The Current "Bear" Market

Bear Market:

noun    a market characterized by falling prices for securities (stocks and bonds)

Precursory examination provides that a "Bad Bear" market's length is determined by the time required to hit it's lowest value, determined only after it again becomes a Bull market. The crash of 1929 defines the graph's X axis, hitting bottom 34 months later with the Dow down 89.2% of its original value. That value is more than double the downgrade as the both the 1973 Oil Crisis and 2000-02 Tech Crash markets. The Current Bear market's lowest point was four months ago, at 51.9%. The latter three markets reflect the S&P 500.

Each of the three completed Bear markets had a drop in value within 3% of their lowest point within 1 month of the final lowest value, before becoming a Bull market. Past markets show that optimism cannot be placed in an immediate up swing, though the current market is not at it's lowest point.

Inflation:
noun    a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency

Deflation:

noun    a fall in the general price level or a contraction of credit and available money

There are other indicators of worsening, such as the falling inflation rate. The rate of decline of the inflation rate of January, 2009 was the fastest rate since January 1932. In March, 1933, deflation began, technically beginning the Great Depression.

Recession:
noun    a period of an economic contraction, sometimes limited in scope or duration

Depression:

noun    a period during which business, employment, and stock-market values decline severely or remain at a very low level of activity

To gain perspective, this graph shows more than a decade's worth loss in "price," or value in less than 2 years from 1995 to 2009. This illustrates the skyrocketing value of the 1920's as potentially volatile, as the graph's fastest rate of incline is preceded immediately by the fastest rate of decline (relatively). The current market does not position itself that way, having taken a beating at the turn of the century, though it is comparable being in such a short time.

Finally, a look at the 25 best and worst days of the Dow Jones Industrial since 1922. 4 of the worst have occurred in the current Bear, and 5 in the last ten years, the fifth being the Tech Crash. 2 of the 4 days of current Bear can beat the Crash of 1929, and the other 2 can beat 2 days of the Great Depression.

This recession has the warning signs of a depression, the Great Depression used as an example here due to the plethora of available information. The hope of avoiding such a market can be placed in the much different current economic climate, with action being taken as direct study of the malevolent predecessor.