Check out the stock market rally during the Great Depression. The people posting this chart are more concerned about how much further the current stock market rally will go. I’m more interested in the fact that there was a 300% stock rally in less than four years during the midst of the Great Depression. Did this stock rally alleviate the suffering of millions? NO. Did the stock market rally boost the economy? NO. Did the stock market rally benefit the bankers and the ultra-rich? YOU BET YOUR ASS IT DID.
The MSM and your government leaders want you to believe this current stock market rally is benefitting the economy, your lives, and our society as a whole. This storyline is complete and utter bullshit. The average person is not benefitting from this stock market rally as the bottom 80% only own 5% of the stocks in this country. We are in the midst of a 2nd Great Depression. The history books will say it’s so. Meanwhile, who is benefitting from this stock market rally and where will it lead? You know what happened last time. History does rhyme.
Today’s chart illustrates rallies that followed massive bear markets. For today’s chart, a ‘massive’ bear market is defined as a decline of greater than 50%. Since the Dow’s inception in 1896, there have been only three bear markets whereby the Dow declined more than 50% (early 1930s, late 1930s until early 1940s, and during the recent financial crisis). Today’s chart also adds the rally that followed the dot-com bust during which the Nasdaq declined 78%. The current Dow rally has followed the post dot-com bust rally of the Nasdaq that began back in 2002 fairly closely and held to a general post-massive bear market rally pattern — rally during the first 300 trading days, trade in a relatively flat choppy manner up until around 600 trading days and then re-embark on the second leg of the rally. History may not repeat, but it rhymes.