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1974 vs. 2024 Stock Market… crash?!?
story behind the 10-day losing streak
Did you know that after stocks lost 43% of their value in real terms in 1974, they didn’t regain that loss until Aug. 1993 — 19 years later!
News:
Down Jones Industrial Average plummeted by 1,100 Points on Wed., Dec. 18, 2024. And news media are emphasizing and cautioning that this is the 1st 10-day losing streak since 1974.
So, aside from the fact that 1974 was half a century ago, is there anything else that we should know about 1974 (I gave you a hint above)?
History Behind News:
Between 1973 and 1974 (from 1/11/73 to 12/6/74 — 694 days), the Dow Jones experienced the 7th-worst bear market in its history. The funny thing is that 1972 had been a very good year for stocks, as DJIA had gained 15%.
Other than the financial crisis of 2007–08, the 1973–74 crash was the worst in US history since the Great Depression.
So, what contributed to it?
- collapse of the Bretton Woods (monetary management system),
- The Nixon Shock — wage and price control, import surcharges, and U.S. cancellation of US dollar to gold direct convertibility, and
