Comments on: 2009 Rally vs. 1982 Bull Market http://www.investmentpostcards.com/2009/11/19/2009-rally-vs-1982-bull-market/ Prieur du Plessis’s international investment blog Sun, 29 Jan 2012 22:06:48 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: John W. Greenhttp://www.investmentpostcards.com/2009/11/19/2009-rally-vs-1982-bull-market/comment-page-1/#comment-20226 John W. Green Thu, 19 Nov 2009 17:04:58 +0000 http://www.investmentpostcards.com/?p=13896#comment-20226 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. 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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