RIP Big Bull Market (1982-2022)
From start to finish, the Dow rose from 776.91 to 36800, a 9.6% annual rate.
The bull market started 40 years ago this week.
On Aug. 12, 1982, the Dow Jones Industrial Average bottomed at 776.91
Andy Kessler WSJ 7 August 2022
The Day the Markets Roared August 17 1982 Henry Kaufman
“We have a long way to go. Inflation has to come down or interest rates will go higher.”
Interest rates had already started falling before Kaufman issued his celebrated 1982 forecast, but it was his prediction of a sustained decline that moved the markets.
His impact stemmed from his status as the late-20th century equivalent of a social media influencer.
Dow rose to 831.24.
The 1980s bull market followed and — with several notable interruptions — stocks have climbed higher in the decades since. The Dow closed on Tuesday at 34,152.01.
FT 17 August 2022
https://www.ft.com/content/47d407c1-2353-4068-90a7-27a9f901f051
Henry Kaufman: Money matters but credit counts 2007
Dr Doom is back. Henry Kaufman, the legendary chief economist for Salomon Brothers in the 1970s and 1980s, earned his nickname for gloomy (and usually correct) forecasts of higher inflation and interest rates. He turns 80 this year, and gave a speech in Wall Street on Tuesday night.
The problem lies in the changing definition of liquidity. After the war, liquidity was an “asset- based concept” – companies’ cash on hand and so on. Now, Kaufman said, “firms and households alike often blur the distinction between liquidity and credit availability. Money matters but credit counts”.
Securitisation and improved technology, he said, stimulated risk appetites, “fostering the attitude that credit usually is available at reasonable prices”.
John Authers, FT Investment Editor, March 15 2007
In 1982, he /Volcker/ began slashing rates even though inflation was still in high single digits.
He feared high rates were destabilizing the world-financial system. Throughout 1982 he became increasingly worried Mexico would default, imperiling the dozens of big U.S. banks that had lent to it.
Dow’s bear market low of 777 points in August 1982.
- In the United States, the return to demand management began as early as the summer of 1982, when a three-year recession and the bankruptcy of the Mexican government persuaded the Fed that its experiment with monetarism had gone too far.
https://englundmacro.blogspot.com/2022/05/volcker-if-i-had-known-what-was-going.html
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