Dow Watch 2/19/2009 - Closed 7,465.95

[Veritas_et_Aequitas]

The Dow has lost about 48.3% of its total value since this whole thing began, meaning we are now in the fourth worse bear market in US history (in terms of loss), replacing the 1929 crash that kick started the Great Depression.

Remaining "Doom Markers"

1907 - 1908 Panic - 48.5% of value lost
1937 - 1938 crash - 58% of value lost (not cumulative with rest of GD)
1930 - 1932 crash - 86% of value lost (not including the 1929 crash)

[liberal N proud]

1. 4th worst in percentage, what about cash value?

I suspect it is much bigger, but then maybe that would be comparing apples to oranges.

[Veritas_et_Aequitas]

3. I don't have the cash value figures in front of me.

I do have the point values though:

Date Started 09/03/1929
Date Ended 11/13/1929
Total Days 71
Starting DJIA 381.17
Ending DJIA: 198.69
Total Loss -47.9%

To be honest, I have a lot of these values because my dad's involved in retirement planning and he gave a presentation to his sales reps back in December to calm their nerves.

[Warpy]

2. I fully expect it to crash through 4000 before it's done

and if Congress isn't frightened into doing the right things for this country, I fully expect it to be in the 1000 territory with the IMF basically running our banking industry.

[wuvuj]

4. Here's the picture...

http://dshort.com/charts/bear-markets.html?four-bears

[GoesTo11]

5. We have lost about 15 years.

Depends on the index. We're back in 1997 territory on DJIA, earlier for S&P and NASDAQ, just above 1990 close for some Times Straits and sometime in the early 80's for Japan. Knock everything back a few more years to account for inflation. That's basically a generation.

It doesn't make sense to me that the whole world is worth as much as it was 15 years ago. A lot of things have really gotten better - in terms of productivity and technology, etc. All the infrastructure built since then, much more of the world is modernized, the internet, wireless, cell phones, the powerful computing of today. There are small wars, but there are no big active wars going on that wipe out economic production. Yes, there's things we really have to worry about for the future - oil and climate change - but they shouldn't be driving the market to where it is now, not yet (oil < $40/barrel now).

Is it all because of the hole in the balance sheet caused by all the bad loans at banks, subtracted off the top of everything? That would be a whole generation's growth in world wealth? And the bad loans are a wash anyway - someone got the loans. So is it just that an entire generation of wealth creation has been skimmed off the top by a few big shots who put it all into yachts, jets and mansions?

I don't get it.

[wuvuj]

6. Headed for a new low?

" The S&P has never in history reported negative earnings for a quarter."

http://www.decisionpoint.com/ChartSpotliteFiles/090213_earn.html

[GoesTo11]

7. Wow.

Thanks Bush.

So if S&P earnings go negative and we still have a PE ratio of 10, will the index go to -300?

Depressing.