Dow Crashes 2,000 Points in Record Day! The Bear is at the Door.

The Great Recession

Today was the greatest crash in Wall Street history by one measure, and took down many other milestones. The Dow plunged 2,012 points in its largest single-session drop on record! Percentage-wise it was down 7.8%, which still knocked out decades of lows, leading to “Black Monday” being the hot search term on Google today as people sought a comparison worthy of this Monday crash. 

For comparison, the 1929 event looked like this:

The stock market crash of 1929 – considered the worst economic event in world history – began on Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares. On October 28, dubbed “Black Monday,” the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, “Black Tuesday.” While the crisis send shock waves across the financial world, there were numerous signs that a stock market crash was coming.

The times leading up to that crash sound like the past year:

After 1922, the stock market had increased by nearly 20 percent each year until 1929…. People bought stocks with easy credit. During the 1920s, there was a rapid growth in bank credit and easily acquired loans. People encouraged by the market’s stability were unafraid of debt.

The bear is at the door

The total percentage drop in just five days in 1929 was 22%, but the Dow was already down 30% from its September 3 high. Today’s market is down 19% in three weeks from its high, but we don’t know how far it has left to fall. Maybe it will get another dead-cat bounce like the last one and will take longer than just tomorrow to go full bear:

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