Posted on 07/08/2009 4:59:11 PM PDT by FromLori
What are the most important and enduring characteristics of the Great Depression? And what should we monitor to determine how severe today’s situation really is?
The stock market will give important clues. But the economy, especially unemployment, defines depressions.
Yes, there was a spectacular stock market crash in 1929. But a stock market crash does not a depression make. Remember 1987? There was a very similar crash … but no depression. Not even a mild recession.
The crash of 1929 proved to be only the prelude to further heavy losses in 1930-1932. After the initial crash from 381 to 199, a huge rally emerged. Prices rose all the way back to 294 for a 48 percent bear market rally. Hence initial losses were roughly cut in half!
The stock market crash on Black Thursday, October 24, 1929, was just the beginning of the carnage to hit Wall Street.
As we all know, this optimism proved to be, well, premature.
Now, let’s fast forward to …
The Bear Market Rally of 2009
After having lost more than 50 percent off its October 2007 high, a huge stock market rally started in March 2009. T
Just as in 1929, this rally led Wall Street and official sources to conjure economic optimism. This is not a coincidence … the stock market and sentiment measures are highly correlated. But rising sentiment does not forecast a betterment of the economy. Instead a rising stock market foregoes rising optimism.
Now it looks like this bear market rally is over …
And if these lows do not stop the slide, a very important message concerning the economy will have been given: “Depression ahead.”
Employment Is Much More Predictive Of Recessions and Depressions Than the Stock Market …
(Excerpt) Read more at marketoracle.co.uk ...
http://blogs.moneycentral.msn.com/topstocks/archive/2009/07/06/true-unemployment-rate-already-at-20.aspx
Only one large city has actually had an INCREASE in traffic—you guessed it,Washington DC (more going to work).
Yes I read a few articles from different areas saying the same thing very sad for our country.
No matter how bad it gets, the MSM will NEVER call it a depression as long as Barry The Kenyan is in office (or any other RATS for that matter). But the moment a Repub is sworn in, on the horror, its a huge Depression we’re all gonna die!!!
Guaranteed.
The GOP’s new bumper sticker should be:
IT’S THE JOBS STUPID.
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