Link Information
3
Props
Give Props
Anatomy of a Crash: The current decline in financial stocks is on pace with that of the Dow post 1929, and tech stocks post 2000 (graph)
This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 112 days ago (secondpagemedia.com).  Views: 320
Tags: great depression  economics  housing bubble  credit crisis
Related Tags: finance  wall street  business  video  stocks  politics  stock market  news  
Click here to see the chart. Here is the source.

The chart is one of current conditions in the financial markets vs. other great crashes in our modern financial history - running on a scale of days after the all time high. The purple line is the most recent crash that we have dealt with, the Nasdaq in 2001. It reached a high early that year and would go on to lose more than 75% of its value over the next 650 trading days (note: your average year will have roughly 250 trading days). As portions of its line on the left side of the chart are the furthest down, its decline was the most steep, only being briefly outdone by the 1929 Dow.

Speaking of which, the Dow Jones Industrial Average of 1929 onward is represented by the blue line. It reached its all time high in the middle of 1929, and would go on to lose nearly 90% of its value over the next 700 trading days.

The bold, dark red line is a chart of a stock created to represent a selected industry, in this case a snapshot of the financial industry as represented by the ticker symbol IYF. Its high came in the spring of 2007, almost rising back up to beat its mark that summer, but soon after entering a downward death spiral that has led to losses of more than 45% in less than 400 trading days.

XLF is the ticker symbol of another stock that does what IYF does, but for layman's purposes, is run by a different entity and calculates its price differently than IYF. In the end it is another measure for the financial sector. It is represented on the chart by the bold orange line. Where IYF never overtook its early 2007 high, XLF did, so on the chart its counting starts from the summer of 2007. Its decline, over time, is keeping pace with the speed and severity of the Dow post 1929 - having lost over 50% of its value in under 300 trading days.

The speed at which financials are losing value is staggering, but expected for an industry that made the seemingly fatal mistake of engaging in such a period of irresponsible loaning like there was no tomorrow. It's like the man who thinks he'll be dead in a year so he maxes out all his credit cards, only to find himself quite alive and with creditors haunting him night and day, wishing he was quite dead.

View Original Article

< Prev Item | Next Item >
Comments
ian said
1 year 108 days ago
 
little known mathematical fact

By the way, this is a little known mathematical fact.

For a stock (or index) to go from -50% to -80% from its peak, it has to drop another 60%. To go from -50% to -90%, it has to drop another 80%. Imagine if financial stocks dropped another 60-80% from today's levels!

It makes a lot more sense to plot the above chart on a LOGARITHMIC plot, then you would see just how much more devastating it is to go from -50% to -90% compared to 0 to -50%. If I have time, I will get the same data, put it in Excel, and make a log plot.

Permalink  |  Twitter  |  Reply
 
 
Related Content
72
Props
Give Props
Housing Bubble and Bear Links (1,498 Links)
Created by ian 2 years 208 days ago in Finance. Views: 11,866. Link Views: 391,926
Tags: housing bubble  investing  real estate  subprime  mortgage  finance  economics
Related Tags: wall street  business  stocks  video  politics  consumer issues  credit crisis  
This channel was created on April 10, 2007, during the peak of the housing mania, to warn investors of the coming collapse in home prices. For quite some time we have warned investors to get out of U.S. stocks. This channel represents the best of the [More...]
10
Props
Give Props
Housing decline is 1/3 complete and will not bottom until 2012 or later
This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 1 year 113 days ago (myprops.org).  Views: 2,607
Tags: housing bubble  economics
Related Tags: finance  wall street  business  video  stocks  politics  credit crisis  
Cramer, you're wrong. Housing will not bottom until 2012 or later. So far you have called 3 bottoms in the stock market (one after the Fed cut rates by 125 bp in 8 days, one after the Bear Stearns bailout, and now one after the Housing Bill / SEC naked [More...]
7
Props
Give Props
1929 vs. 2007: Dow Jones decline rate mimics Great Depression
This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 245 days ago (myprops.org).  Views: 5,415
Tags: depression  stock market
Related Tags: economics  credit crisis  investing  finance  economy  wall street  recession  
Dow Jones decline rate mimics Great Depression: March 2, 2009 With the Dow Jones Industrial Average falling below the psychological watermark of 7,000 on Monday, investors may be wondering how it all stacks up against the stock market crash of the [More...]
5
Props
Give Props
Market Value of Household Real Estate (graph)
This Link is located in the Public Channel Housing Bubble and Bear Links.
Posted by ian 2 years 60 days ago (static.seekingalpha.com).  Views: 2,192
Tags: housing bubble
Related Tags: credit crisis  gold  wall street  economics  peter schiff  inflation  banks  
Up about $10 trillion since the start of the bubble in 2000. The entire GDP of the United States is $13 trillion. The housing bubble is therefore many times bigger, in fake wealth created, than the tech stock bubble which ended badly in 2000.
2
Props
Give Props
Graph of historic financial collapses puts current crisis into perspective
This Link is located in the Public Channel reddit homepage.
Posted by MyPropsMonkey 255 days ago (picsorlinks.com).
Views: 55
2
Props
Give Props
Bank insider urges deep rate cuts
This Link is located in the Public Channel BBC News - Most Popular Stories.
Posted by MyPropsMonkey 1 year 4 days ago (news.bbc.co.uk).  Views: 196
Tags: bbc  news
Related Tags: politics  video  election  new york times  la times  celebrity news  
A Bank of England policymaker warns the credit crisis may be worse than the financial crash of 1929.
1
Prop
Give Props
Barney Frank in 2005: What housing bubble? <Video>
This Link is located in the Public Channel reddit business.
Posted by MyPropsMonkey 158 days ago (youtube.com).  Views: 31
Tags: business  economics  finance  wall street
Related Tags: stocks  video  politics  forbes  consumer issues  stock market  credit crisis  
1
Prop
Give Props
MyProps: Reading http://myprops.org/b1c - Housing Bubble and Bear Links
This Link is located in the Private Channel MyProps Twitter Updates.
Posted by ian 158 days ago (myprops.org).
Views: 40
twitter update: MyProps: Reading http://myprops.org/b1c - Housing Bubble and Bear Links
1
Prop
Give Props
Market and GM
This Link is located in the Public Channel Calculated Risk.
Posted by MyPropsMonkey 159 days ago (feedproxy.google.com).  Views: 2
Tags: finance  economics  wall street
Related Tags: business  stocks  video  politics  forbes  consumer issues  stock market  
From the WSJ: Bondholders Push GM to Brink of Bankruptcy General Motors Corp. bondholders soundly rejected a debt-swap offer critical to the auto maker's survival, pushing the company closer to a bankruptcy filing that could come in the next few days. Not [More...]
1
Prop
Give Props
Market Précis
This Link is located in the Public Channel Calculated Risk.
Posted by MyPropsMonkey 166 days ago (feedproxy.google.com).  Views: 5
Tags: finance  economics  wall street
Related Tags: business  stocks  video  politics  forbes  consumer issues  stock market  
By popular demand ... Click on graph for larger image in new window. The first graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears". Note that the Great Depression crash is based on the DOW; the three others are [More...]
1 2 3 4 5 6 7 ... 10 Next Page

©2009 MyProps Inc.  Contact Us - Privacy Policy - Terms of Service