Dow Jones decline rate mimics Great Depression
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.
RBC's equity strategist Dow said he believes distinctions exist between the current market malaise and that of yesteryear.
"There is an opportunity for a globally orchestrated recovery," Dow said. "This won't be the end of capitalism. At some point we'll reach the bottom in the housing market, people will start buying cars again, and inventories will be rebuilt."
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
let's get real here: the only change that you're going to be believing in is a continued loss of privacy, increase in government and continued attack on the family.
as to finances, the "change we can believe in" comes from markets adjusting for the BS. that we've been fed and correcting the massive manipulation of markets which comes with the whole greed/fear thing. it has happened numerous times before and it'll happen again when people have forgotten.
if you haven't already, sell your Hummers and wait for the bottom (that's when everyone caves in and believes it's just going to keep dropping). You can still make plenty of dough on the downside though. and if you really want to cash in, buy some good miners, buy oil and that block of land/house that some poor guy has had to sell for a tenth of it's peak price and wait.
But of course, the next level of relatively flat prices goes back to Feb-Sept 1996 when the DJI stayed within 8% (5346 and 5778). So the news can get a lot worse. ;)
Stop thinking this way people. Start thinking like people.
Next you'll be blaming him for the *coming* collapse of the fiat money system (you know the stuff they print when they don't have any real stuff). Well he's just writing cheques (checks) because he, like all the other guys who have contributed to this mess don't know what else to do - so they're doing exactly what they shouldn't be doing, which is exactly what you should be expecting of politicians (...and besides, it's the general consensus, and politicians don't go against consensus, even though consensus is another word for "the wrong decision made by a group of people who sound like they know what they're talking about but really don't). It's what makes watching them so much fun - they just need a bit more prayer that's all, and maybe they would make a few more decisions which aren't self-serving.
Not trying to pick on you buddy, but I think you're analysis of the situation needs to be a bit deeper than this.
"There is an opportunity for a globally orchestrated recovery," Dow said. "This won't be the end of capitalism. At some point we'll reach the bottom in the housing market, people will start buying cars again and inventories will be rebuilt."
the only thing is, after the great depression, we still had yet to discover the massive oil fields that we have now produced over 50% of.... less fuel to burn = less supply... and economic recovery = greater demand.... we are in for a serious re-adjustment this time around.
Do one simple search on google for "peak oil" and you will understand where these thoughts are coming from.
you might want to re-evaluate a few things and stop discounting things that you have little knowledge about. if you want some "change you can believe in" maybe start looking at the things which you've "blown off" before. might take a little bit of humility and introspection though. the answers are not in the numbers though, they just are representative.
[technical analysis] != [numerology]
{probabilities based on historical cycles of human activity (does not equal) prediction of the future using numbers}
but you don't seem to see the distinction. numerology IS a waste of time. numbers aren't - this universe runs on math formulas. seeming chaos but all rooted in order nevertheless.
as I said, don't discount what you don't understand.
personal note: good to see you putting your money where your mouth is - impressive. as they say, talk is cheep (or is that cheap).
Throwing keywords like "chaos theory" and "universe runs on numbers" isn't the same thing as proving a point. Drawing conclusions based solely on numbers is a waste of time. It's a bear market, get used to it, at least until the administration changes its tune or actually does something worthwhile (unlikely).
But my point stands - maybe not so much directed to you, as just a general comment: two things that bug me, is
(1) people believing that their generation has all the answers to God, the Universe and everything (the answer of course, which those among us who are enlightened enough know, is 42) - I wonder, in the next couple of hundred years, who and what will have replaced Darwin's *theory* of evolution as the 'truth of the moment' , and
(2) people spouting on about human's getting better, gooder (sorry 'bout the grammar), wiser, smarter, hairier {ok so I'm follicly-challenged}. Sorry, but in general the human race remains the same. The Sumerians probably knew more than we do about how everything works - we still don't know stuff that they did, but human nature remains the same, and we still all see the world and other realms 'as through a glass darkly' (simply put, like teenagers, we think we know everything, but we don't have a clue).
(3) and a bonus one... and the point I was trying to make before. we expect everything to remain the same, until it changes. humans, by nature don't want to change, don't like to change, and tend to strongly resist it, often to their own serious detriment. we love holding onto stuff, even if it's killing us or stopping us from being who and what we're meant to be. we therefore don't look for, or welcome the unexpected, and have a mindset that get's surprised by it, even though the unexpected happens around us all the time - recently we've had a taste, but there's are a few unexpected happenings that are going to shock the pants off people not too far away. both natural and man-made occurrences. eg. (a) I wouldn't be owning too much property in LA, nor beach front property anywhere and (b) if you've got children I'd suggest you edumacate them on their WW1 and WW2 history, because with all this talk about peace it's giving me a real funny feeling.
(1) "Having all the answers" isn't necessary to get the US out of a recession. Low taxes, and restoration of confidence in the financial sectors are.
(2) Sumerians knew squat. Their achievements are limited to building giant staircases to nowhere (zigurrats)that did nothing other than keep astrologers in a dominant position.
(3) I personally like change. I've changed careers twice, move every few years. Oh and don't get me started on the floozies.
Now I have a bonus for you...deep breaths 5, 4, 3, 2, 1. The world isn't coming to an end, regardless of what the "analysis" of the article states, but you should feel free to believe whatever you want. Ciao.
The demise of the world has been predicted far too many times throughout history, especially within the first centuries following Christianity's birth. Every time a great fear swept through the population in which normal time stopped only later to be exposed as a fallacy after predictions failed to materialize. Unfortunately, little is ever learned from these movements allowing them to recur at a later point in time, probably because we're all so embarrassed by our gullibility.
Regardless, no one knows exactly what will happen ... this is one of those periods in history when life appears unpredictable and we must step back into reality and see modern society as the safety net, which sadly cannot always support us, but has done a consistent job for some time now. When it fails we must and will deal with reality just as we have for thousands of years.
and what's the point of this comment? That Christianity is wrong and has always led us astray?, but 'modern society' a.k.a. 'trusting in our own strength', while not perfect has consistently 'been there for us'? What a load of BS.
While it is true that no-one knows exactly what will happen, let me give you another version, less fatalistic and more rooted in truth.
History is a good signpost to the future. Humans as a group, don't change, have been and are driven by the same things from the beginning until the end. We can see patterns repeat. And this pattern is very similar to the Depression. And this Greater Depression we are entering can be charted accordingly.
In periods like this some turn to sleflessness and community-mindedness, and others remain selfish. In times of desperation Christians have always been the predominant group to selflessly aid and assist those in need - it is a historical fact that during times of crisis Christians have given, done and sacrificed more for the good of their neighbour - it is a fundamental tenet of their faith.
Even Athiests such as Niall Ferguson, professor of history at Harvard University, recognise that Christianity is good for 'social cohesion' (so he sends his kids to a Christian school), and Atheistic libertarian, Walter Block, argues that Christianity has been the strongest foe to murderous statist tyranny. (Which is the point - that's what you have signed yourselves for with King Obama - ironic that a black president that promotes these death issues - if not just the unborn, but other 'less desirables' in society, according to the eugenics (a US idea which the Nazis made a nationalised policy.)
Back in 1899 James Dennis wrote "Christian Missions and Social Progress" (1200+ pages). In it he said: ?Missionary effort has a sociological sphere to fill as well as an evangelistic. It has necessarily to come into contact with corrupt social customs, non-Christian practices, barbaric ideals, and a complex heathen environment. . . . It therefore becomes clear that the mission of Christianity is to transform and elevate man, as well in his associate relationships as in his individual life..."
More recently has been the monumental work of Yale historian Kenneth Scott Latourette (1884-1968). He wrote extensively on the history and spread of Christianity around the world, and on its social impact. He makes it perfectly clear that Christianity has had a tremendous social, intellectual, political, cultural, educational and artistic impact wherever it was spread.
All this is simply the matter of historical record. Yet when one encounters the works of the new atheists, a completely different picture is presented. Dawkins, Harris, Hitchens et. al., want to convince us that religion in general and Christianity in particular are utterly harmful and disadvantageous.
However there are some that aren't so quick to ignore centuries of documented evidence about the benefits of Christianity during social devastation. One such atheist is Matthew Parris. Writing in the Timesonline last December, his piece began with the provocative title, ?As an atheist, I truly believe Africa needs God?.
He writes ?It inspired me, renewing my flagging faith in development charities. But travelling in Malawi refreshed another belief, too: one I?ve been trying to banish all my life, but an observation I?ve been unable to avoid since my African childhood. It confounds my ideological beliefs, stubbornly refuses to fit my world view, and has embarrassed my growing belief that there is no God. Now a confirmed atheist, I?ve become convinced of the enormous contribution that Christian evangelism makes in Africa: sharply distinct from the work of secular NGOs...?
He realises that this is not just about doing good works, but the faith which lies behind the charitable deeds and
he reminisces... "The Christians were always different. Far from having cowed or confined its converts, their faith appeared to have liberated and relaxed them. There was a liveliness, a curiosity, an engagement with the world - a directness in their dealings with others - that seemed to be missing in traditional African life. They stood tall.?
So... while I could go on, you get the gist.
It's actually during times like this that the fabric of 'modern society' comes undone. Not saving us but failing us. And it's times like these that your best friend can be a Christian who genuinely cares for you.
Now, about what lies ahead. Struggle yes, but through it all comes an opportunity to return from a focus on oneself, on greed and materialistic and hedonistic pursuits, to the things that matter. Faith, family, friends, fun and fulfilling lives, not empty, full of ambition and greed and lust.
If you have any doubts about this why don't you pop over to www.billmuehlenberg.com and check it out for yourself.
Then to open SBA loans to the 100,000?s of people who can provide a business plan that shows how they will make money and what you will reinvest that money to grow our country.
This will create a confident consumer and even jobs. I just wonder why they don?t try and don?t listen to the common man. DELL and MICRSOFT were small business that are now today?s leaders. We need more SBA loans NOW! And the small business owners will carry us out of this mess and history will call us the Best Generation!
- by wolfie11709 March 5, 2009 1:39 PM PST
- What ever happened to banks offering 7% interest on savings accounts? Then, seems we went to CDs, then so many decided to play the stock market. Well, just how low can the Dow go? What can we do to help our economy, as the little folks? How about, trying to buy from local retailers a wee bit more?, buy "Made in America" items, if they can be found. The creation of solar and wind power infrastructure, green housing, will help create American jobs, have faith. These are the industries of the future, that can not be outsourced! The big companies failing, will allow the smaller companies to bloom. Yes, all know of the greed and graft of the powerful "Good Ole Boys", and their cronies, the handwriting is on the wall, the internet has made damaging information available to all around the world. We will all need to learn to live more sustainably, gently, and efficiently. The media has infested our morals with laziness and unrealistic, shallow desires. Have we become so numbed and bored to life that we live through reality shows? Do kids ride their bikes after school, or wander aimlessly through the alleys of Facebook, YouTube, etc.? Who knows, maybe dropping by the neighbors for a cup of coffee, will become more fashionable, instead of hiding in our homes on the internet 24/7.
- Like this Reply to this comment
-
(31 Comments)