Ken Fisher for Forbes - Back to the Future the Bull Rumbles Forward

The most stunning unnoted market phenomena right now are the parallels between the past eight years and the period between 1988 and 1997. History never repeats itself, but this rhymes. This bull cycle may last longer than anyone imagines–maybe the longest ever.

Some 1990s parallels were larger than now, some smaller and some surely coincidental. That said, substitute the 1990”²s “S&L Crisis” for 2008”²s “Home Mortgage Crisis,” and “Resolution Trust Corp.” (“fixing” that mess) for “TARP” (“fixing” this mess). By 1991, 911 financial firms had failed, for an inflation-adjusted $547 billion. This time far fewer firms failed–for “merely” $421 billion.

Bear market and recession timing parallel (though bigger now). Switch Clinton beating Bush 41 for Obama following Bush 43. Then two years later the GOP gaining gridlock power (1995”²s strongest GOP Congress since the ’50s; in 2015 the Republicans added the Senate for the strongest GOP Congress since the ’20s).

Europe’s über-long ’90s recession linked to fiscal austerity tied to “converging” the euro. Europe saw two recessions this time–together as long as the ’90s quagmire–with austerity tied to saving the euro. Both times the PIIGies suffered double-digit interest rates.

Rhyming coincidences: Israel electing Netanyahu twice? Ebola and avian flu fears? Failed Scottish and Quebec independence referendums? El Niño? Clinton scandals (Lewinsky, Benghazi)?

But causal? Compare 1997”²s emerging markets’ “Asian Contagion” to our emerging markets’ currency crisis. The superstrong dollar. Most basic: evolving yield-curve spreads swaying similarly over both eras (chart ‘em and see). Ditto for corporate debt spreads and commodity price direction.

Is now just like then? Of course not! But note: Until 1998 the phrase “tech bubble” didn’t exist. The early/mid-’90s depressed our spirits–stretching that cycle (until euphoria erupted). Ditto now! This bull cycle plods joylessly without animal spirit magnetism. Shy emergent euphoria or a new, big bad disruption, this grinding bull grinds on–likely years longer than fathomable. Of course, that isn’t certain.

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