Yesterday the Stock Market took a nosedive. Here’s what I know. US government spending equals 25% of GDP. Conservatives are cutting government spending. GDP will drop. The economy has to slow. So we take an already anemic economy and slow it even further. Maybe, just maybe, when the economy is slow, government spending is good?
From NYT:
Stock markets continued to slide Friday in Europe following sharp sell-offs in Asia and on Wall Street, as pessimism about weak growth in the United States combined with longstanding worries about debt levels in the euro area.
Futures on the Standard & Poor’s 500 were also down, indicating another weak opening in New York.
Investors continued to pull funds away from stocks — including in emerging markets despite their solidly growing economies — and shifted instead into the perceived safety of assets like U.S. Treasury bonds, German bunds and precious metals. (more…)
| Largest S&P 500 One Day Percentage Declines since 1950 | ||||||
|---|---|---|---|---|---|---|
| Date | Percent Decline | Close | Previous Close | Six Months Later | ||
| 1 | 10/19/1987 | -20.5% | 224.84 | 282.70 | 15.3% | |
| 2 | 10/15/2008 | -9.0% | 907.84 | 998.01 | -4.7% | |
| 3 | 12/1/2008 | -8.9% | 816.21 | 896.24 | 15.7% | |
| 4 | 9/29/2008 | -8.8% | 1,106.42 | 1,213.27 | -28.8% | |
| 5 | 10/26/1987 | -8.3% | 227.67 | 248.22 | 15.3% | |
| 6 | 10/9/2008 | -7.6% | 909.92 | 984.94 | -5.9% | |
| 7 | 10/27/1997 | -6.9% | 876.99 | 941.64 | 23.7% | |
| 8 | 8/31/1998 | -6.8% | 957.28 | 1,027.14 | 28.0% | |
| 9 | 1/8/1988 | -6.8% | 243.40 | 261.07 | 11.7% | |
| 10 | 11/20/2008 | -6.7% | 752.44 | 806.58 | 17.9% | |
| 11 | 5/28/1962 | -6.7% | 55.50 | 59.47 | 10.6% | |
| 12 | 9/26/1955 | -6.6% | 42.61 | 45.63 | 14.1% | |
| 13 | 10/13/1989 | -6.1% | 333.65 | 355.39 | 3.2% | |
| 14 | 11/19/2008 | -6.1% | 806.58 | 859.12 | 10.1% | |
| 15 | 10/22/2008 | -6.1% | 896.78 | 955.05 | -5.0% | |
| 16 | 4/14/2000 | -5.8% | 1,356.56 | 1,440.51 | -2.0% | |
| 17 | 10/7/2008 | -5.7% | 996.23 | 1,056.89 | -18.1% | |
| 18 | 6/26/1950 | -5.4% | 18.11 | 19.14 | 10.0% | |
| 19 | 1/20/2009 | -5.3% | 805.22 | 850.12 | 18.1% | |
| 20 | 11/5/2008 | -5.3% | 952.77 | 1,005.75 | -4.8% | |
| 21 | 11/12/2008 | -5.2% | 852.30 | 898.95 | 4.8% | |
| 22 | 10/16/1987 | -5.2% | 282.70 | 298.08 | -8.1% | |
| 23 | 11/6/2008 | -5.0% | 904.88 | 952.77 | 2.7% | |
| 24 | 9/17/2001 | -4.9% | 1,038.77 | 1,092.54 | 12.2% | |
| 25 | 2/10/2009 | -4.9% | 827.16 | 869.89 | 21.8% | |
| 26 | 9/11/1986 | -4.8% | 235.18 | 247.06 | 23.4% | |
| 27 | 8/4/2011 | -4.8% | 1,200.08 | 1,260.34 | — | |
| 28 | 9/17/2008 | -4.7% | 1,156.39 | 1,213.60 | -31.3% | |
| 29 | 9/15/2008 | -4.7% | 1,192.70 | 1,251.70 | -36.8% | |
| 30 | 3/2/2009 | -4.7% | 700.82 | 735.09 | 47.1% | |
| 31 | 2/17/2009 | -4.6% | 789.17 | 826.84 | 27.2% | |
| 32 | 4/14/1988 | -4.4% | 259.75 | 271.58 | 7.0% | |
| 33 | 3/12/2001 | -4.3% | 1,180.16 | 1,233.42 | -8.0% | |
| 34 | 4/20/2009 | -4.3% | 832.39 | 869.60 | 31.7% | |
| 35 | 3/5/2009 | -4.3% | 682.55 | 712.87 | 46.2% | |
| 36 | 11/30/1987 | -4.2% | 230.30 | 240.34 | 10.0% | |
| 37 | 11/14/2008 | -4.2% | 873.29 | 911.29 | 4.2% | |
| 38 | 9/3/2002 | -4.2% | 878.02 | 916.07 | -6.4% | |
| 39 | 10/2/2008 | -4.0% | 1,114.28 | 1,161.06 | -25.1% | |
| 40 | 10/25/1982 | -4.0% | 133.32 | 138.83 | 20.3% | |
Nice chart from Calculated Risk.
