Beware the Ides of Feb.

Press, 31 January 1986, Page 16

Beware the Ides of Feb.

From ‘The Economist,’ London

Those who believe that history repeats itself in regular cycles, take note. Between February 9 and 28, two very nasty cycles coincide.

On February 9, the Chinese Year of the Tiger begins. This is a year marked out for disasters, wars and misery.

In this century, previous Years of the Tiger have seen the beginning of the 1914-18 war, Britain’s general strike (1926), the Cuban missile crisis (1962) and the first 0.P.E.C.-induced recession (1974). On top of that falls a longer cycle pointed out by an “Economist” reader in Australia, Mr David McMinn. A refinement of Kondratieff’s well-known longwave theory of capitalist econo-

mies, it picks on 56 years as the period in which economic history repeats itself. Mr McMinn begins a sequence in 1817, a year of deep recession in Europe following the end of the Napoleonic wars. By 1873, the spotlight had turned to America, where speculation on the new railroads turned to stock-market panic in September that year. The New York Stock Exchange had to close for the first time in its (then) 81-year history. On to 1929 and the Wall Street crash. On October 28 that year, the Dow Jones average fell by 38 points (12.8 per cent, to 260.64 — a fall still unrivalled in percentage terms. Fifty-six years later came

1985. Oops, that was not too bad a year surely (earthquakes and volcanoes don’t count for financial cyclists)? So is the theory disproved? No, says Mr McMinn.

The crisis can slip a bit into January or Feburary of the following year. So we still have a month to see off before the cycle is broken for the first time in 250 years. To those who believe in these things, the concurrence with the start of the Year of the Tiger between February 9 and 28 is ominous. Within that period the superstitious might pick on February 13, the Ides of Febuary, as the day most likely to give us the crash of ’B6.

Copyright — the Economist.