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Last week, the market almost crashed. Almost, but not quite - because by common definition a market crash is a 20% decline in a single day or several days. Last week, the Dow fell 18.2% or 1,874.19 points, making it the worst week in market history (prior to last week, the largest weekly percentage drop was the week ending July 22, 1933 when it fell 17%).
We saw a brief rebound, when history was made again. Monday, the Dow rose 936 points, the largest single day gain in market history.
But let’s not forget our past. After the market crashed in 1929, it took twenty five years for it to return to its pre-crash peak of 381.17 (late 1954). But this is not 1929. We have stronger governmental agencies to help fix the mess (the Fed has more power, the FDIC provides deposit insurance). We are coming down from an all time high (14,164.53 a year ago). We acted fast and have allocated over $1 trillion $2.25 trillion (of our tax dollars) to fix this up. Despite these differences, however, history may not bode well for us.
