Could history repeat again in January, 2010?
By Daniel at 4 January, 2010, 3:43 pm
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History : In the 694 days between 11 January 1973 and 6 December 1974, the New York Stock Exchange’s Dow Jones Industrial Average benchmark lost over 45% of its value, making it the seventh-worst bear market in the history of the index. 1972 had been a good year for the DJIA, with gains of 15% in the twelve months. 1973 had been expected to be even better, with Time magazine reporting, just 3 days before the crash began, that it was ’shaping up as a gilt-edged year’. In the two years from 1972 to 1974, the American economy slowed from 7.2% real GDP growth to -2.1% contraction, while inflation (by CPI) jumped from 3.4% in 1972 to 12.3% in 1974.
Worse was the effect in the United Kingdom, and particularly on the London Stock Exchange’s FT 30, which lost 73% of its value during the crash.[ From a position of 5.1% real GDP growth in 1972, the UK went into recession in 1974, with GDP falling by 1.1%.At the time, the UK’s property market was going through a major crisis, and a secondary banking crisis forced the Bank of England to bail out a number of lenders.
The situation is now worst. One week more rally ?
- doubledutch
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