Yea, the DJIA plunged 777.68 points yesterday, which is the biggest point decline in history. The 2nd biggest point decline was on September 17, 2001 (first trading day after 9/11) that had a 684.81 decline. The DJIA gained 485.21 points today recoving almost two-thirds of the lost from yesterday. However, point drops are irrelevant. What really matters is the percentage drops.
Amazingly, from the real perspective of things it is not nearly as bad as Bush, Paulson, and the Federal Reserve would lead you to believe. Before these idiots take credit for today’s rise of the DJIA for their persistance about getting a bailout passed, let’s set the record straight. The Great Depression market crash in October 1929, the plunge in October 1987, and the decline in September 2001 (after 9/11) are all worst than what happened yesterday, and they all had some sort of a bounce back!
The DJIA gained 12.34% on October 30, 1929, the day following the Great Depression crash.
The DJIA gained 16.63% the two days following October 19, 1987 crash.
The DJIA gained over 368 points in one day only a week after September 17, 2001.
The DJA gained over 485 points the very next day after the September 29, 2008 crash!
(This the the 3rd largest point increase ever!)
Despite the fact that the stock market typically has large decreases during the months of September, October, and November. What happened yesterday is not outside the norm over the past 80 years. In fact, it is nowhere close the dire armegeddon economic condition that the liberals in Congress (and the liberal President Bush) would have the American people believe. In comparison to the stock market crash of October 1929 (the Great Depression), and the plunge in October 1987, we are currently no where close to those conditions.
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The DJIA has lost 20.9% of its value in the past 7 trading sessions. Largest 7 day point decline in history. This almost rivals the 1987 crash with respect to percent. (The 1987 crash selling off 22.6%, while recovering half of it that same week). Yesterday alone 7.3% was lost – 11th worst percent decline in history, at 679 points – 3rd worst point loss in history. Since exactly one year ago, 10/9/07, the DJIA has lost 5,585 points at 39.4%. This is a greater percentage loss than the stock market crash of 1929. In addition, the Nasdaq and S&P 500 have lost 42.5% and 41.9% of their value, respectively in the last year.
Frank:
Here’s a few points to consider:
1) The article was written at the end of September, and thus does not include data for October.
2) You are not taking in consideration inflation when doing your comparisons.
3) The October 1987 crash did recover half of it that same week, but then lost most all of what it recovered a few days later.
4) You are incorrect that this is worst than the market crash during the Great Depression. Since you want to use nominal figures that have not been adjusted for inflation, let’s take a look at the actual data:
09/03/1929 – DJIA at 381.17 (the high)
07/08/1932 – DJIA at 41.22 (the low)
There is an 89.19% drop.
10/09/2007 – DJIA at 14164.53 (the high)
10/09/2008 – DJIA at 8579.19 (the low … so far)
There is only a 39.43% drop.
5) When adjusted for inflation, the DJIA has about 1.64% increase per year. It is currently EXTREMELY overpriced, and based on the historical market curve should be at about 7,000 as noted at http://www.itulip.com/realdow.htm and http://www.itulip.com/realdow.htm
When it does get back to the level where it should be, this is only a 50% decline as opposed to a 90% decline with the Great Depression.