“THE stock market has predicted nine out of the last five recessions.” Paul Samuelson wrote this famous line for Newsweek in 1966. Do bear markets really lead to recessions?
CNBC’s Steve Liesman wrote an article about this in February 2016 and noted Samuelson was roughly right as in the post-World War2 era, there were 13 bear markets in the United States that led to seven recessions within 12 months, and when the average bear market leads to a recession, it follows in about 8 months. Another finding was the longer the bear market the more certain the recession.
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