Current Financial Crisis and The Great Depression

(Taken in entirety from Seekingalpha.com






Today marks the one year anniversary of the all-time closing high set in the Dow Jones Industrial Average. On October 9th, 2007, the DJIA set an Intra-day high of 14279.96. One year later, we are off 35.8% (as of midday Thursday). Since this current situation is currently being compared to the Great Depression, let's do some comparisons...

On September 3rd, 1929, the DJIA reached a record intra-day high of 386.1. One year later, September 3rd, 1930, it had fallen 38.5% Notice how closely that parallels the current crisis.

So looking at the current level of the Dow, are you ready to jump in at these bargain-basement levels? Before you act, let's look at what happened in years two and three of the Great Depression. Suppose you jumped into the market in September of 1930 thinking you were looking at similar bargains...


By September 3rd, 1931, the Dow had fallen 65.5% from its peak just two years before.

On July 8th, 1932, the Dow had an intra-day low of 40.56, or 89.5% off its peak in less than three years.

So the next logical question is, how long did it take to recover back to the peak of 386.1? Are you ready for this?

November 26th, 1954...a full 25 years after the peak set in 1929.


Seeing how the first year of the current crisis is trading on par with the first year of the Great Depression, one could draw the conclusion that we may not see Dow 14K again until 2032.