It was therefore of great interest to me when a message dropped into my inbox from Dave Rosenberg, chief economist and strategist at Canadian wealth management firm Gluskin Sheff, a company that looks after the needs of high-net-worth private clients and institutional investors. Founded in 1984, the company has around $8.2bn (£5.4bn) of assets under management.
Mr Rosenberg is someone I greatly respect and has had the benefit of witnessing at first hand the trials and tribulations in financial markets well beyond my lifetime. What sparked my interest right now is that Mr Rosenberg believes that the oil price slump in 1985-86, when the price of black gold declined by 68 per cent from a peak of $31.80 a barrel on 21 November 1985 to a low of $10.40 a barrel at the end of March 1986, exhibits many similarities with the ongoing oil bear market. Indeed, Mr Rosenberg notes that “global economic growth back then was around 3 per cent, as it is now; neither hot nor cold. The oil market was riddled with excess supply, and the Saudis were not willing to close the gap”. It sounds a familiar story to the one we have seen unravel since the oil price peaked out at $115 a barrel last June. In both cases, the US benchmark crude price, West Texas Intermediate (WTI), fell by more than 60 per cent.