We do not believe either the main street economy or the Wall Street financial markets were anything other than normal, reasonably healthy and logically coupled at the end of Q2 1987. To that end, the US GDP stood at $4.8 trillion and total stock market was valued at $3.0 trillion, as measured by the Wilshire 5000. That is, Wall Street stocks were stably capitalized at 62% of main street GDP.
The screaming abnormalities and disconnects set in afterwards, upon Alan Greenspan’s appointment as Fed Chair in August 1987 and the subsequent lock, stock and barrel takeover of the central bank by Keynesian monetary central planners. Over the next 34 years during which that policy heist was being implemented with virtually zero democratic accountability, a vast unsustainable gulf has opened up between the main street economy and the Wall Street capitalization of publicly traded stocks.