March 6, 2009

Worse Than The Great Depression

Did we need more bad news right before the weekend? Don Luskin has got it.

Over the last couple years I loved to ridicule all the scaremongers who always said this, that or the other thing is “the worst since the Great Depression.” I stand by my ridicule, for the most part -- those prophets of doom were mostly broken clocks who look right now just by sheer luck. But there's no question now that things have gotten quite bad in the economy and the markets.

So let me do the preachers of Armageddon one better. Today's stock market isn't just the “worst since the Great Depression,” like they're so fond of saying. No, it's even worse than the Great Depression.


20090305depression.gif

[...]In other words, to be no worse than the catastrophe that happened to stocks in the Great Depression, the S&P 500 today would have to rally 17%.
Which it ain't doin' (S&P500 up 0.83). Read the whole thing.

UPDATE; Original post said "DJIA down 97 and change." I needed a browser refresh. ThreeSources apologizes for the error.

Economics and Markets Posted by John Kranz at March 6, 2009 4:14 PM

Fascinating graph. But I think there are some errors.

I read "-56.4% loss to date" and "-49.0% loss in the Depression, to this day." The index is then only 7.4% below the Depression pace, not 17%. right?

And how can the loss "since stimulus enacted" be larger than the loss "since Obama inauguration" since it didn't go up in the interim? I think those two numbers may be reversed.

Again though, fascinating perspective. Democrats will tell you it was down 50% before Obama had a chance to start "fixing" it. And 40% before he was even elected. But save the banking crisis in Sept-Oct the loss is a series of steep declines every time Obama got his way with something. Perhaps it would be good for America if he failed once in a while.

Posted by: johngalt at March 7, 2009 11:37 AM | What do you think? [1]