Regards, Ivan
Posted on 12/31/2002 9:31:39 AM PST by MadIvan
World stock markets have racked up a third consecutive year of losses, making the current share price slump one of the longest on record.
The decline reflects sluggish economic growth, weak corporate profits, a spate of accounting scandals in the US, and fears over war in Iraq.
With no obvious trigger for a recovery in sight, the slump is now drawing comparisons with previous traumatic share price collapses such as the 1929 crash or the financial meltdown that followed the oil price shock of 1973-74.
On Wall Street, the Dow Jones index of blue-chip US shares - which sets the tone for stock markets world wide - is on track to finish the year about 17% lower, while London's FTSE 100 settled down 24% on Tuesday.
Europe's woes
Over on mainland Europe, investors have had an even more torrid time of it.
On Monday, Germany's benchmark Dax index finished the year a massive 44% lower, making it the worst performing major stock index of 2002.
In France, returns on shares were only slightly better, with the Cac heading for a loss of about 33% compared with the start of the year.
There has been no respite either for investors in Japan, where the Nikkei index settled 19% lower on the year on Monday, posting its weakest year-end close since 1982.
But the full extent of the share price rout is best illustrated by looking at the major markets' performance since they reached their peak valuations at the tail-end of the late 1990s technology boom.
The FTSE 100 is now down 43% from its all-time high of about 6,900, which it reached on New Year's eve 1999.
The Dow, meanwhile, has fallen 28% from its January 2000 peak of 11,700, notching up its first three-year losing streak since 1939-41.
Turning around?
According to stock market historian David Schwartz, the decline is approaching in severity the kind of collapse usually associated with "catastrophic" events such as a serious military setback during wartime.
However, historical analysis suggests that a recovery may be waiting in the wings, he believes.
"We are at the deep end of a normal bear market. But history teaches us that we may be at or near the bottom," Mr Schwartz told BBC News Online.
One factor which may lift stocks next year is the 2004 US Presidential election, which is likely to boost investor sentiment as candidates start pledging better times to come.
"Over the last half century, every time there has been a US Presidential election, UK stocks have risen the year before," Mr Schwartz said.
Emerging hope
And while investors in the major global stock markets are unlikely to have made much money this year, stocks in emerging market economies have decisively bucked the gloomy trend.
In Pakistan, the top 100 shares on the Karachi Stock Exchange have soared by more than 100% since the start of the year, making it the world's best performing stock market by far.
Elsewhere in Asia, double digit annual gains were recorded on the Sri Lankan and Thai leading share indexes, while stocks also rose, albeit more moderately, in Indonesia and India.
And in crisis-torn Argentina, the Merval share index finished the year 62% higher than it began, lifted by signs of an economic recovery and hopes of a new financing deal with the International Monetary Fund.
Regards, Ivan
Piffle. We've had good economic times even while that conflict has raged. The 1980's, for example. If the resolution you describe involves Israel shooting Arafat and Hamas, then I'm all for it out of general principles, not because it will bring prosperity.
What needs to occur is a seismic shift in investor psychology. My greatest hope is that President Bush will do something dramatic like eliminate the Income Tax and replace it with a National Sales Tax. The elimination of the IRS alone will make people love him forever.
Ivan
Usually this happens as the government pumps money into the market but we are addding at a 20% rate M-3 money now & it is only proping up a sinking ship. We must have our war in order to obtain cheap oil. W/o it a financial meltdown is assured. If it were otherwise (our safty) we would have the borders closed. And watch out for a terrorist act because the sheeple have caught on to the scam.
FYI, you're at Free Republic, not Democrat (hopefully 6 feet) Underground.
Ivan
I can imagine President Bush addressing the nation with a copy of the Income Tax code - all thousands of pages of it - and then saying, "I am going to do something which will bring substantial improvement to our economy, and eliminate a drain on our resources as an innovative people" - then casting the document into the rubbish bin.
I'd be tempted to soak it in lighter fluid and strike a match too, but that's just me.
Regards, Ivan
Regards, Ivan
You guys must be riot to live with.
Not.
The nomadic tribes of the Middle East have been cutting each others' throats since the dawn of recorded history.
Don't be deluded into thinking that a feud that's existed for millenia is going to be magicly resolved in our lifetime. I'd much prefer to see a peaceful resolution to the conflict myself, but consider it more practical to remain neutral while providing humanitarian assistance to those innocent victims of stone-age barbarism.
Note: this does NOT preclude punitive action taken against those fanatics who direct their insanity against us. However, we should also be taking more deliberate steps to minimize our economic involvement and dependence on the region.
Hate to dash your hopes. He would first have to be in favor of it and propose it.
Last year at this time, Repukie economists taking their cue from little Dumbya were predicting 12,500 for the DJIA. Now, they blame Clinton and 9/11 for the Bush Recession and resulting fall of the DJIA.
With Dumbya in charge investment in cash at 1.25% has been a successful strategy. Pity the value of your portfolio if your wishes are granted and your MIA war hero and his Repukie syncophants continue their failed borrow-and-spend policies in 2003.
Happy New Year, Ivan!
Hey Sinks. That's because we are throwing out all the cool aid. I hope your glass is still full but include a New Year resolution to swear off this drink. Three years of down should be evidence of melting.
I'm melting, melting, melting ...........
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