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December 1, 2009

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Have We Hit Bottom Yet?

Here’s a chart from the Calculated Risk blog (a great read, by the way) showing four bad bear markets.

The gray line is the Great Depression, where the low was 89.2% from the top. Red and green are more recent (1973 oil crisis and 2000 dotcom bust) where the lows were about 50% before they turned around.

The blue line is this economic downturn today. Was 56.8% the low? Or are we headed for a double dip? (Similar to the one you’ll note on the Great Depression graph line.)

Time will tell. I sincerely hope the recovery has truly begun, but it’s still going to be a jobless (and translation to governments: “tax revenue-less”) recovery for a long time.

Do you think the economy has hit bottom yet? Or is there more to come? Use the comments below to share your opinion.

Read more from Business, Fiscal Sustainability, Sierra College
  • Zachary Madison

    Aaron,

    With regards to this, the fundamentals are terrible. This market is a bulltrap. The engine driving the upward trending dead cat bounce is funded by government debt.

    There can be no real recovery without real jobs. Real jobs require real productivity. When you so those things there will be a recovery.

    I'm only hoping that places like Sierra college will be able to help turn out citizens who are productive.

    I for one would like to see the manufacturing base come back in this country. I think that is the only way to restore the type of productivity this nation needs.

  • http://www.aaronklein.com aaronklein

    Great post. I'm unconvinced that we're either in a real recovery or a dead cat bounce. I think the American economy is resilient enough that we could have somewhat of a weak recovery in spite of (not because) the debt-driven spending binge we're currently on. There's a very distinct possibility you are correct though.

    And boy are you ever right about productivity and the manufacturing base.

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