The Dow and the Japanese Nikkei
Update: December 26, 2008

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Time Line 1998 July 17 - Dow hits all time high of 9337.97 Sept. 9 - Bank of Japan lowers interest rates from 0.50% to 0.25% Sept. 16 - Greenspan says no "co-ordinated rate cuts" planned right away Sept. 23 - Greenspan says "inflation" under control. Let's go for "growth"! Sept. 23 - $US 3.5 Billion bail out of NY hedge fund (LTCM) brokered by NY Fed. Sept. 29 - FOMC cuts Fed Funds rate by 0.25% to 5.25%. Oct. 15 - Fed cuts Fed Funds and Discount Rate by 0.25% (5.00% and 4.75%). Nov. 17 - FOMC cuts Fed Funds and Discount rate again (4.75% and 4.50%) Nov. 23 - Dow hits all time high of 9374.27 Dec. 22 - Last FOMC meeting for 1998 - no rate change 1999 Jan. 8 - Dow up 105 to new high of 9643 Jan. 12 - Bank Of Japan spends $US 1 Billion to boost the Yen Jan. 15 - Brazil "floats" the Real - which promptly sinks Feb. 3 - First FOMC meeting of 1999 - no rate change Feb. 5 - Bank of England cuts rates by 0.5% (6.0% to 5.5%) Feb. 12 - Bank of Japan annnounces 0.1% rate cut (0.25% to 0.15%) Feb. 16 - BOJ announces that they WILL buy government bonds March 5 - Dow up 268 to new high of 9736 March 11 - Dow up 124 to new high of 9897 March 18 - Dow hits high close of 9997 March 24 - "NATO" air strikes against Kosovo begin March 29 - First ever Dow close above 10000 March 30 - FOMC meeting - no change in rates April 8 - Europe lowers rates by 0.5% (3.0% to 2.5%) April 29 - Dow hits high of 10878 May 3 - Dow breaks 11000 - new high of 11014 May 13 - Dow closes at 11107 May 14 - Treasure (30-year) bond hits 5.90% - Dow down 193 May 18 - FOMC meeting. No rate cut but "tightening bias" May 25 - Dow falls 298 points 2.75% in two days June 10 - Bank of England cuts official rates 0.25% June 10 - Treasury 30-year yield above 6.0% June 30 - FOMC meeting. Fed Funds up 0.25% to 5.00% July 16 - Dow close 11209 - New all time high August 24 - FOMC meets. Fed and Discount rates up 0.25% August 25 - Dow close 11326 - New All time high. Oct. 15 - Dow trades below 10000 - closes at 10019 Nov. 16 - FOMC raises rates for third time - Dow up 171. Dec. 31 - Dow up 44 to all time high of 11497 2000 Jan. 14 - Dow hits new high of 11722.98 Feb. 2 - FOMC raises rates by 0.25% - fourth such rise since 06/99. Feb. 11 - Dow falls 218 to 10425 - correction - 11% below 2000 high. Feb. 18 - Dow falls 295 to 10219 - correction - 11% below start of 2000. Feb. 25 - Dow falls 230 to 9862 - first close below 10000 since 4/1/99 March 7 - Dow falls 374 to 9796 - below Feb. 25 close. March 16 - Biggest 1 day Dow rise ever - up 499 to 10630. March 21 - FOMC raises Fed Funds and Discount rates by 0.25% April 4 - Dow down 496.47 intra-day. Closes down 47 April 14 - Dow down 616 - biggest one day points fall in history May 16 - FOMC raises Fed Funds and Discount rates by 0.50% June 28 - FOMC stands pat on interest rates. August 11 - Bank of Japan raises rates for the first time in more than 10 years. August 22 - FOMC stands pat on interest rates again. Sept. 6 - $US Index hits highest level since April 1986 Sept. 22 - Joint ECB,FED,BOJ intervention to prop up the Euro Oct. 5 - ECB raises rates by 0.25% Nov. 7 - ? - U.S. election indecisive - no President elect Nov. 15 - FOMC stands pat - still no "neutral bias" Dec. 1 - U.S. election goes to Supreme Court - still no winner Dec. 13 - George W Bush declared President Elect Dec. 19 - FOMC stands pat - announces end to "inflationary bias" 2001 Jan. 3 - Fed cuts Fed Funds (-0.50%) and Discount (-0.25%) rates between FOMC meetings - Dow up 299 Jan. 4 - Fed cuts Discount rate AGAIN - down 0.25%. Jan. 5 - Dow down 250 - ends week down despite rate cuts. Jan. 31 - FOMC lowers Fed Funds and Discount rates by 0.50% Feb. 23 - Moody's downgrades Japanese sovereign debt AAA to AA+ March 2 - Nikkei falls to post 1985 low of 12261 March 13 - Nikkei falls 450 points in first hour, then closes up 310 March 14 - Dow closes below 10000 - first time since Oct. '00 March 16 - Dow falls 203 points to 9827 March 20 - FOMC lowers Fed Funds and Discount rates by 0.50% March 22 - Dow hits intraday low of 9106, closes at 9389 March 30 - Nikkei closes financial year at 12999.70 April 5 - Dow rallies 403 points to 9918 April 18 - FOMC cuts Fed Funds and Discount rates by 0.50%. Dow up 399 May 10 - ECB lowers rates 0.25% to 4.50% - same as Fed Funds rate May 15 - FOMC cuts Fed Funds and Discount rates by 0.50%. May 18 - Gold leaps $US 13.80 to $US 287.80 May 29-30 - Gold falls $US 12.50 to $US 265.70 June 11 - $US Index hits post-1986 high of 120.12 June 27 - FOMC cuts Fed Funds and Discount rates by 0.25%. July 5 - $US Index hits post-1986 high of 121.16 August 21 - FOMC cuts Fed Funds and Discount rates by 0.25% August 29 - Nikkei closes below 11000 August 30 - Dow closes below 10000 Sept. 11 - Terrorist attack on World Trade Centre and Pentagon Sept. 17 - FOMC cuts Fed Funds and Discount rates by 0.50% Sept. 21 - Dow loses 1370 points in a week Oct. 2 - FOMC cuts Fed Funds and Discount rates by 0.50% Oct. 25 Dow hits 9545 - regains all but 60 points of Sept 17-21 losses. Nov. 6 - FOMC cuts Fed Funds and Discount rates by 0.50% Nov. 8 - ECB and Bank of England cut rates by 0.50% Nov. 9 - Dow regains ALL of Sept 17-21 losses Dec. 5 - Dow rises 221 points and regains the 10000 level Dec. 10 - Dow closes at 9921 - back below the 10000 level Dec. 11 - FOMC cuts Fed and Discount rates by 0.25% - Eleventh cut this year Dec. 31 - Dow loses 7.11% in 2001 - second losing year in a row 2002 Jan. 11 - Dow falls 80 points to 9987, back below 10000 again. Jan. 30 - First FOMC meeting of 2002 - NO RATE CUT Feb. 1 - Nikkei (9791) closes BELOW Dow (9907) Feb. 8 - Comex spot future Gold closes above $US 300 (first time since 02/23/00) March 1 - Dow up 263 points to 10368 - highest level since August 2001 March 19 - Second FOMC meeting of 2002 - Rates held steady April 26 - Dow falls 124 points - slips back BELOW 10000 May 7 - Third FOMC meeting of 2002 - Rates held steady May 31 - Bank of Japan steps in - twice - to buy U.S. Dollars June 7 - Dow falls 35 points to new 2002 low of 9589 June 14 - Dow falls 28 points to new 2002 low of 9474 June 21 - Dow falls 178 points to new 2002 low of 9253 June 26 - Fourth FOMC meeting of 2002 - Rates held steady June 28 - Fed, ECB, and BOJ in co-ordinated intervention to support Dollar against Yen. July 5 - Dow gains 324 points (3.6%) in half day trading July 12 - Dow loses 7.4% (695 points) in a week July 19 - Dow down 390 to 8019 - BELOW 09/21/01 low July 23 - Dow closes at 7702 July 24 - Dow up 489 or 6.3% - biggest one day percentage rise since 1987 August 13 - Fifth FOMC meeting of 2002 - Rates held steady Sept 19 - Dow down 230 to 7942 - first close below 8000 since July 23 Sept 24 - Sixth FOMC meeting of 2002 - Rates held steady Sept 24 - Dow closes at new 2002 low of 7683 Oct 9 - Dow closes at new 2002 low of 7286 Oct 18 - Seven day rally - Dow gains 1036 points to 8322 Oct 31 - Dow close 8397 - up 10.6% for Oct. First "up" month since March Nov 6 - FOMC cuts Fed Funds and Discount rates by 0.50% (to 1.25% and 0.75%) Nov 29 - Dow close 8896 - up 5.9% for Nov. Second "up" month in a row Dec 10 - Last FOMC meeting for 2002 - rates left unchanged Dec 19 - $US index falls 0.12 to 103.98 - new 2002 low - Gold at 5 year high Dec. 31 - Dow loses 16.80% in 2002 - THIRD losing year in a row 2003 Jan. 24 - Dow falls 238 points to 8131 - in negative territory for 2003. Jan. 29 - First FOMC meeting for 2003 - rates unchanged. Jan. 31 - Dow close 8053. Down 288 points or 3.45% for the month. March 19 - Start of war between US and Iraq April 11 - Nikkei hits new 20 year low close of 7816 April 25 - Nikkei hits new 20 year low close of 7699 June 5 - ECB cuts rates by 0.50% to 2.00% - 0.75% above Fed Funds rate June 25 - FOMC meeting - Fed cuts Fed Funds rate by 0.25% to 1.00% Oct 30 - US announces 7.2% GDP growth in third quarter - highest for 19 years Dec. 31 - Dow gains 25.32% in 2003 - reaches May 2002 highs 2004 June 30 - Fed RAISES US rates by 0.25% to 1.25%. First raise in four years. July 23 - Dow closes below 10000 for the first time in three months August 10 - Fed RAISES US rates by 0.25% to 1.50%. Sept. 21 - Fed RAISES US rates by 0.25% to 1.75%. Oct. 22 - Dow closes at 9757 - new 2004 low 2006 Oct. 3 - Dow closes at 11727 - exceeds January 14, 2000 high for the first time Dec. 27 - Dow closes at 12510 - new 2006 and all time high 2007 Feb 20 - Dow closes at 12786 - new 2007 and all time high Feb 27 - Dow falls 415 points - biggest one day numerical fall since 2001 Oct. 9 - Dow closes at 14164 - new 2007 and all time high 2008 July 2 - Dow closes at 11215.51 - 20.82 percent below its Oct. 9, 2007 high close (14164.53) - BEAR MARKET July 11 - Dow trades below the 11000 level for the first time since 2006

Point & Figure Charts based on closing prices.

The Dow: 20 point x3 Close: 8515.55	The Nikkei: 40 point x 3 Close: 8739.52

The Intervention On June 17, 1998, there was a joint currency intervention by the Fed and the Bank of Japan to prop up the Yen. That was two months before the world financial crisis which had begun a year earlier in Southeast Asia reached a peak with the Russian debt default. As is well remembered, the U.S. Fed "solved" the financial crisis with its three rate cuts in seven weeks between September and November of 1998. Those rate cuts have now been reversed with three rate rises between June and November 1999. The charts above show the recent comparison between the Japanese and U.S. stock markets. The data below shows the performance of these two markets since the last joint currency intervention by the Fed and the Bank of Japan back in mid-1998. The column labelled "July 1998 High" refers to the high point reached by both the Dow and the Nikkei after the joint currency intervention of June '98. Here is the latest - to December 26, 2008:
MARKET	All Time High	July 1998 High	In 2008
Nikkei Dow	down 77.52%	down 47.77%	down 42.91%
Dow Jones	down 39.88%	down 8.81%	down 35.80%