My financial career began in the mid to late 80’s, and while there were distant memories of the 70’s bear market pretty quickly 1987 became the defining market event for the next decade and a half until eclipsed in some markets by the dot-com slump. In the past year the comparisons have shifted steadily backwards to ‘worst since WWII’ which is a euphemism for ‘worst since the Depression’ because other than the job losses from military decommissioning economic growth was pretty strong as the US had the only intact industrial economy.
Now we’re getting truly historical data points like the following:
Reuters: Commodities in 2008 posted their worst performance in history, despite a good first half. U.S. loan issuance in 2008 tumbled 55 percent to $764 billion, the lowest volume since 1994. U.S. factory activity fell to a 28-year low in December.
Economist: America’s stockmarkets suffered their second-worst year since 1825(!).
Faber: $30 trillion was lost in stock exchanges globally in 2008.
Bloomberg: Banks owned a record $11.5 billion of repossessed homes in the U.S. at the end of the third quarter. Foreclosures accounted for almost half of all U.S. purchases in November.
Telegraph: UK manufacturing activity slumped at its fastest annual pace in 28 years in November. Yields on 10-year US Treasuries have fallen to 2.4pc – a level that was unseen even in the Great Depression and only once since 1790.
Automotive News: GM’s 2008 U.S. sales of 2.95 million light vehicles were its fewest in 49 years, and Ford’s tally sagged to a 47- year low.
FT: Mutual funds recorded a net $320 billion outflow in 2008. But in December, investors put a net $23 billion into equity funds and withdrew only $3.5 billion from bond funds.
NYT: Banks are hoarding cash, with the amount being held by financial institutions at more than $1 trillion, three times the figure only three months ago.
WaPo: The deal volume for mergers and acquisitions in 2008 was down 29% from a record-high in 2007.
OECD: The failure of the U.S. and European governments to remove bad loans from banks before they are recapitalized may prolong the financial crisis.
Gallup: 35 percent of Americans think that a “depression” is very likely, and another 39 percent think it’s at least somewhat likely… And the latest trade at Intrade just put the chances of a depression – a 10 percent decline in GDP over four consecutive quarters – occurring at some point in 2009 at 40 percent.
So my kids, and their kids, will hopefully be saying “the worst since 2008″ for a long, long time.
Whoops, make that 2009:
CBO projects a federal deficit of $1.2 trillion in fiscal 2009, 8.3 percent of gross domestic product, the biggest share of GDP ever with the exception of the periods during the two world wars.