Hey, its 1997!

Here are a few notable things that happened this year:

Hong Kong returns to Chinese rule;
O. J. Simpson found liable in civil suit;
Nobel Prize for Economics is won by Long Term Capital Management stars Robert Merton and Myron Scholes.
Titanic hits theaters — along with The Full Monty, Good Will Hunting, and L.A. Confidential;
Ellen DeGeneres outs herself;
Skynet launches nuclear attack on mankind;
Eric Clapton wins a Grammy for Change the World
J. K. Rowling’s first Harry Potter is published in the U.K.
Princess Diana, Jacques Cousteau, John Denver, Mother Theresa, and James Stewart all die.

Oh, and the Dow Jones Industrials hit 7,100.

~~~

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

43 Responses to “Dow 7,100”

  1. and in 1996, AG made his famous observation that the markets seemed stricken with “irrational exuberance”. Gaod call, Al. Like a bad pusher, you didn’t know how good your dope was until you saw the carcasses of your OD’ed customers littering the alley.

  2. the economic fractalist says:

    Saturation Macroeconomics?

    Does saturation macroeconomics deserve recognition as an operative science?

    From the final posting:

    …. These are the lumped six broad elements that are dynamically
    interacting with each other to create the summation valuation points,
    curves, and saturation asymptotes. The evolving integrative fractals
    that appear to so well describe the real instantaneous state, the
    trending state, the saturation areas, and importantly predict with relative exactness the expected nonlinearities of the complex macro economic system, have the fundamental characteristics of a real science.

  3. Pat G. says:

    In 1997 we were all a dozen years younger.

  4. Steve Barry says:

    There is no doubt anymore…the bottom is not in until Larry breaks down on the air and swears off stocks.

  5. gordo365 says:

    Why does it feel like I was 20 years younger in 1997?

  6. How do ya like dem apples ???

  7. If in 1997, I boughtgoods or services for $1.00 then in 2009, the same goods or services would cost $1.36
    http://www.minneapolisfed.org/index.cfm

    also, don’t miss:
    Interview with Harvard economist about financial globalization, risks to central bank independence and the history of financial crises.
    http://www.minneapolisfed.org/publications_papers/issue.cfm?id=290

    Hartford? Pro-FinGlobal? whowoodathunk?

  8. In 1997 I won a Maine Press Association Award for covering the collapse of the last vestige of Augusta, Maine’s mill manufacturing economy: the Statler Tissue Mill. 800 people lost their jobs.

    Good times.

  9. Broken says:

    Any takers for a small rally tomorrow on our way to the 600s?

  10. scorpio says:

    hey 1997, wake me when it’s Jan 1995, the year we lifted off. spent Clinton’s first two years around SPY 450, which i think we’ll see again soon. after Greenie destroyed the Dems in 11/94 by doubling rates in Spring ’95 and causing worst annual UST bond loss since Depression, the right-wing takeover and government shutdown and subsequent Clinton/Rubin/Summers capitulation to laissez-faire sent us into orbit. done that. now we see how it works on the down-side.

  11. Transor Z says:

    This might be the solution: a spam-based economy like in koy4goff. From the “Onion”:

    http://www.theonion.com/content/video/majority_of_world_s_spam_email?utm_source=onion_rss_daily

  12. franklin411 says:

    Tuition for California college students was 200% lower, and my health insurance premium was 250% lower.

  13. km4 says:

    What does China and AIG have in common? A lot as it turns out.

    Coverage of the 85 billion-dollar AIG bailout by the Fed in the Chinese media has generally been fairly reserved. That’s partly because AIG owns around twenty per cent of the People’s Insurance Company of China, the country’s largest casualty insurer, and the government doesn’t want anyone getting worked up about a possible threat to its soundness or that of their policies. AIG also has a special, indeed unique, history in China. It is the only major U.S. company (eighth largest in the world until a few days ago) that was founded here.

    Interesting, but no big deal. Right? Well let’s adjust our tinfoil hats for a moment and check out recent news.

    “The truth is the Administration needs China’s help. America’s stimulus is very expensive and the U.S. wants China to help finance it,” Andrews reported.

    Or to put it another way.
    If you want tinfoil, consider this
    http://www.dailykos.com/comments/2009/2/23/153939/985/368#c368

    The son of one of the biggest CIA spymasters ever, whose career puts him (the son) in government in a way that could put him at least in major contact with his father’s old company… and now AIG, with its links to China and the destabilization of the economy, spending billions… how?

    All I’m saying, if you wanted to conduct Naomi Klein-style “shock therapy” on a nation, these are the kinds of guys who might be in charge. I’m not saying they are, but I think these kinds of ties are worth investigating more.

    add on to this post from previous thread

    In Beijing, she [Clinton] urged China – - the largest holder of U.S. government debt — to keep buying to help finance Obama’s plan to revive growth, saying “we are truly going to rise or fall together.”

    Is it really too much to suggest that the decisions to bail out AIG might be influenced by our dependence on the willingness or China to fund America’s bailouts? And visa versa?

    Or to put it another way: We are bailing out AIG because of their connections to China, who we need to fund our domestic bailouts, in which we are throwing money at AIG, all of which is backstopped by the American taxpayer.

    For more see http://www.dailykos.com/story/2009/2/23/153939/985/832/700892

  14. rktbrkr says:

    will we party like it’s 1999 two years from now?

  15. In 1997 nobody thought we’d have a black president in 2009.

  16. “FTW has also conducted an extensive investigation into AIG and its predecessors, revealing deep connections to US intelligence dating back to the Office of Strategic Services (OSS) in World War II. These connections include documented CIA operatives connected to drug smuggling from Southeast Asia and a current board member …”
    http://digg.com/politics/AIG_CIA_Drug_Running_Exposed_in_2001
    http://www.icerocket.com/search?tab=web&fr=h&q=AIG+CIA

    km4,

    I’d be saving the ‘tinfoil’ for other purposes, like lining the oven rack beneath the one that your Yams are on..

    We should have through enough, by now, to understand that ‘History’ books are written from a singular viewpoint, and, hopefully, enough to realize that that History is multi-faceted..

  17. CNBC Sucks says:

    Ritholtz the Republican, I need to correct my earlier statement today. Our party’s witch hunt of Bill Clinton did not start until 1998. I know our party frowns on accuracy of information, but since the next election is not for another two years, I figured my self-correction couldn’t hurt.

    What’s the deal with this Obama black guy talking about putting politics aside and taking care of the American people? Is this clown from outer space? We’re Republicans! And what’s with these Democrats talking about the Bush tax cuts not having worked to fix the economy? The Bush tax cuts were NEVER intended to fix the economy. (Is Art still alive?) They were intended to transfer wealth from the poor and future generations to the wealthy. Of course, they worked.

    Are you joining me and Gasparino at the tractor pull and book burning hoe-down in Hoboken this weekend?

  18. super_trooper says:

    @franklin411 “Tuition for California college students was 200% lower, and my health insurance premium was 250% lower.”

    You’ve invented a new form of math, or just qualified for a $1 M bonus on Wall street. In my world prices can NOT decline more than 100%.

  19. Paul Jones says:

    I look back on those times as utopic.

  20. usphoenix says:

    I am completely and totally fascinated by some of the shared notions.

    AIG and China. Duh. I knew China had been a major insurance player for centuries. One of the long-term LLoyds of London members.

    So I don’t guess it’s much about how stupid China is. Because they are not.

    The choice comes down to whether American voters are smart enough to realize how ****** our democracy is to elect people more interested in representing China’s interests than ours. In the name of keeping our consumption flowing.

  21. Bruce in Tn says:

    I choose to make my own investing decisions…so should you…still my soapbox point…

    BRKA June 98…78000

    today 75600….

    The world “greatest” investor down from 147000 to 75600..

    Warren of course is fine…but people who just said, “he’s the man”…they are 1/2 as well off and poorer than June 98..

    It doesn’t scare me what is ahead, and it shouldn’t scare you….

  22. E says:

    Speaking of China and markets, the Hang Seng is down 3% in the first 10 minutes of trading.

  23. call me ahab says:

    @franklin411

    dude- I say free tuition and health care- I mean we are people right? What do I care if it increases taxes- who cares! Look at the incredibly smart and healthy people we will have and all the interesting scholarly discourse and just plain healthy lifestyles we will all be enjoying. I figure I can get a job doing basically anything because all the heavy expenses will be covered. I guess I’ll need food stamps too though. Oh, section 8 too. Shit, this just gets better and better.

  24. super_trooper says:

    I recall Nouriel mentioning a few months ago that DOW 6000 was a reasonable target. Wonder what his new target is?
    How about another poll, how low will a. Dow and b. S&P go?

  25. John from Concord says:

    Does this mean that Scholes and Merton have to give the prizes back?

    Please?

  26. Bruce in Tn says:

    In 1997 the Nikkei was 22,000…tonight 7100…the export thingy didn’t work out either…

  27. Steve Barry says:

    @super_trooper:

    My year-end target for Dow, made in December, was 6100…I guess i’ll stick to it, but I think we visit 5000 first.

  28. sst3d says:

    …..and in 1997 I still had a full head of hair….

    scott in chicago

  29. Jojo99 says:

    Ah, if I knew what I know now in 1997, sigh….

  30. AGG says:

    Barry,
    Minor detail, I know, but this happened in 1997 too:
    On 17 March 1997, Hewlett-Packard, Johnson & Johnson, Travelers Group, and Wal-Mart joined the average, replacing Bethlehem Steel, Texaco, Westinghouse Electric and Woolworth.

    And by the way, they’re doing it again in 2009. Goodbye financial stocks in the dow.

  31. In 1997 blank, recordable CDs cost about $10 apiece and the encoders were over ten grand.

  32. Steve Barry says:

    In 1997, I owned 3200 shares of Sun Micro it went to 128…I sold it at 13 in 2001, still for a profit I might add.

  33. In 1997 DVDs did not exist.

  34. mcrcr4 says:

    “….I wish to God I didn’t know now,
    The things I didn’t know then.”

    Poison, “Something To Believe In”, from somewhere around that time, I think. My memory ain’t what it once was.

    We all need something to believe in, just be careful what it is.

    Best regards,
    RF

  35. Marcus Aurelius says:

    Top 10 hits of 1997:

    1. Candle In The Wind 1997, Elton John
    2. Foolish Games / You Were Meant For Me, Jewel
    3. I’ll Be Missing You, Puff Daddy and Faith Evans
    4. Un-Break My Heart, Toni Braxton
    5. Can’t Nobody Hold Me Down, Puff Daddy
    6. I Believe I Can Fly, R. Kelly
    7. Don’t Let Go (Love), En Vogue
    8. Return Of The Mack, Mark Morrison
    9. How Do I Live, LeAnn Rimes
    10. Wannabe, Spice Girls

  36. Simon says:

    Last time we looked over the edge the market did not even pause to make its way directly to the most obvious target. The 2001 lows. This time, me thinks, there will be a variation on the theme i.e. the odds are lower that the same thing will happen also there is no longer an obvious target down there.

  37. the more interesting question is, should oil prices tag along down to mid 90′s prices (mid teens-low 20′s?)

    i know i know….. CHIIIIIINNNNAAAAA

    whatever

    blechhh

    TRB

  38. gregh says:

    As a fresh collegiate graduate in ’97 I began contributing to my 401K and IRA

  39. On the flip side gold was $250 and people were mocking gold bugs that gold never gave you a return on your investment.

    I was a gold bug back then. I am more just a gold fan now. One thing we always heard about was the bottom indicator dow/gold ratio which is supposed to hit 1:1. When gold is sitting at $250 and the dow is in the 1xxxx area it does sound absurd and impossible. Even to a gold bug. I no longer believe it is impossible now that the ratio is closer to 7:1 and we haven’t even begun to panic yet

    @Douglas Watts Says: February 23rd, 2009 at 8:49 pm

    In 1997 nobody thought we’d have a black president in 2009.

    No, but no one was ruling out the possibility of a female one. She ended up being Secretary of State instead

    @Bruce in Tn Says: February 23rd, 2009 at 9:09 pm

    The world “greatest” investor down from 147000 to 75600..

    I guess Mr. Buynhold is proving that sometimes it can be better to be a trader. If he’d sold half at the top he would own almost twice as many shares by buying back in today(not including taxes of course which is his reason for holding)

    ….and Diana’s death was ten years ago huh? I won’t go so far as to say that changed me but my life took a definite turn when that happened

  40. CPJ13 says:

    Right out of the TA textbooks, check out a 20 year weekly chart of the SPX. Think we’ll make it all the way back to 450? Uuuuugly.

  41. Also, back then fair market value for gold was said to be $600. Now the number is pegged anywhere between $2500 and $5000

  42. In 1997 the Boston Red Sox looked as far from a World Series victory as they had since they sold Babe Ruth to the Yankees.

  43. May 11, 1997

    Deep Blue beats Kasparov
    IBM’s supercomputer Deep Blue makes chess history by defeating Gary Kasparov, the chess champion widely regarded as the greatest who has ever lived. The Russian master conceded defeat after 19 moves in the sixth game of the tournament, losing the match 2.5 to 3.5. It was the first defeat of a reigning world champion by a machine in tournament play…

    http://www.history.com/this-day-in-history.do?action=Article&id=4993
    http://www.icerocket.com/search?tab=web&fr=h&q=big+blue+beats+kasparov

    controversy aside, a big splash in the AI pool, if not in other ponds..