Ahead of the Curve

CHAPTER FOUR

An Antidote for the Recession Obsession

I remember my first recession. It occurred during 1969 and 1970, when I was a budding analyst at the Bank of New York. Despite the Vietnam War and growing social unrest, the late 1960s had been a period of considerable growth and prosperity. The stock market had performed strongly in 1968 (the S&P 500 index rose 8%). The rate of economic growth had slowed but remained positive through the second half of 1968 and the first half of 1969 and actually accelerated late in the year. Corporate profits had increased steadily over the preceding year, and the unemployment rate was actually continuing to decline. It was only in the very late months of 1969 that the likelihood of a recession became apparent, ...