Wednesday, October 8, 2008

Almost as bad as the Crash of '29

This chart, courtesy of Wikipedia, shows the Dow's initial fall from grace at the start of the Great Depression. From its high on Sept. 3 to Nov. 13, the Dow fell 48%. That's a bit more than the 35% decline in the Dow since its high last October, but not a great deal more. The total loss from '29 to the eventual bottom in '32 was 90%. Very hard to believe we're in store for a collapse of that magnitude. Back then the Fed was way too tight, and now they are undeniably easy. That's a huge difference.

Hat tip: Mike Churchill

UPDATE: Today, Oct. 9th, the Dow has fallen 39% from its high year ago. We're closing in on the pre-Depression collapse.

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