Kiplinger's: Stocks and Recessions - Historical Data

Kiplinger's Magazine gave some interesting figures about the past 10 recessions here in America.

In 9 of the past 10 recessionary periods, stocks bottomed about halfway through the actual economic downturns. The only exception was in October 2002, when shares hit their lows nearly one year after the 2001 recession officially ended. The September 11, 2001 terrorist attacks may have made the difference in the timing of market action in that instance.

Here are the numbers:

Average duration of the 10 recessions was 10.4 months.

Comments

[Blair:]

One cannot argue against the above posted data.

However, one can ask whether things are sufficiently different today (a kin - black swan) that one should take the above with as a grain of salt.

The whole profound change in the availability of easy to get and low interest is the big issue. Just because the fed rates are low, it doesn't mean that one can borrow money without trouble.

The whole credit market doesn't make any sense. It is desired to get the housing market off of the floor. However, with the low interest rates that a retail customer can get, which doesn't even cover inflation let alone taxes, means that it will be very difficult to get new retail buyers into buying the homes -- unless the prices drop to unimaginable low prices.

2008 Jul 04 02:22 AM