If you own stocks, this timeline should help you distinguish between your friends (people whose actions boost the value of your 401k) and your foes, and possibly even make educated investment decisions in the future.
September 2008. Lehman crash. Stock market enters a bearish trend.
February 17, 2009. Obama signs the stimulus bill.
March 9, 2009. Stock markets reaches the bottom, stages a ‘V’-recovery and enters a bullish trend, gaining 37% during the first 365 days of stimulus.
January 19, 2010. Dow closes at 10,725.
January 27, 2010. Paul Ryan rolls out his “balanced budget” roadmap.
February 2010 and beyond. Republicans make increasing amounts of noise about balanced budget and curbing the deficit. Stock market jitters and goes sideways.
Late August 2010. We start hearing talk of QE2. As of August 17, BofA analysts estimate the likelihood of QE2 at “35%”.
August 31, 2010. Dow closes at 10,014. Stock market enters a bullish trend and gains 15% in two months.
November 2, 2010. Democrats lose the House.
November 5, 2010. The bullish trend ends as markets ponder the impact of balanced-budget crowd on the economy. Debates over the extension of Bush tax cuts. Stock market falls 5% in four weeks.
Late November 2010. Evidence emerges that Republicans are going to give up their balanced-budget stance and agree on more spending in exchange for tax cuts for the rich. (The deal is actually put in writing on December 7th.) The bullish trend resumes. Stock market gains 10% to 12% (depending on where you put the start of the trend) in two and a half months.
February 14, 2011. Obama gets on the balanced-budget bandwagon and rolls out a budget with a spending freeze and some cuts.
February 17, 2011. Tea Party Republicans reject Obama’s budget and roll out their own, with even more cuts.
February 18, 2011. The bullish trend ends. Markets go sideways again.
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