445 days after the collapse of Lehman Brothers and the launch of the current financial crisis, it is tempting to think that we may be through the worst of it. Unfortunately, these thoughts were prevalent among sufferers of the Great Depression on January 16, 1931--445 days after Black Monday tolled the beginning of that downturn--but they had a rocky road still ahead. The Dow wouldn't hit bottom until July 8, 1932. In the event that our current crisis follows a similar pattern, our nadir would occur on May 27, 2011.
On Friday, January 16, 1931, 445 days after the beginning of the Great Crash, the Dow was up 2.12 points. At 164.94, it was well below its September, 1929 peak of 381.17 but had almost 124 points yet to fall before finally reaching its lowest point in July, 1932. News, too, was grim: employment had dropped by 1 percent, which the Bureau of Labor Statistics chalked up to winter weather and end-of-year inventory-taking. Construction was down 17 percent, with contractors predicting that the worst was still to come. In an all-too-familiar finale, newsprint production had plummeted as well.
On Friday, December 4, 2009, 445 days after the beginning of the current financial crisis, the Dow is up 21.99 points. Signs of optimism returned after news that the unemployment rate had, for the first time since July, dropped (from 10.2 to 10 percent). The dollar rallied and investors gained confidence, moving away from gold, whose price dropped 4 percent from its all-time high on Thursday. But despite this welcome news, the closing average of 10,388.07 remains 3,776 points below its October 9, 2007 peak--and, if we're looking to the earlier Crash for a potential parallel, we remain a dizzying 539 days from the bottom.
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(This feature is from a new business-oriented website to be produced by Atlantic Media and to debut in March.)
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