The Ultimate History-Of-Markets Chartbook

Tyler Durden's picture

Whether gold-bug, permabull, or deflationst; BofAML provides a little something for everyone in the most complete picture guide to 'financial markets since 1800'. A collection of almost 100 charts on asset price returns, correlations, volatility, valuations and many other market and macro factors for the US, UK, Europe, Japan, and Emerging Markets.

“History does not repeat itself but it does rhyme.”
-Mark Twain

The Long-run in numbers:

  • 1.45%: the yield of US 10 year Treasuries on June 1, 2012; a 220-year low
  • 1958: the last time US AAA corporate bond yields were as low as they are today
  • 1517: Dutch government bond yields currently at lowest level in almost 500 years
  • 320bps: the current spread between European dividend yields and German bund yields, an all-time high
  • 63x: the amount EM equities are up since the late 1960s
  • $1900/oz: record high gold price reached in September 2011
  • 43%: the drop in US real home prices since the 2006 peak, making the current US real estate bear market the greatest since 1921
  • 8%: Japan’s share of global equity market cap; close to an all-time low and down from 44% in 1988
  • $3,642,000: What $1 invested in US large company stocks in 1824 would be worth today with dividends reinvested
  • 1 out of 2: the number of years since 1871 that the S&P 500 has had a negative real price return
  • 44%: the share of US Treasuries owned by foreigners; up from just 1% in 1945
  • 280mn: the number of people India’s working age population will grow by over the next 25 years; this is more than the current working age population in the US and Germany combined

The Long-run in years:

  • 1602: the Dutch East India Company becomes the first company to issue stocks and bonds
    on the Amsterdam Stock Exchange
  • 1685: Germany establishes the second stock exchange in the world
  • 1790: an $80 million U.S. Government bond offering to refinance Revolutionary War debt
    becomes the first publicly traded security in the US
  • 1792: the NYSE is organized and the Bank of New York becomes the first company listed
  • 1810: Russia is the first “emerging market” country to establish a stock market
  • 1879: US stocks record their best year ever, returning 57%
  • 1891: the first US equity bear market (>20% loss) is caused by the “Baring Brothers Crisis”
  • 1918: US Inflation hits an all-time high of 20.4%
  • 1931: US stocks record their worst year ever, declining 43%
  • 1932: the most volatile year ever for US stocks as volatility hits 68%
  • 1981: monthly US 10 year Treasury yields hit an all-time high of 15.8%
  • 1982: the best year of total return for long-term Treasuries of 40%
  • 1987: on “Black Monday,” October 19th, the Dow falls 23%, the largest daily drop ever
  • 2009: the worst year for long-term Treasury returns with losses of 15%
  • 2012: a year marked by multi-century lows in many DM government bond yields (including
    the Netherlands, France, US)

For your Independence Day enjoyment:

BofAML The Longest Picture

You're welcome...

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Coke and Hookers's picture


Dr Benway's picture

Look this is my favourite pet peeve.


The stockmarket in 1800 is not the same as ours.


Depending on what stocks comprise it, stockmarkets in different times are so different as to be incomparable and separate asset classes.

magpie's picture

I heard the Amsterdam bourse had rum and corn liquor listed.

francis_sawyer's picture

 2012: Stock Trading only occurs between HFT algos (oh yeah, & Robot Trader & MDB buying a share of Lululemon & Faceplant when they get their allowance money on Fridays)...

Mr Lennon Hendrix's picture

On July 13th make the best investment you can!  Take back the real money supply by buying silver!

ParkAveFlasher's picture

Does Martha Stewart still sell pewter?

The Monkey's picture

Central banks are the catalyst for the ultimate shorts. Such was the case in 1929 following a huge rally off of Benjamin Strong's activist central bank. The US was slowing fast and Stong's NY Fed bought time but also massively ELEVATED prices. As the world descended into what started as a recession, the Fed sealed the deal by putting a huge distance between the floor and the ceiling. October 1929, the whole thing came crumbling down.

Don't say I didn't warn you when buyers show up in mass after the ECB plays the role of the pied piper.

The Monkey's picture

50 basis points IS NOT priced in. Peripherals will rally hard on a cut this big. Within 3 weeks, everything will look extremely bullish once again.

d edwards's picture

If you had invested a dollar in the stock market in 1800-assuming you would be 21 years old to have an investment account, you'd have to be 235 years old.

Drachma's picture

Think generational wealth transfer. That's what are masters do.

Popo's picture

Let's talk about the fact that BofA/Merril is doing a long-term ultra-macro analysis to begin with.     Does anyone remember ever seeing such broad-term macro analysis from BofA before?

This research goes back to 1880!   Hardly your normal report from BofA!    What does this tell you? 

It says to me that BofA is increasingly aware that long-term macro forces are at play, that a generational event approaches and that they are looking deep into the historical charts for insight on the severity, duration and performance of said event.

Don't look at what the charts themselves tell you.  That, you probably already know.   Instead, read between the lines:  Look at who is making the charts and ask 'why'?   

Turin Turambar's picture

After your heirs passed on the original investment plus dividends multiple times over the years through probate, the net result to you AFTER inheritance taxes = $10! ;-)

 WooHoo!  Don't blow it all at once at McDonald's.  Doncha Luv u sum fweedom?  LOL

strangeglove's picture

Yeah but i bout Apple so what?

EscapeKey's picture

"This time is different."

natty light's picture

We've smoothed out the business cycle /sarc

mumbo_jumbo's picture

what's the same and always will be is human nature.....and how easily it can be fooled.

Freddie's picture

I saw he source of the report and had to laugh. Merrill Lynch - destroyed by Obama's brother Stan O'Neil and Bank of America.   Who would invest with a company owned by corrupt and bankrupt Bank of America?   What scum.

veyron's picture

"1 out of 2: the number of years since 1871 that the S&P 500 has had a negative real price return"

"0 out of 2: the number of years since 1871 that Gold has had a negative real price return"

AchtungAffen's picture

>>"0 out of 2: the number of years since 1871 that Gold has had a negative real price return"



What? That can't be right. You're telling me that all the way until Brown's Bottom, gold kept rising in real terms? Even when it hit like 200 an ounce?

veyron's picture

* rounding error -> at most 25% of years

Tall Tom's picture

Actually he told half of the story. Yes Gold has not had a Negative Real Price Return since 1871.


Of course Gold has neither had a Positive Real Price Return since 1871.


What you do not understand...what you FAIL TO GRASP...the concept WHICH ELUDES THE THICK AS A that Gold IS MONEY.


Currencies fluctuate in terms of Gold...NOT THE OTHER WAY AROUND.


I will always be able to trade my Gold for Currency. There will always be those willing to make that trade.


However...IN THE NEAR FUTURE...there will come a day when I WILL NOT BE ABLE TO TRADE MY CURRENCY FOR GOLD. Take heed...that day approacheth.


Tall Tom

I Cor 13

q99x2's picture

Shut BofA down. Close them down.

Fluffybunny's picture

Hey, they provided us with these great charts.

I think this would make excellent toilet reading for when you're taking a shit, you know, instead of reading the backs of shampoo bottles.

hugovanderbubble's picture

THLD - Threshold Pharmaceuticals - Biggest Potential Winner vs Pancreatic and Prostate Cancer next years 


Lucky Guesst's picture

You forgot to factor in the future class action lawsuit or the jail time for faking the research studies.

slaughterer's picture

Over the LONG RUN, we are ALL DEAD>  Fuck BAC.  

dracos_ghost's picture

An even better stat for the bulls: $1 invested
in US large company stocks in 1824 would be
worth close to $3,642,000 with dividends
reinvested, illustrating the power of

Fock, I was born in 1824 and I only have $50 left. Go figure.

How these people keep their jobs is baffling. But then again, why people listen to this shite is equally as baffling.

Tirpitz's picture

Not all Twentyfourers are millionaires by now. Some had trusted such beacons of integrity like PanAm and Enron, Hartford and National Steel, Worldcom and General Motors, to name just a recent handful.

While compounded management boni went into orbit, the common shareholder better is quickly put onto the red list of endangered species. Many holders are left holding the empty bag and just won't be able to recover from the ongoing Fed-sponsored slaughterfest.

Meanwhile Corzine is still at large...

Kamehameha's picture

My Grandmother (God bless her soul) gave me a 10 share certificate of AT&T, probably from the early 1960's.  Do you think AT&T shareholder department would even acknowledge that share existed on their books?  HELL NO!!!!  They did not want to give shit for it.  Much less for the stock splits and back dividends and multiple ownerships since then!!

bank guy in Brussels's picture

Interesting p. 97 on percentage of time countries have been in default or restructuring since 1800 ...

Spain the worst in Western Europe, around 24% of the time ... In the world as a whole, Greece is the King at around 48% ...

First class chart porn, thanks, Tyler!

Tirpitz's picture

As of Greece, I recently came across this gem here:

"That the number of countries involved in overborrowing is growing larger is a fact that owes itself primarily to economic policies pursued by these same governments. Yet the tolerance the international financial community has demonstrated toward this development should not be underestimated. This unpardonable laxity is shared not only by the international banks that continue to lend to them, but also by the International Monetary Fund, whose annual reports about these economies are extremely indulgent and optimistic.

Greece is a good case in point. An IMF mission visited here in early June and gave a mixed report: On the one hand, it admitted that policies followed by Prime Minister Andreas Papandreou's government from 1981-85 had been a catastrophe for the country; on the other hand, the IMF accepted the targets the government had set itself for 1986-87 - as though these targets had already been realized. The IMF took this position despite all the signs showing that these targets are not attainable and that the stabilization of the Greek economy is non-realizable, at least under the present conditions..."
(from Constantin Collmer, in the Wall Street Journal, Sept. 2, 1986)

Seems some things never change.

reader2010's picture

Stock Market is the best invention ever. Too sad it wasn't invented by the Americakkkans tho. 

AchtungAffen's picture

If pushing papers and artificially inflating assets is what you call the best invention ever... I'll give you a Tulip with your order...

francis_sawyer's picture

I'd send lillies... (but your reference is noted)...

Uber Vandal's picture

This article neglected to mention the all time high of gold in 1869 of $162.50. When adjusted for inflation, that is about $2628.

That amount, adjusted for inflation, is also higher than the "bubble" that people often speak of in regards to gold in 1980.

$1 invested in large company stock would quite possibly be zero, for how many DJIA businesses can be traced back to 1824? Not even the railroad industry existed then, and GE did not come along until about 1896.

And IF you did amass that $3,642,000, from 1824, you would be either over 188 years old, or long dead.

Also, that $1 of then had the buying power of roughly $20 today. No wonder there were half cent coins in circulation then.



Unprepared's picture

Assuming their ridiculous scenario, $1 invested over a very aggressive period of 40 years would return $24. Keep in mind that "normal" person doesn't start his professional life a millionaire, but steadily accumulate savings (sometimes starting from a negative position), the multiplier effect is at best half that (12X the average saving).

If you assume a very conservative inflation rate of 2.5 per annum, the 24X becomes 3.5X, adding the saving life cycle, you would be very lucky to double your average savings in real terms over a period of 40 years.

Ignoring transaction costs, non-existing index over that period to invest in and idiosyncratic risks,

duo's picture

The real take-away is that stocks have averaged 1.5% above inflation since 1913, so you could double your real wealth in a lifetime, but if you bought at the wrong time, you might have been better off just holding gold.  Note, I didn't say Treasuries or cash under the mattress.

Hulk's picture

It is my sad duty to announce that gold is now worthless

Apparently, with the discovery of the god particle, they can now manufacture an infinite supply of the stuff...

francis_sawyer's picture

So the "god particle" was Bernanke's printing press all along?

blindman's picture

google miles mathis and unified particle
theory, for kicks, then return to the
matrix of bullshit if you like.

Likstane's picture

I just sprained my brainstem.

strangeglove's picture

But i bought Apple in 1822 duh!

francis_sawyer's picture

Was that when a 'Newton' was actually, um, Newton?

Tall Tom's picture

A Newton was a Newton when it could accelerate 1 Kilogram of mass at 1 Meter per Second per Second.


Tall Tom

I Cor  13

midgetrannyporn's picture


if invested in the right companies two hundred freaking years ago with dividend reinvestment what a crock! Zero a million times over if invested in the wrong companies. I could have won $40M on the lottery too if I had a damn time machine. Stock brokers and time share salesmen.

AchtungAffen's picture

Plutocrats in power - they screw - plutocrats out of power due to popular revolt - the populus gets comfy and distracted with smoke and mirrors - they start to destroy the public thing and everything that acts as a balance between privates - Plutocrats in power again

catch edge ghost's picture

Where were you on Black Monday?

I was oblivious, helping to rattle sabres with Libya over a Line of Death or some such nonsense. My biggest concern back then was Liberty, but Liberty just meant getting to shore for a few hours.

Twenty-five years and many 'careers' later, not much has changed for me in that regard. Liberty still means trying to get to a shore, but instead of saluting the quarterdeck and heading off to get hammered, I surf the web, looking for any beachhead still defended by Truth.

I think of Zero Hedge as one of those beaches, and of most of you clowns as shipmates.

Sweepers, man your brooms.
Happy 4th.