Monday, February 02, 2009

Bear markets and has generated a couple of interesting graphs regarding bear markets. This one shows market decline (as a percent from the peak it has just passed) over the course of months:

A second is this one:
This one plots market movement since the 1950s. Click on the blue bands (labeled with year ranges) to see detailed info about each bear market. (The good news here, though not really news, is that the performance of the market over time follows an exponential regression line.)

The site doesn't try to predict what's next for our markets, but it certainly provides some perspective.

[Update: Here is a better post on explaining the second graph.]


Scooter said...

As to the first chart, I wonder what that Tech Bust of 20 months would have been had 9/11 not occurred.

We’re all getting shellacked now with Depression History….from the right’s perspective, Hoover started all the bad policy and FDR doubled down (echoing, I fear, what is going on today with Bush and Obama). From the left’s, FDR pulled back on spending too soon.

Stephanie said...

This may be obvious, but in case not: To see the "blue bands" mentioned in my post, you have to go to the linked site (i.e. they're not in the graphic I posted).

Of course, we can't know how things would have been different had it not been for FDR's spending. Nor will we ever know what would have happened in the absence of the upcoming stimulus bill. This is the political problem with passing the stimulus: it's going to get worse before it gets better and maybe much worse in spite of a stimulus bill. So there will be plenty of claims that the stimulus didn't do anything to help. There may even be claims that the stimulus bill made it worse. But we'll never have anything to compare it to, so we won't know, though both sides will make their arguments that it did or did not help.