patrick.net

OK,

The debate (or discussion really, since we are coming to the same conclusion) between my wife and I, is whether or not the economic landscape has bottomed, or if this is simply a "bear market" bounce (I'd call it a "dead-cat" bounce, but she likes her cats ;) )

Anyhow, I have been comparing data from the Stock Market during the great depression with today's data. Here is it is:

1920's-1930's.

Dow before run-up: 63.9
Dow at peak: 381.17
Dow at 1st bottom: 198.69
Dow at "1st recovery": 294.07

Today

Dow before run-up: 7891.08
Dow at peak: 13,930.01
Dow at 1st bottom: 7,062.93
Dow at "1st recovery": 10,062.94

What's interesting is when you compare the percentage change (1920-30's vs. today):

before run-up to peak: 469.5% vs. 76.5%
peak to 1st bottom: -47.8% vs. -49.3%
1st bottom to 1st recovery: 48.0% vs. 42.5%

What does it all mean... probably nothing, its too early to tell, but it's kind of eerie to think that in the current economic cycle we are in, the Dow dropped further, and did not bounce back as strongly, when compared to the first part of what became the great depression, but then again, the rise in the Dow in the 1920's was far more pronounced.

Source Data can be found here:
http://stockcharts.com/charts/historical/djia19201940.html
http://stockcharts.com/charts/historical/djia2000.html

The more I look at the "on the ground observations" - long time business going under, commercial buildings sitting vacant, houses sitting vacant, apartment complexes, formerly with waiting lists, now with vacancies... it doesn't feel like things have started to recover yet, and I can't help but draw the conclusion that another turn for the worse is probable. Not certain, but probable.