Stan from South Park takes us though the current financial crisis in eight minutes. Not bad!.
Both are certain to allow you to kill time at the office…or while you’re sitting on your couch because you’ve been fired!
While not directly PE related, what follows in an interesting graph that’s been posted on quite a few websites. It has been 513 calendar days since the stock market peaked on October 9, 2007. Since then, the S&P 500 is down 56% and the Dow is off 53%.
On January 29, 1931 — the identical number of days after the 1929 market peak — the S&P 500 was down 49% and the Dow was down 56%. The 1929 crash got off to a much faster start, but we have now more or less caught up.
It’s interesting to see that the S&P 500 during the current downturn was inline with the bear markets of the oil crisis of the 1970’s and the aftermath of the dot.com bubble burtsting in the beginnings of this decade, until, if my addition is correct, the decision to let Lehman Brothers go under was made. Then the market dropped down to Great Depression levels.
From Floyd Norris’ blog:
assume that the market ends 2009 at today’s prices. This would be the list of the worst years since 1900 for the Dow industrials:
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%
You will note that we have not had consecutive really bad years since 1930, 1931 and 1932.
Here are the rankings for worst two-year periods, again assuming 2009 ends at today’s prices:
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%
Just something to think about.
Here is Interim Assistant Secretary of the Treasury for Financial Stability Neel Kashkari giving a talk at the recent Wharton Finance Conference. Given the impact that inevitable regulatory changes to the financial markets will have to private equity, as well as the role the newly socialist U.S. government is taking with banks, it’s of interest to everyone in the business to hear what the treasury is thinking (hopefully they’ll eventually be able to get the banks to actually use the money they’ve been given to issue loans).
Highlights included Wasserstein warning that the global financial crisis will get worse yet, noting that consumer lending and commercial real estate losses are just now beginning. Schwarzman was critical of banks not using the U.S. Treasury funds for their intended purpose of actually administering new loans. Both spoke at length about accounting standards and regulatory issues. Here’s a brief video excerpt from the talk:
Laid Off by Lehman: One Broker’s Story. Worth a watch.
Any kid growing up in the age of Disney knows the story of how one nanny perched on a cloud changed the lives of the Banks family (no subtle surname for these characters). What’s also been discussed of late by writers on both sides of the pond is how the famous scene concerning the run on the Fidelity Fiduciary Bank, instigated by Michael’s refusal to offer his tuppence to the elder Mr. Dawes can teach a thing or two to today’s befuddled bankers. Just don’t try and learn Dick Van Dyke’s abhorred cockney. Here’s the scene for your inner-child’s viewing pleasure: