Will The Economy Get Worse?

Is the stock market now as bad as it was during The Great Depression Era? What is the comparison? Just how bad has the market taken a nosedive? How bad is is the economy going to get?

Dow’s Worst Years Since 1900
1. 1931, down 53%
2. 1907, down 38%
3. 2008, down 34% *
4. 1930, down 34%
5. 1920, down 33%
6. 1937, down 33%
7. 1974, down 28%
8. 2009, down 25% *
9. 1903, down 24%
10. 1932, down 23%

Worst Two Year Periods
1. 1930-31, down 69%
2. 1931-32, down 64%
3. 2008-09, down 50% *
4. 1929-30, down 45%
5. 1973-74, down 40%
6. 1906-07, down 39%
7. 2007-08, down 30% *
8. 1940-41, down 26%
9. 1916-17, down 22%
10. 1920-21, down 25%

Here is A Photo Essay on the Great Depression. This page is heavy with graphics and may take a little time to download. The photos are worth the wait.

As writer Floyd Norris points out, the current situation is not near as bad as it was in 1931. But the similarities are quite alarming. While there is a quite a bit of hype pertaining to the current state of the markets, much of it is substantiated.

In a recent CharlotteObserver article, economist Mark Zandi predicts that the Dow recovery will be long and difficult.

Zandi predicts that the economic situation will get measurably worse. The unemployment rate will be 9.5 percent in Q2 (second quarter) of 2010. Zandi says the market could begin to stabilize in 2010.

While there is much pessimism, the scenario could possibly change for the better. Here are more of Zandi’s predictions:

It could be a decade before the Dow reaches 12,000 points again, the economy will grow much more slowly than the Obama administration envisions, and larger, more controversial bailouts are likely to be coming soon.