By The Tim on February 11th, 2009 at 6:00 AM · 55 Comments
House Speaker Nancy Pelosi recently posted an alarming chart of job losses that has been making the rounds.
What jumps out to me when I look at her chart is the fact that the y-axis shows raw number of jobs rather than a percentage loss, and therefore fails to account for the increased size of the job pool from one recession to the next. To give you an idea of how misleading this can be, just check out a chart comparing the current Dow Jones crash to the Great Depression, but in raw points rather than as a percentage:
A reader requested that I post a graph similar to the Dow Jones percentage decline crash chart I have published on here a few times, but showing job losses as a percentage loss from the peak. Coincidentally, Calculated Risk posted that exact chart a few days ago. Here it is:
The current rate of job losses is bad, but it doesn’t look quite as alarming when you compare it in a scaled chart.
While we’re at it, here’s an updated edition of the Dow Jones crash chart:
Categories: Statistics
Tags: depression, Dow Jones, Jobs, recession, Stock Market, unemployment
By The Tim on January 16th, 2009 at 11:47 AM · 56 Comments
I thought it would be interesting to post an update on the stock market crash graph that I first posted back in October.
In the chart below I have graphed the crashes of 1929, 1973, 1987, and 2001 alongside the current fall, with the peak points aligned near the left. Each crash is scaled on the y-axis to show the percent of the peak Dow Jones price.
464 days into the crash, the current plunge still ranks second only to 1929. Back in October, we did drop for a brief time to a point lower than the lowest point on the green ’70s graph (45.1% off-peak), but we currently appear to be in a bit of a holding pattern at about 40% off peak.
On a related topic, I spotted this article from late last month that amused me: Market predictions proved to be tricky business
At a small, private event at the Metropolitan Grill in January, nine of the region’s brightest and most respected financial advisers gathered to sip fine wine, eat prime beef and forecast the financial future.
The date was Jan. 10. The Dow Jones industrial average was 12,853. And Washington Mutual was a pillar of the Seattle business scene.
With a quarter-century of such gatherings, the “Guess the Dow” luncheon at the Met has become an annual fat-cat Seattle tradition.
…
Consensus was that Starbucks Corp., Nordstrom Inc. and Microsoft Corp. stocks all would rise, the Dow would close above 14,000 and Hillary Clinton would be president.
Wrong. Wrong. Wrong. Definitely not. And wrong.
This year’s “Guess the Dow” luncheon is today was yesterday. I haven’t heard what their predictions are for 2009, but I have a contact that is attending and will ask him this afternoon will try to find out. Let’s see if the Seattle Bubble readership can collectively beat the “region’s brightest and most respected financial advisers.”
Where will the Dow Jones close for 2009?
- Below 6,000 (17%, 118 Votes)
- 6,000 to < 7,000 (18%, 124 Votes)
- 7,000 to < 8,000 (22%, 156 Votes)
- 8,000 to < 9,000 (20%, 139 Votes)
- 9,000 to < 10,000 (16%, 112 Votes)
- Above 10,000 (7%, 55 Votes)
Total Voters: 704
Categories: Polls · Statistics
Tags: depression, Dow Jones, Polls, recession, Stock Market
By The Tim on October 24th, 2008 at 11:23 AM · 77 Comments
Since the stock market is all over the news again today, I thought it would be interesting to look at some past stock crashes and see how the current one compares.
In the chart below I have graphed the crashes of 1929, 1973, 1987, and 2001 alongside the current fall, with the peak points aligned near the left. Each crash is scaled on the y-axis to show the percent of the peak Dow Jones price.
Click to enlarge
Yesterday’s close was 380 days after the recent 2007 peak in the Dow. Here is the total drop 380 days after peak for each crash above:
1929: 38.6%
1973: 18.3%
1987: 24.2%
2001: 13.6%
2007: 38.6%
Will the current crash play out over the next two years more like 1987 or 1929?
Update: Updated the chart to reflect today’s close. The Dow has now fallen further in the current crash (40.8%) than it did in the same length of time from the peak in 1929 (39.9%).
Categories: Statistics
Tags: depression, Dow Jones, recession, Stock Market
By The Tim on October 6th, 2008 at 8:08 AM · 60 Comments
Anybody remember the June 8 poll:
Do you think the Dow Jones will drop below 10,000 in the next year?
- Yes (42%, 74 Votes)
- No (58%, 101 Votes)
Total Voters: 175
Sorry to say, but 58% of you were wrong:
That took less than 4 months, for those of you keeping score at home. Also note the July 13 follow-up, in which only 30% guessed incorrectly.
I just thought I’d point this out to those that are accusing this site of being “too negative” or all “doom and gloom” lately. Unfortunately, negative news is the reality these days. Better to face it head on than close our eyes, plug our ears, and pretend everything in the short term will just magically work out great.
Categories: News
Tags: Dow Jones, economy, predictions, Stock Market
By The Tim on July 13th, 2008 at 12:05 AM · 28 Comments
Please vote in this poll using the sidebar.
Do you think the Dow will drop below 10,000 in the next 11 months?
- Yes (70%, 110 Votes)
- No (30%, 47 Votes)
Total Voters: 157
This poll will be active and displayed on the sidebar through 07.19.2008.
Categories: Polls
Tags: Dow Jones, economy, Polls, predictions
