That ‘70s Show

Is it 1970 all over again?

Energy price increases, negative real interest rates, and a slowing economy have many people making the comparison. Add in the froth of Dow 14,000 as compared to the “Nifty Fifty” of yesteryear and the similarities seem a cinch.

But let’s look at some details. In the early ‘70s credit was pretty easy to get. With the sub-prime crisis, banks have tightened underwriting standards. In the ‘70s we lived in a bipolar world, with an ascendant Communist block buoyed by US failure in Vietnam. Now the US is the world’s only superpower, and comparisons of Iraq to Vietnam seem far-fetched. In the ‘70s US exports were collapsing, stymied by an overvalued dollar. Now trade is burgeoning, and a hypercompetitive environment continues to drive innovation and price wars.

Comparisons of the current economy to the ‘70s are superficial, at best. At worst, they amount to little more than fear-mongering.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T18:59:58+00:00 May 28th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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