It is useful for the newbies on this thread to think about what a friend of mine told me about 73-74.
I do, too. I'll have to think about your '69-70 parallel, which was basically the collapse of the "Nifty Fifty" and the conglomerates (Jimmy Ling, the Merger King, et. al.), but we were so busy with fiscal stimulus chasing wily Uncle Ho's boys then, I'd prefer the '73-74 experience which was basically the hangover from that fiscal stimulus compounded by huge oil price increases.
I was in Michigan auto country during that time (East Lansing, next to Lansing, home of the soon to be a memory Oldmobile division) and it was pretty damn grim. With every profit shortfall and lay-off announcement, and increase in the national debt, the market just got worse, and worse, and worse. Then one day, while no one was really watching, it stopped getting worse. As we know, it took several years to make it back, but there were pretty respectable percentage gains from the lows.
We are in the grinder, not a V, and all the folks looking for panic capitulation are looking too soon and in the wring places.
Having said that, I do not think the U.S. economy will suffer on the same scale as we did in '73-74 nor on the same scale as the Asian economies. That's a whole 'nother discussion in and of itself. Suspect that come 14 months from now we will be looking at pleasing Y-to-Y earnings comparisons. |
