Major Bear Markets

[Jonathan Nitzan]

A Note by Shimshon Bichler and Jonathan Nitzan

Since 1791, U.S. stock prices rose 36 times faster than the U.S. CPI. This exponential growth, though, has been punctured by seven ‘major bear markets’ (MBM), in which the stock index, measured in ‘constant prices’, have fallen by 50% or more. Over the past century, each of these MBMs represented a significant ceordering of the U.S. capitalist mode of power.

The MBM of 1905-1920 was followed by the rise of corporate capitalism; the MBM of 1928-1948 was followed by the rise of the Keynesian welfare-warfare state; the MBM of 1968-1981 was followed by the rise of global neoliberalism, and the MBM of the twenty-first century, from 1999 to 2008, seems to signal the emergence of a state of capital increasingly subservient to the differential accumulation of global dominant capital.

More:

1. A CasP Model of the Stock Market (2016) https://bnarchives.yorku.ca/494/
2. Financial Crisis, Inequality, and Capitalist Diversity: A Critique of the Capital as Power Model of the Stock Market (2020) https://bnarchives.yorku.ca/599/
3. How the History of Class Struggle is Written on the Stock Market (2020) https://bnarchives.yorku.ca/658/
4. Reconsidering Systemic Fear and the Stock Market: A Reply to Baines and Hager (2021) https://bnarchives.yorku.ca/696/
5. The Ritual of Capitalization (2021) https://bnarchives.yorku.ca/707/

 

 

 

 

• This topic was modified 2 years, 2 months ago by Jonathan Nitzan.

Topic

[Jonathan Nitzan]

1. The series in this figure shows the annual rate of change of the CPI-deflated U.S. stock market index, expressed as a 10-year trailing average. These transformations mean that every annual observation in the series measures the average annual rate of change of the CPI-deflated index over the past 10 years.

2. The chart also marks one and two standard deviations above and below the historical mean of the series.

3. The current level of the series is more than two standard deviations above its historical mean.

4. If I were a betting man, I’d say that the U.S. is about to enter a major capitalist crisis sometime during the next decade.

• This reply was modified 2 years, 2 months ago by Jonathan Nitzan.
• This reply was modified 2 years, 2 months ago by Jonathan Nitzan.

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