy prices exceeding 10X. U.S. industry restructuring away from expansive energy by becoming more efficient and moving off-shore.

    The current recession is a demand-side recession: the housing piggy bank has been removed, financial excesses have taken away easy loans and consumers and producers have quit spending.

    The policies to be used to alleviate the recession are much different. The current recession is more like the Great Depression and Keynesian solutions are appropriate while Reaganomics supply-side solutions are not.

    Likewise, we would expect stock market parameters to be different and the recovery to take place along a different path.

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