Stock recovery substantial despite slump
Thanks as usual to Doug Short for the great comparison of four terrible bear markets. If you can't read the key, the gray line is stocks after the 1929 crash; the red is the 1970s plunge; and the green is the collpase of the tech bubble after March 2000. The blue is now: The S&P 500 down 30 percent from its peak is better than the S&P 500 down almost 60 percent from its peak.
Comments
None of those other bears got the ZIRP/ABC (zero interest rate policy/anything but cash) treatment this one did. The question to be answered in the coming months is did such policy avoid the inevitable, or only delay it?
Chop the first 12 months off the blue line to reflect the more accurate Sept 08 start date, slide it back and see how it lines up with the grey line.
Posted by: Josh | May 27, 2010 5:33 AM
It's not new. The US market has been living off of Japan's ZIRP policy for many years.
Posted by: Les | May 29, 2010 9:41 PM
The global recession is abating and the financial markets are on the way to recovery thanks to far-reaching interventional measures. Packages to stimulate the economy are also boosting demand in the real economy across the globe. Additional growth impulses for the global economy are also emanating from increases in stock levels and production capacity that had been heavily scaled back in anticipation of a prolonged recession or due to financing difficulties. Some economies, in particular export markets of importance to Switzerland such as Germany and France, have already returned to a moderate growth path.
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Historical Stock
Posted by: Historical Stock | August 5, 2010 12:36 PM