Has there ever been an economic MIRACLE or Boom, or even a pretty good time that was not accompanied by strong gains, or at least some sort of an up-trend in the stock market?
Wouldn’t you expect that if there were an actual economic MIRACLE following WW II, there would have been a big gain in the Dow Jones Industrial Average? Let’s have a look. (Image below.)
What we find is that the DJI rose over the year following VJ Day (Aug 15, 1945) from about 160 to around 212 in early-summer of 1946. Then, Henderson’s alleged miracle happened, and stocks fell back down to about 165 before the end of the year. The 212 level wasn’t reached again until spring of 1950.
Big DJI Deal!
While we’re at it, let’s have a look at how the market performed during the New Deal. As you can see in the same graph, from the 1932 daily closing low of 41.2, it rose to 194 in the Spring of 1937. That’s when FDR tried to balance the budget, and the wheels came off the still-recovering economy. The market never fully recovered from that blow until after the war was over.
Just for kicks, I put DJI performance from the 1932 low and the 1944 low on a percentage gain scale to see how they stack up. (Second Image)
X-axis is calendar days after the respective lows, running out for six years.
Speaks Volumes, doesn’t it. Even after the 1937-8 kick in the teeth, New Deal stock market performance was still far above what the first few post-war years were able to accomplish.
Dan, JS-Kit dumped me again and in the course of getting back my privileges I found that JzB’s 10:28 got blocked by the filter. Why? Got me. But I am glad I came by to test my account.
On a different topic. IMHO one our schools problems is the vast number of school districts. There should be at a maximum one district per county (one district in my county has 40 students). In metro areas one district per metro area per state. I am aware this is a third rail in state politics, some states have gotten better at it than others, but all should go this way. With metro wide schools, then the issues of rich and poor districts are reduced. Second provide a standard budget but few other rules to the principals who want to operate their schools as a charter school (but with lottery based enrollments no choice or selection allowed). You evaluate the principal on the waiting list or lack thereof. The principal can choose staff, and after a 1 year probation period fire staff. (This is more protection than folks in private business get)
Another swipe at Henderson.
Has there ever been an economic MIRACLE or Boom, or even a pretty good time that was not accompanied by strong gains, or at least some sort of an up-trend in the stock market?
Wouldn’t you expect that if there were an actual economic MIRACLE following WW II, there would have been a big gain in the Dow Jones Industrial Average? Let’s have a look. (Image below.)
What we find is that the DJI rose over the year following VJ Day (Aug 15, 1945) from about 160 to around 212 in early-summer of 1946. Then, Henderson’s alleged miracle happened, and stocks fell back down to about 165 before the end of the year. The 212 level wasn’t reached again until spring of 1950.
Big DJI Deal!
While we’re at it, let’s have a look at how the market performed during the New Deal. As you can see in the same graph, from the 1932 daily closing low of 41.2, it rose to 194 in the Spring of 1937. That’s when FDR tried to balance the budget, and the wheels came off the still-recovering economy. The market never fully recovered from that blow until after the war was over.
Just for kicks, I put DJI performance from the 1932 low and the 1944 low on a percentage gain scale to see how they stack up. (Second Image)
X-axis is calendar days after the respective lows, running out for six years.
Speaks Volumes, doesn’t it. Even after the 1937-8 kick in the teeth, New Deal stock market performance was still far above what the first few post-war years were able to accomplish.
Cross posted at my blog.
JzB
I can pop this up here??
Oh, yeah!
JzB
Dan, JS-Kit dumped me again and in the course of getting back my privileges I found that JzB’s 10:28 got blocked by the filter. Why? Got me. But I am glad I came by to test my account.
Bruce –
I deleted a comment that had a typo in it. that had to be the 10:28 entry.
Cheers!
JzB
Well spot the typo. The comment I unblocked was this one:
jazzbumpa (ip deleted-bcw)
Oh, yeah!
JzBYesterday, 10:28:12 AM PST
LOL…well, that clears up the query.
On a different topic. IMHO one our schools problems is the vast number of school districts. There should be at a maximum one district per county (one district in my county has 40 students). In metro areas one district per metro area per state. I am aware this is a third rail in state politics, some states have gotten better at it than others, but all should go this way. With metro wide schools, then the issues of rich and poor districts are reduced.
Second provide a standard budget but few other rules to the principals who want to operate their schools as a charter school (but with lottery based enrollments no choice or selection allowed). You evaluate the principal on the waiting list or lack thereof. The principal can choose staff, and after a 1 year probation period fire staff.
(This is more protection than folks in private business get)
I thought it said “Of, yeah.” Which I why I deleted and reposted.
So, I thought I made a mistake, but I was wrong.
Hmmmmm.
JzB