US Stock Market 2-26-24

The US Stock Market is one metric we can use to understand the down periods in US economy as we try to understand the causes of these contractions. 

The Dow Jones average shows the value of stocks in the largest 30 companies over the last 100 years.

The US stock market history since 1920 shows the retractions in the US economy in 1929, 1941, 1982, and 2008. These retractions were caused by bad news and bad moves and created bad economies.

The Dow plunged from 6780.52 in 1929 to 1969.49 in 1931. This was the Great Depression.

The Dow plunged from 4062.88 in 1941 to 1918.54 in 1942. This was the attack on Pearl Harbor.

The Dow plunged from 94485 in 1965 to 2685.62 in 1982. This was Vietnam and the War on Poverty.

The Dow plunged 20560.69 in 2007 to 10032.93 in 2009. This was the Mortgage Meltdown.

https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart#google_vignette

The 500 index plunged from 565.33 in 1929 to 171.53 in 1932.

The 500 index plunged from 314.69 in 1942 to 195 in 1946

The 500 index plunged from 899.15 in 1965 to 368.74 in 1982   

The 500 index plunged from 2700.44 in 2008 1156.91 in 2009

https://www.macrotrends.net/2324/sp-500-historical-chart-data

The Great Depression began with the US Stock Market Crash in 1929, but continued with the Dust Bowl drought in the 1930s. Unemployment reached 24.7% in 1933. It took war production to restore US unemployment in 1942.

World War II restored the US economy until the 1960s. US manufacturing soared in the 1950s and 1960s.

Vietnam, the War on Poverty and the introduction to Medicare and Medicaid resulted in excessive federal government spending in 1965. This always results in inflation.

The Mortgage Meltdown in 2008 to 2009 caused the Great Recession from 2009 to 2016. Banks were under pressure to grant mortgage loans to unqualified buyers. When these loans defaulted, they were sliced up and sold as securities to investors. The US Congress bailed out the Banks. The Federal Reserve issued liquidity by printing money and set the interest rate at zero. This always results in inflation.

We had a good economy for 10 years from 1920 to 1930.

We had a bad economy for 10 years from 1930 to 1940.

We had a good economy for 50 years from 1940 to 1990.

After 1990 we gutted our manufacturing by off-shoring and allowed a 90% increase in the National Debt. 

In 1990 the US National Debt was $3.233 trillion. In 2024 the US National Debt is $35 trillion.

Norb Leahy, Dunwoody GA Tea Party Leader