It's readily apparent to most people that we're not simply having national economic woes -- we're in the grips of a financial depression. Almost all of the economic indicators are there -- rising unemployment, falling consumer spending, depressed housing sales, and a Dow Jones Industrial Average that is sinking like a heavy rock in a mill pond.
Despite all this, the mainstream media and politicos seem to be having a very difficult time enunciating the word d-e-p-r-e-s-s-i-o-n.
So, I was more than a bit surprised to read the following headline and article from CNET News:
Despite all this, the mainstream media and politicos seem to be having a very difficult time enunciating the word d-e-p-r-e-s-s-i-o-n.
So, I was more than a bit surprised to read the following headline and article from CNET News:
Dow Jones decline rate mimics Great Depression
by Dawn Kawamoto
With the Dow Jones Industrial Average falling below the psychological watermark of 7,000 on Monday, investors may be wondering how it all stacks up against the stock market crash of the Great Depression.
It's not looking good.
In the here and now, the Dow has dropped 52.5 percent since its high of 14,279.96 on Oct. 11, 2007, to its low point of 6,779.62 during intraday trading on Monday. (Update 1:16 p.m. PST: At Monday's close it was 6,763.29, a drop of nearly 300 points from the previous close.)
And in taking a similar period of a year and five months in the late 1920s, it's a case of deja vu.
The rate of decline is mimicking that of the Dow during the Great Depression.
Back on September 3, 1929, the Dow hit a high mark of 381.17. And over a similar length of time, it fell 54.7 percent to 172.36 on January 2, 1931.
"It's very troubling if you have a mirror image," said Phil Dow, market strategist for RBC Dain Rauscher & James.
Helping to drive the Dow lower on Monday were tech titans IBM, which dropped 3.17 percent to $89.10 a share, and Hewlett-Packard which fell 3.72 percent to $27.96. Intel gave up 2.43 percent to $12.43 a share, while Microsoft gave up 1.80 percent to fall to $15.86 a share during intraday trading.
If the Dow continues to follow the rate of decline that it endured during the Great Depression, investors would have another year and four months before hitting rock bottom. Back in July 1932, the Dow fell 89 percent to 42.22 from its high...
I have often wondered what it was that made people jump out of skyscraper windows in 1929/30.
ReplyDeleteDid they all suddenly forget about the existence of elevators?
Subjective reality - based on illusion - can suddenly come crashing down, leading to widespread panic.
That alone is a good reason to seek out reality and thereby discover what can not suddenly self-destruct.
After eight years of exponential growth our family business is very close to going under. It's hitting everywhere and it's hitting hard.
ReplyDeleteIt's times like this when I have gratitude I didn't inherit the worry gene. It is what it is, even when you don't know what it is...
Crow,
ReplyDeleteA person's reality -- illusion or not -- is so often the rudder of self-identity. When the rudder goes astray, the self-identity goes with it. Hence, some people jump; others watch.
Val,
I'm so very sorry to hear this. While we all watch the economic indicators fall with an almost morbid fascination, the real story is the human toll on people and their families.
So many small business owners have committed their lives to build a fair and just service or product, then something far beyond their control yanks the rug out from under their feet!
I hope your family business can hang on and weather this storm of storms.