Full Answer
What was the impact of Watergate on the stock market?
In the months around Watergate, there was certainly political turmoil for investors to worry about, but the economic headwinds were far more problematic for the stock market, which endured one of its worst stretches in history. From the start of 1973 through Nixon’s resignation in August 1974, the S&P 500 fell about 50%.
What happened to the economy in 1973 during the Watergate scandal?
The economy was mired in recession as the Watergate scandal broke. Inflation, meanwhile, was running in the double-digits. Consumer prices rose 3.6% from the prior year in January 1973. One year later, inflation was running at 9.6% year-on-year; by November 1974, inflation was up 12% year-on-year.
What was the Watergate break-in?
On June 17, 1972, five burglars were arrested during a break-in at the Democratic National Committee headquarters in the Watergate office complex in Washington, D.C. According to news reports of the time, the men wore surgical gloves, carried a walkie-talkie and short-wave police scanner, 40 rolls of unexposed film and $2,300 in crisp $100 bills.
Was Watergate the worst bear market in history?
Everyone these days seems to have one word on the tip of their tongues: Watergate. In the 1970s, the U.S. stock market endured one of the longest and most brutal bear markets in its history. After the Dow nearly topped 1,000 — topping out at 990 — for the first time in 1966, it would not regain this level on a closing basis until 1982.
What caused the stock market crash of 1974?
The OPEC oil embargo of October 1973 and the Watergate scandal that led to President Nixon's resignation in August 1974 accelerated the declines. The long grind downward stoked investor pessimism about when stock prices might ever recover.
What happened to stock market in 1973?
The 1973–1974 stock market crash caused a bear market between January 1973 and December 1974. Affecting all the major stock markets in the world, particularly the United Kingdom, it was one of the worst stock market downturns since the Great Depression, the other being the financial crisis of 2007–2008.
What happened to the stock market in 1972?
On November 14, 1972, the Dow Jones Industrial Average (DJIA) crossed the 1,000-point mark, 21,652 days after its inception on October 7, 1896. The index had topped 100 in 1906, 300 in 1928, 500 in 1956, 700 in 1961 and 900 in 1965.
What happened to the stock market in 1970s?
Unfortunately, the period with the most similarity to now is the 1970s, a decade with wars that led to commodity shocks–which led to inflation, followed by recession, capped with skyrocketing rates. And through it all, a sustained stock market downturn persisted after a period of “irrational exuberance.”
What was the reaction of Gold and Watergate?
However, the legalization of gold for American ownership due in 1975 caused the rally to resume going into December 1974 on wild European speculation that had anticipated a huge demand from American citizens.
Who was followed by Nixon during the OPEC crisis?
The crisis was merely compounded by the fact that Nixon was followed by Ford, who did little to restore confidence, and then by Carter, who destroyed America’s credibility.
What happened in the 1980s?
Eventually, the stock market rallied going into 1980 during the Carter Crisis period when the bonds continued to fall to new record lows. Capital became concerned about government and a flight to quality began. This resulted in capital fleeing the bonds markets and moving directly into the share market. Gold & Watergate.
Why did gold outperform the S&P 500?
However, gold outperformed the S&P 500 due to the fact the dollar was declining sharply on world markets. Gold acted more as a hedge against the currency decline since it is a non-national commodity with international value.
When did the S&P 500 peak?
The US stock market (basis S&P 500) also peaked during January 1973 at 120.24. As Watergate continued to grow in significance, the S&P 500 fell almost relentlessly with the exception of a 2 month rally during September/October 1973. The S&P 500 fell reaching its lowest monthly closing in September of 1974 following Richard Nixon’s resignation.
What was the low of August 1974?
From the 1972 high of 142.03, the August 1974 low was established at 86.29 during the week of the 26th. Following the resignation of President Nixon, the US bond market recovered moving higher going into the week of February 17th reaching the 99.31 level.
Who was responsible for the wiretap of the Watergate headquarters?
Regarding the burglary and illegal wiretapping of the headquarters of the Democratic National Committee in the Watergate complex by members of President Richard Nixon 's re-election committee and subsequent abuse of powers by the president and administration officials to halt or hinder the investigation into the same. (source: Wikipedia.com)
What year did the Watergate babies pass?
Many of the freshman congressmen are very young; the media dubs them "Watergate Babies". • December 31, 1974: As a result of Nixon administration abuses of privacy, Privacy Act of 1974 passes into law. Ford is persuaded to veto the bill by Richard Cheney and Donald Rumsfeld; Congress overrides Ford's veto.
How much did the S&P 500 fall in 1974?
The S&P's recent high was about 20 times that, or about 2,400. By October of 1974, the S&P had fallen to just over 62, or nearly one-half its 1973 peak. That would be like the index falling to around 1,250 today. This is pretty typical for a bear market.
Who was the White House counsel at the time of the Watergate?
This narrative was confirmed in the famous "Cancer of the Presidency" conversation between Nixon and White House Counsel John Dean on March 21, 1973.
When did the S&P 500 go into recession?
Below is a chart of the S&P 500 from the start of 1972 through the end of 1974. In the last of those years, the U.S. entered a deep recession, likely due to falling confidence and an OPEC-induced spike in energy prices.
What was the origin of the Watergate break in?
The origins of the Watergate break-in lay in the hostile political climate of the time. By 1972, when Republican President Richard M. Nixon was running for reelection, the United States was embroiled in the Vietnam War, and the country was deeply divided.
What happened at Watergate in 1972?
In May 1972, as evidence would later show, members of Nixon’s Committee to Re-Elect the President (known derisively as CREEP) broke into the Democratic National Committee’s Watergate headquarters, stole copies of top-secret documents and bugged the office’s phones.
How many conspirators were indicted for the Watergate scandal?
Meanwhile, seven conspirators were indicted on charges related to the Watergate affair. At the urging of Nixon’s aides, five pleaded guilty to avoid trial; the other two were convicted in January 1973.
When did Nixon's aides get indicted?
Early in 1974, the cover-up and efforts to impede the Watergate investigation began to unravel. On March 1, a grand jury appointed by a new special prosecutor indicted seven of Nixon’s former aides on various charges related to the Watergate affair. The jury, unsure if they could indict a sitting president, called Nixon an “unindicted ...
Why did Nixon get pardoned?
Six weeks later, after Vice President Gerald Ford was sworn in as president, he pardoned Nixon for any crimes he had committed while in office. Some of Nixon’s aides were not so lucky: They were convicted of very serious offenses and sent to federal prison.
How long did Richard Nixon spend in prison?
Nixon’s Chief of Staff H.R. Haldeman spent 19 months in prison while John Ehrlichman spent 18 for attempting to cover up the break-in. Nixon himself never admitted to any criminal wrongdoing, though he did acknowledge using poor judgment.
How long did Nixon serve as Attorney General?
Nixon’s Attorney General of the United States John Mitchell served 19 months for his role in the scandal, while Watergate mastermind G. Gordon Liddy, a former FBI agent, served four and a half years.
What was the Watergate scandal?
The Watergate scandal was a series of interlocking political scandals of the U.S. President Richard M. Nixon's administration. The scandal included a break-in at the Democratic National Committee (DNC) headquarters in the Watergate complex in Washington, D.C., on June 17, 1972, and subsequent cover-up by people who worked for or with ...
Who is the press secretary at Watergate?
Watergate complex, Washington, D.C. Mickey Sanborn—U.S. Department of Defense. Presidential Press Secretary Ron Ziegler responded that the president would have no comment on a “third-rate burglary attempt.”.
What evidence did the conspirators destroy?
Meanwhile, the conspirators destroyed evidence, including their burglary equipment and a stash of $100 bills. Jeb Magruder, deputy director of CREEP, burned transcripts of wiretaps from an earlier break-in at the DNC’s offices.
Who were the coconspirators in the burglary?
Soon after, Woodward and Bernstein and Federal Bureau of Investigation (FBI) investigators identified two coconspirators in the burglary: E. Howard Hunt, Jr. , a former high-ranking CIA officer only recently appointed to the staff of the White House, and G. Gordon Liddy , a former FBI agent working as a counsel for CREEP.
Did the Nixon administration have any involvement in the Nixon reelection campaign?
The preponderance of early media reports, driven by a successful White House public relations campaign, claimed that there had been no involvement by the Nixon administration or the reelection committee. Meanwhile, the conspirators destroyed evidence, including their burglary equipment and a stash of $100 bills.
Who was the gatekeeper in the Watergate investigation?
H.R. Haldeman. HIS ROLE: The Nixon administration White House chief of staff— known as the gatekeeper” to the Oval Office who once called himself "the president's son-of-a-bitch"—became a key figure in the Watergate probe as investigators zeroed in on tape-recorded conversations of White House meetings.
Who was the FBI agent who was arrested at Watergate?
James McCord. HIS ROLE: A former CIA officer and FBI agent, McCord was one of the five burglars arrested at the Watergate complex, and the “ chief wiretapper ” of the operation. During the burglary, McCord, then security director of the Committee to Reelect the President (or CREEP), left a piece of tape on the latch of a stairwell door, ...
What was the effect of the firing of Cox?
Nixon’s firing of Cox fueled the Watergate investigation, leading to a public backlash against Nixon and Congressional resolutions calling for his impeachment. POST-SCANDAL: After leaving Washington, Cox—who had previously served as solicitor general—taught constitutional law at his alma mater, Harvard Law School.
What was the gap between Nixon and Haldeman?
One of the tapes included a now-famous 18-and-a-half-minute gap, which was later revealed to include a conversation between Haldeman and Nixon. Haldeman was also implicated in the so-called “smoking gun” tape, in which Nixon talked about using the CIA to divert the FBI’s investigation of Watergate.
What was the role of Hunt in the Watergate?
HIS ROLE: A former CIA operative, Hunt was a member of the so-called “Plumbers,” an informal White House team tasked with preventing and repairing information “leaks” such as the 1971 release of the top-secret Pentagon Papers. After investigators found his phone number in address books belonging to the Watergate burglars, they connected the dots between the burglary, President Nixon and his re-election campaign.
What happened to the key players in the historical scandal that brought down a U.S. president?
president. Author: Alice Popovici. On June 17, 1972, five burglars were arrested during a break-in at the Democratic National Committee headquarters in the Watergate office complex in Washington, D.C. According to news reports of the time, the men ...
Who was the White House chief of staff to Nixon?
HIS ROLE: As deputy White House chief of staff to President Nixon from 1969 to 1973, Butterfield controlled the secret taping system Nixon had installed in the Oval Office. He revealed the existence of the tapes when he was questioned by the Senate Watergate Committee, effectively sealing Nixon’s fate.
