It's Official - This is Now the Worst Market Crash on Record

At one point today, the Dow traded less than half of its value of May 2, 2008.

At one point today, the Dow traded at less than half of its value on May 2, 2008.  That's a 50% fall in just over 10 months.

This crash is only rivaled by 1929 and the NASDAQ crash earlier in the decade.  But, this is the worst because of the trajectory, the magnitude and the breadth.

During the Great Depression of 1929, the stock market fell substantially and quickly from its September 3, 1929 peak of 381 to its November 13, 1929 intermediate bottom just under 200.  But, it bounced back to almost 300, before beginning an incremental slid that would take it down as much as 89% by July 1932.  However, at no point was the Dow ever down more than 50% in a 12 month period.  Not only is the trajectory today worse, but the breadth is worse - Americans in 2007 and early 2008 were all heavily exposed to the stock market, having been taught to believe that nothing like the Great Depression would ever happen again and that we needed to stay in the market to secure our retirements and our futures.

The NASDAQ crash of 2000-2002 brought the NASDAQ down more than 50% from March 2000 to December 2000, and ultimately down over 70% to its July 2002 low.  This crash was particularly painful for those of us who were so heavily invested in technology and the internet, but it wasn't as broad based as the current crash, especially since many folks didn't have much exposure to the technology sector.

The 1907 and 1987 crashes were severe, and markets fell precipitously in both cases over very short periods.  However, in neither case, did they ever fall more than 25%, and in both cases the market had actually recovered almost completely 12 months later in both cases.

Today, this became the worst stock market crash in history. 

Thanks Barack.

Jason Rodgers
Jason Rodgers: Jason Rodgers was an experienced research analyst for a major bank prior to retiring to run his own investment consultancy in beautiful Lihue, Hawaii. Jason contributed articles to BestCashCow from 2008 to 2014.

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Comments

  • cm_icc

    March 07, 2009

    gratuitous politicization?

    if your starting point is may 2008, how is this crash the fault of the president that took office in january 2009?

    and isn't the risk of such a crash inherent in the rewards of such a market. let's not feign victimhood.

  • art_45

    March 08, 2009

    ridiculous blaming obama. i guess he was to blame for revisions in the unemployment rate in dec, jan, and feb. i guess he was to blame for the total failure of the tarp so far.

    the market is going down because we are in the worst global downturn since the great depression. the republican attempt to blame obama is laughable.

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