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The Ultimate History-Of-Markets Chartbook
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:
You're welcome...
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bubble>crash>bubble>crash>bubble>crash
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.
I heard the Amsterdam bourse had rum and corn liquor listed.
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)...
On July 13th make the best investment you can! Take back the real money supply by buying silver!
Does Martha Stewart still sell pewter?
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.
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.
Strong died in 28.
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.
Think generational wealth transfer. That's what are masters do.
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'?
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
Yeah but i bout Apple so what?
"This time is different."
We've smoothed out the business cycle /sarc
what's the same and always will be is human nature.....and how easily it can be fooled.
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.
"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"
>>"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?
* rounding error -> at most 25% of years
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 BRICK...is 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
Shut BofA down. Close them down.
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.
Basement Dweler^
THLD - Threshold Pharmaceuticals - Biggest Potential Winner vs Pancreatic and Prostate Cancer next years
You forgot to factor in the future class action lawsuit or the jail time for faking the research studies.
Over the LONG RUN, we are ALL DEAD> Fuck BAC.
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.
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...
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!!
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!
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.
Stock Market is the best invention ever. Too sad it wasn't invented by the Americakkkans tho.
If pushing papers and artificially inflating assets is what you call the best invention ever... I'll give you a Tulip with your order...
I'd send lillies... (but your reference is noted)...
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.
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,
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.
It is my sad duty to announce that gold is now worthless
http://finance.yahoo.com/
Apparently, with the discovery of the god particle, they can now manufacture an infinite supply of the stuff...
So the "god particle" was Bernanke's printing press all along?
google miles mathis and unified particle
theory, for kicks, then return to the
matrix of bullshit if you like.
I just sprained my brainstem.
But i bought Apple in 1822 duh!
Was that when a 'Newton' was actually, um, Newton?
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
$3,642,000
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.
Survivorship bias.
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
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.
Many failed to understand the fact that ZH is an arm of DHS for collecting and compiling the list of the IP addresses.
Do you really think they need sites like this to accomplish that goal?
If you are going to be paranoid, and there's little reason not to be, at least be sensible about it. Frontal Lobe ftw!
Paranoia is best in this insane country. The motto "Live Free or Die" trumps paranoia.
oops, this goes down one
ZeroHedge is actually a friend of the DHS. Now, the ZeroHedge folks who are also NRA members are soul mates of our founding father Thomas Jefferson could be a problem for the politically correct elite running this country. The real question will be our voluntary army who were largely born by the poor folks of this country. Will they fire on their Mothers?
DHS can cause individuals and groups trouble, but their foundation is set in the shifting sands of lies and manipulations and truth will win. I hope the change will be a bloodless one for my children!
Yes, the change is bloodless via GMO food.
My; aren't you a happy camper:)
"ZeroHedge is actually a friend of the DHS."
SHHHHHH!
Now that you ratted them out you are fema camp bound for sure.
They are almost there to get you. You better get out NOW!!!
Keep an eye out for drones and black helicopters.
Yeah. I do not believe that they are an arm of the DHS.
But I do believe that ZH is data mined by DHS and NSA Agents.
When a respected jounal labels Tyler as the Second most Financially dangerous man in America then you can be certain that he is being watched and scrutinized for the subversive seditious materials which are distributed here on the site.
Of course the Truth is always dangerous to the criminals in power. They will label it as they do in order to dissuade people from OPDENING THEIR EYES. They want the public myopic and bitemporally hemianopic. Blind people are so much easier to manage.
Tall Tom
I Cor 13
If they let the fookin' gold price rise to astronomical levels, instead of destroying currency purchasing power by attempting to control bullion investment, gold markets would support liquidity. That's the fookin' irony.
Oh wait. Here comes the bullion banks 'sweetie man'
http://youtu.be/zYqyfQ9AMpw?hd=1
Thank You Tyler. :)
Thank You Tyler. :)
Macro stock charts are always up as they exclude hundreds of bankruptcies.
*
Liars, damn liars, and statisticians.
*
Irrational Consumerism (or The Few Companies Who Feed the World)
http://vigilantcitizen.com/vigilantreport/irrational-consumerism-or-the-...
More fucking stuff is what s needed to keep the scheme going. F , people better wake up and stop this shit.
Tyler,
U rock. Thank you.
Interesting charts but not much on gold. Notice how it's left out of the asset comparisons.
People still believe gold is a commodity. Unbelievable.
For the time being i suppose that is good for us...
They want YOU to believe that gold is a commodity, like orange juice. So they can laugh at you in the MSM.
I'm still not buying equities.
Nice try Bunk of Amerika.
Happy Fourth to all of my wonderful American friends from the Great White - except of course all of those Wall Street bankster fuckers that are destroying the world.
Best chart porn compendium yet.
ZIRP & CTRL P as policy because we have the world's reserve currency and won't rein in debt until the bond market explodes. (according to B of A)
Just one of many interesting and terrifying observations.
9.13
http://www.youtube.com/watch?v=_2Kt4moES0U&feature=related
Great video and the bullshit starts around 8:00, yeah sure, rollup that doobie and puff away.
0.06% : the interest they pay me on my "High Yield Savings Account"
you forgot to add anoehr ZERO with QE3 coming.
0.060 percent?
No wait, you must have meant 00.06 percent.
No wait...
I think u got it- 0.006 and after QE3 and just in time for QE4- 0.0006 and you can see the pattern emerging.
You nailed it.
This is the heist.
United States - united limp dicks now two generations deep paying the piper what isn't his.
$3,642,000: What $1 invested in US large company stocks in 1824 would be worth today with dividends reinvested
The fund managers here will jump all over this. But so will I with the contention that this is meaningless in the context of a 50 year individual investment lifespan when one needs much the principal at multiple points in time. Maybe this is relevant if your great, great, great, great grandfather could afford to ignore the extra loot and resist the impulse to sell when the crash after each bubble is well under way, and so could your great, great, great grandfather; and your great, great grandfather; and your great grandfather; and your grandfather; your father; and you.
On a long enough timeline the survival rate of everyone drops to zero.
very kind, thank you.
.
A Fourth of July Speech by Mark Twain
Gutenburg.org ^ | 4 July 1872 | Mark Twain
http://www.freerepublic.com/focus/f-news/1660212/posts
...
"..This is an age of progress, and ours is a progressive land. A great and glorious land, too--a land which has developed a Washington, a Franklin, a Wm. M. Tweed, a Longfellow, a Motley, a Jay Gould, a Samuel C. Pomeroy, a recent Congress which has never had its equal (in some respects), and a United States Army which conquered sixty Indians in eight months by tiring them out which is much better than uncivilized slaughter, God knows. We have a criminal jury system which is superior to any in the world; and its efficiency is only marred by the difficulty of finding twelve men every day who don't know anything and can't read. And I may observe that we have an insanity plea that would have saved Cain. I think I can say, and say with pride, that we have some legislatures that bring higher prices than any in the world.
I refer with effusion to our railway system, which consents to let us live, though it might do the opposite, being our owners. It only destroyed three thousand and seventy lives last year by collisions, and twenty-seven thousand two hundred and sixty by running over heedless and unnecessary people at crossings. The companies seriously regretted the killing of these thirty thousand people, and went so far as to pay for some of them--voluntarily, of course, for the meanest of us would not claim that we possess a court treacherous enough to enforce a law against a railway company. But, thank Heaven, the railway companies are generally disposed to do the right and kindly thing without--compulsion. I know of an instance which greatly touched me at the time. After an accident the company sent home the remains of a dear distant old relative of mine in a basket, with the remark, "Please state what figure you hold him at--and return the basket." Now there couldn't be anything friendlier than that.
But I must not stand here and brag all night. However, you won't mind a body bragging a little about his country on the Fourth of July. It is a fair and legitimate time to fly the eagle. I will say only one more word of brag--and a hopeful one. It is this. We have a form of government which gives each man a fair chance and no favor. With us no individual is born with a right to look down upon his neighbor and hold him in contempt. Let such of us as are not dukes find our consolation in that. And we may find hope for the future in the fact that as unhappy as is the condition of our political morality to-day, England has risen up out of a far fouler since the days when Charles I. ennobled courtesans and all political place was a matter of bargain and sale. There is hope for us yet.*
*At least the above is the speech which I was going to make, but..."
...
Constitution of USA, Read It, Its simple
Links to the Constitution and Amendments and AoC
Happy 4th!
You can read all the docs below in less than 1 hour. Misinformation is rampant concerning these basic laws of the US. Read them, you will be really glad you did. In fact these documents are so simple that a group of high school students, would be able to read and interpret them and apply them to real situations, maybe with just a little help by an older person to provide some historical context and explanation of an older version of English, however for the most part the language used is 97% exactly the same as today.
http://nukeprofessional.blogspot.com/2012/07/constitution-of-usa-read-it-its-simple.html
Complete Disaster Non-Preparedness: DC Grocery Stores Out of Food, Gas Unavailable, Grid-Down as Summer Heat Rages
http://lewrockwell.com/slavo/slavo108.html
That is what happens when you train everyone to leave the farm and consume, consume, consume.
The level of unpreparedness of a majority of the population is only increasing; it won't be long before only a few know how to start a fire or cook a simple meal from scratch.
Helpless dough people are easy to starve and let die; I'm convinced it is the plan for ending the deficit.
That one dollar becoming over three million does not take into account having to trade from say the Canals Railways Enrons dotcoms housing to the next company taking off. I'd like to know how they came up with the number. Additionally average wage 200 years ago was tiny. Today 100k jobs are common that supposed three million is only 35 times such a salary.
Didn´t know the German bond yields dropped that much shortly before they skyrocked in the 1920s. Good to know that this time they dropped that much because it really is a safe investment...
OBAMA ADMINISTRATION UNVEILS “BIG DATA” INITIATIVE:
ANNOUNCES $200 MILLION IN NEW R&D INVESTMENTS
More spying in the making. WTF
http://www.whitehouse.gov/sites/default/files/microsites/ostp/big_data_p...
The FED reserve will do anything and everything to suppress Gold and Silver. Watch and see. A pop here and there and that is all Gold and Silver will do. Nothing more. I hope I am wrong.
"$3,642,000: What $1 invested in US large company stocks in 1824 would be worth today with dividends reinvested"
How is that Pierce Arrow stock doing?
Chart porn!
mmmmmmmm what nice charts you have you naughty naughty boy ;-)
Very Nice TD. I just knew BofA would do good some day...
Great post ZH, thank you for sharing.
Labor glut grows is the most important long term trend...280 mm incr in India's workforce in 25 years. Add in robotics and people will be working for pennies/hr in a few years. Only the smartest and elite will live comfortable lifes in the future.
Communism is the answer. Do yourself a favor and read up on it. Pretend its a new idea and China and Russia was not communist.
Thank you ZH ... & Happy 4th!
Why are they wasting time with 200 year timeframes.
All they have to do is pick the 9 winners at Belmont for one day, or even predict the open and close of the s&p for a single session.
Retire for life. They are frauds, making a living hustling suckers.
Did anyone verify the shit?
I look at the Merril Lynch Logo as it scrolls by on the BofA/Merril Lynch pages in the report and chuckle to myself. For years I had to listen to this same damn indiotic advert. "Merril Lynch is Bullish on America"; and they'd show you a picture of thier damn bronze bull, just in case you didn't know what one looked like. Now the same advertising copy produces a darker and more sinister message; "Merril Lynch is Bullish on America; but they're bankrupt, so maybe you needn't pay them any mind". Ha-Ha, very sardonic. I outlived the bastards.
...maps, lol. http://www.youtube.com/watch?v=ADBo0s4CbvM