Here is a chart of the S&P 500 for the final 15-years (1980-1994) of America’s sordid, protectionist past. NAFTA went into effect on January 1, 1995. Click chart to enlarge:
The S&P 500 went up four-fold during that dark era. I shudder to think of how we selfish Americans hogged all of that economic growth to ourselves. Isn’t it time that we made a formal apology to the world? You know, like apologizing for slavery, or dropping H-bombs.
On this Thanksgiving Day, make sure to say a little prayer for all the great Republican, Democratic, and Libertarian advocates of “free trade” who are valiantly protecting us from suffering a relapse into the horrors of protectionism.
Here is the “Free Trade Era” chart of the S&P 500:
Isn’t that better? A nice egalitarian, sideways chart that proudly proclaims America’s economic sacrifice on behalf of the global economy. It’s a beautiful thing, is it not?
(Note: The second chart does run up nicely for the first five years. But the task of exporting millions of jobs doesn’t just happen overnight, right? A lot of infrastructure had to be built up in Mexico and Asia before our manufacturing base could be relocated. But we got it done in record time. The USA is can-do nation.)
I was always skeptical of the “avoid protectionism” argument. Greenspan could pull it off but to hear Bush proclaim the mantra with the acquired Texas drawl was just weird.
K, after watching 3 month T bills go negative last week – here’s how the Libor side of the TED Spread ratio can rise:
Nov. 25 (Bloomberg) — European Central Bank officials are debating whether to put an adjustable interest rate on December’s 12-month loans, with some saying it risks being interpreted as a signal they will tighten monetary policy in 2010, according to people familiar with the discussions. . .
I already said that tomorrow starts the new market (down)
“somewhere in the world candles will be blown” is what i said a few days ago.
keep it in mind.
K, I didn’t mean to imply Ted would widen soon or that the broad market would suffer much after the initial shock of tightening when it occurs in America or Europe.
The Libor side of the equation is lower due to Trichet and the ECB giving unlimited payola. Ted’s move last week was US T bills not Libor. My guess is Libor moves up over the next few months.
Btw, does anyone know how WestLB got in trouble?
Mitch,
I didn’t take it as that either.
No more natzi soup beginning tomorrow? The big funds and money managers will take their turkey profits and run. Some will hold out for a Santa rally, others will lick their wounds.
SPY isn’t the end-all SPDR. But since it is the one I mainly trade, along with its siblings, I keep checking the longer-term to see what’s up.
K, here’s your crossroad – the weekly SPY:
http://www.freestockcharts.com?emailChartID=0a4e02f9-d34a-4a3f-b9db-925384013e01
thanksgiving sales started way before blackfriday…………. nuts!! retailers are really desperate.!
K, speaking of retail. Why was the Zune snapped up on launch? The only difference from an iPod I saw was the 720p hdmi for docking to big TVs.
snapped? care to explain? im not a zune or ipod fan. i try to be different (that explains why am always fighting the trend)
K, sure, retail stores sold out quickly after the sales launch. I found it a little surprising since iPod seemed to be holding the field. Stalking horses are fun to identify. Nite.
Well, dark horse may be better.
The new Zune is HD. It has HD radio and wi-fi for downloads and surfing. Also, a $15 per month subscription gives all of the music one wants to listen to and download where as Apple requires all songs to be purchased.
I’d prefer it over the iTouch because you get more bang for the buck. Did I mention it’s easy to hack?