A mental map.
At least until it gets folded so much that you can't see what's in the creases, it starts to tear, one of the kids tries to make hat out of it, etc.
See links below.*
The Fat Pitch
On August 17th, 1998, the Russian government, decimated by falling oil revenue resulting from the Asian financial crisis, devalued the ruble, defaulted on its domestic debt, and declared a moratorium on payment to foreign creditors. The S&P 500 was almost in familiar territory -- 1062, and had already fallen more than 10% in anticipation.
By early October, the stock market had declined another 14%, and the 10-year US Treasury yield had declined by 152 basis points in the span of 6 months. The VIX hit an astounding 45.74 -- eclipsing the implied volatility from the crash of 1987.
Economic conditions in Russia did not begin to recover until 2000, and were not at the previous nominal GDP peak until 2003, 5 years later.
Fast forward 13 years: in the 3rd straight decade (1990s, 2000s, 2010s), we are flirting with 1120 S&P 500, the 10-year US Treasury yield has declined by 148 basis points in the span of 6 months, and the VIX is at an astounding 42.99.
The restructuring of European periphery debt -- to which its neighbours are intimately connected to, much like a dozen years ago -- hasn't happened, but it's difficult to say that the market hasn't already clearly priced that as likely already.
This is all really bad news, right?
After the market had its watershed moment, it finished the year 33% higher. The market, seeking resolution even in bad news, was able to quickly eclipse its previous highs and rally strongly for several more years....MORE
1998 As a Template For 2011's Market Action (DIA; SPY; VIX)
Equities 2011: More Like 1987 than 2008 (or is it 1903? 1998? 1873 was pretty bad...)
LTCM Co-Founder, Nobel Laureate, Scholes Says the Fund Was Doomed From the Start (we are still using 1998 as a mental map for 2011):
Here's what the DJIA did in that that long ago summer of 1998:
Volatility: A Double Top in the VIX (VXX; XIV; TVIX)