Although the above chart suggests stock
market nervousness, it was classical with a bearish post election year, a
cyclical bottom in the mid-term election year, followed by the normally
bullish pre-election year and election year.
The market anticipated the 1974 recession by
over a year.
This recession was rather easy for the market to spot with OPEC embargos, rising oil prices,
long lines at gasoline stations, and political upheaval.
Again, non-producers were influencing their
false power on the international economy. OPEC, a collection of
non-producers, who lucked out by being born on huge oil reserves imposed
an embargo in 1973. This dishonest, non-value added behavior, like all
those before, contributed a
recession and a bear market.
The market again anticipated the 1974
recession a little early. Nixon's resignation was not influential. Rising oil prices was
entirely influential. The market showed tremendous bullish respect for tax
shelters. Congress passed legislation helping the parasitical elite to
avoid hefty taxes. Most members of congress are professional people, who
benefit tremendously from these shelters, while the common blue collar
worker enjoys few of these benefits. On the other hand, hard working
capitalists, who can afford accountants and attorneys would also benefit.
So, its passage was not entirely a bad thing, although immoral to the
masses at that time.