Who remembers Jan 1995?

Discussion in 'Economics' started by WilderMan, Jan 13, 2009.

  1. Looking at the attached chart, who can recall policy/fiscal/other events that may have caused this breakout?
     
  2. Sorry, screen capture quality is pretty rank. Looking at the Dec '94/Jan'95 period on the S&P 500, significant and lasting break from previous trendline
     
  3. The cause of this was fundamental.

    After 40 years the House of representatives went over to the Republicans 1/20/95
    The House is important because they control the budget process.

    Newt Gringrich and the Contract with America was a plan to balance the budget and more importantly it was a check on the leftist and reckless Clinton Whitehouse to that date.

    Of course, in 5 years Gringrich was successful and politically forced Clinton to the middle and together they balanced the budget.
     
  4. Daal

    Daal

    Netscape IPO was in Aug 1995 so it isn't that
     
  5. So, on election of a conservative congress, the market anticipates forthcoming reforms. I could see that. I also notice this break is within 1 yr of the boomer generation average demographic age of 40; any revisions to investment (401k, capital gains, etc...) policy expected or passed at this time?
     
  6. My chart shows a rally in treasury note futures prices and likely a reduction in USA interest rates about year 1995. I have futures charts that show a bull market in grains and cotton during 1995, maybe there was a drought.
     
  7. styron

    styron

    Mexico financial crisis. $50 billion flowed into Mexico. U.S. banks were no longer in danger of collapsing as a result.
     
  8. 321rr

    321rr

    Kobe earthquake in Japan, causing Nick Leeson to destroy Barings.
    This would have caused the spike in treasuries.
     
    #10     Jan 13, 2009