Please refrain from the "sky is falling" comments, but in some serious thought, what realistic number would the Dow have to fall, for us to creep into a Depression?

dow doesn't matter, GDP is what defines a depression.

Yes I realize GDP is the indicator, but the Dow is representive of the economy...good or bad...just a rough " guesstimate"

Three consecutive quarters of loss.

Goodbye, America. It was good knowing you.

The DJIA isn't really a good indicator of GDP growth. The Dow is down like a gagillionity percent, but the economy is contracting something like under 1% for the next quarter or two. Hard to establish a meaningful correlation with those numbers.

I know people will jump all over me for saying this....I'm not so sure the Dow is a great indicator of the economy as a whole anymore.

During the dot com boom/bust it was more of a pyramid scheme than an indicator of the companies they represented. People were buying and driving up the price and selling to the next tier down on the pyramid.

The Dow hasn't been a "true" indicator of the economy as a whole - tho they do trend the same direction just not tied as close together as they once were - since people started buying into stocks to sell at a later date instead of buying for the dividend. Once we got away from the dividend as a reason to buy stock (look how many "great" stocks don't even pay a dividend anymore) we disconnected the stock from the company.

Just my opinion.

It's coming, be prepared.

It's not like there's some 'switch' that's going to get flipped that turns prosperity into depression.  The matter is much more complex than just the DOW, although the DOW is a good indicator.

I don't get it. Your thread is about the sky falling, but you want people to refrain from commenting on it. Like it or not, there is an elephant in the room.

dontcha know itll get betta with obongo in da house.

Market always goes down just before the republican president leaves office and the socialist elected party takes office, happened after Bush Sn left office just before clinton took it over.  

So much for change obongo picks clinton administration things including Wall Street will only get worse.

I've been told that a recession was defined by a shrinking GDP for 2 quarters (6 months) and that a depression was the GDP shrinking by 10% or more.


I have no idea when I heard this or from whom, so take it with a grain of salt.

If you work on cars for a living, chances are you are already seeing the great depression.

It's not just a US thing. Here's a chart of the Baltic Dry Index. It tracks the rates for shipping, i.e., China to US. According to Baltic Exchange, the index provides:

“ …an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.




Hmmmm. Maybe a good time to charter a cruise!

Thanks, that's what I wanted to see....what economists consider as a Depression.
I know, I know, I know the Dow is not a good indicator, but with the Dow in the Upper 7,000's today...but when would most people say "that's it, GDP or not, we're in a Depression"...6000's?

Don't bring up depression!! Most here will tell you it will never happen, same about the coming civil war by 2012. Go ask Alice!!

This is correct, a depression is when there are two consecutive quarters/periods of negative growth.  But because the country grows at an average of around ~3.2%, we could grow 3% in two quarters and be in a depression. The GDP stats for last quarter were just released but they're inflated due to the stimulus checks and spending. We can't technically say we're in a depression until the GDP numbers come back.

What happens when it hits zero ?

Nailed it.  Don't look now, but the door is open and we have started walking down the path.  The Mighty Obama will make decisions/push things that will push us quickly along.


Cat

Great buying opportunity

In which way, up or down?

it flips over back to 100,000 and we all retire.

Once it hits 5000 and keeps going down, we are there.

Buellerian Economics!

If the mighty O would make an announcement saying that in these dismal economic times he's not going to raise taxes and/or there won't be a capital gains tax then there would be much, much less panic selling and liquidating of assets. I mean I thought he was so savvy on the economy, no?   But that isn't likely to happen anytime soon sadly

Just looking at the DOW, not to long ago it was around 14,000.  I'd say around 4,000+ pts were due directly and indirectly with the Housing/Credit Bubble.

I think IT should of been trading around 9-10,000 pts, but "everyone" was caught up in the "moment". What these "Bailouts" have done is just by time for what's coming, but instead of seeing it happen in a One Day, it's "Crashing" over a few Months.  This is whats keeping people from "Real" PANIC.

In my opinion, we are starting to see the beginning of a TRUE correction, and will bottom around 4,500-5000.  What's left are companies with REAL Assets, minimal Liabilities.

The Stock Market is just a "Crystal Ball", and what it's saying is Layoffs, Cut-Backs, Mergers, Downsizing, Reorganizations, and Failures.

What it means for US? REAL PAIN.

Most of US are looking at things as they "Should Be", but there's not ONE thing being done the way it "Should Be".  

It's NOT the END of the World, WE will get through this, Accountability will eventually RETURN.  Until then, TRUST YOUR GUT!

I really tried not to type in CAPS...

As a history grad student, you should know that depressions are occurences which are not simply tied to one set of numbers or another.

What were the economic indicators of the western Roman empire in the 400s?  We do not necessarily have to know the price of wheat, or the number of vessels coming and going to surmise that they were in a terminal economic situation, rife for implosion.

People more educated than I in such matters have provided you with answers to your question which are quantifiable in GDPs and quarterly reports.

Depressions –– in an historical and a real-life sense –– however, could perhaps best be surmised from a variety of other societal aspects which are not necessarily so cleanly mathematical.

Are we in one?  Most likely we are spiralling into one.  

$0.02 entirely subjective opinion, cheerfully refundable.

I would put more weight behind the unemployment numbers than the DOW.  The DOW has been overvalued for quite some time.

It would have to be 1560 to duplicate 1933.

If anyone can do it The Kenyan can.


Yes we can.  

DOW does not love Dear Leader

Whatever grad school you go to, they suck.  The DOW is not representative of the economy, at all.  Market crashes are considered a "leading indicator" (among about 50 other indicators), however market crashes have predicted something like 15 of the last 7 recessions.

I'm seeing the number 4500 thrown around on the trader blogs as the expected bottom. We will see.

If the DOW hits 5000 it will be like this:

Spottswoode: From what I.N.T.E.L.L.I.G.N.C.E has gathered, it would be 9/11 times 100.
Gary Johnston: 9/11 times a hundred? Jesus, that's...
Spottswoode: Yes, 91,100.
Chris: Basically, all the worst parts of the bible.

wtf is a dow?

i'll tell ya what....


when i have to shoot ya in the face, stab you in the gut, and rape you in the ass to get what i need to feed my kids, then we'll be in a depression.

The Dow is meaningless in a scared market.  This is a scared market.

Yep.

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."
-Warren Buffett

Tomorrow 11:00 AM in New York the market will crash bad.  

Things will be ugly.  There will be no budget approval for next year, and in January all military forces and foreign deployed employees will be offered return flights until the military runs out of fuel.  Not returnable assets will be destroyed in place.  

In February, the Chinese government makes a bold move while our military is redeploying.  They come in commercial shipping vessels.  No one realizes what they were doing until it was too late.  Within 24 hours, blitzing teams seize all major ports and over run military bases and air fields along the west coast.  U.S. Forces are pushed back to the Rocky Mountains to regroup.  The Panama Canal is already seized by the Chinese.  The women on the west coast are relatively safe, because the Chinese came for land and brides.  Our nuclear weapons are deactivated in a sign of good faith.  

The United States Navy from the Pacific regroups in Australia, unable to find safe port in the western states or Hawaii.  The Atlantic fleet will be regulated to coastal supplement with what ships and men remain in service.  Within weeks, piracy dominates and destroys the shipping lanes.  Commercial shippers decide that between bills not being paid and the risk of loss ships, there is no reason to continue business.

The USA and the world come to a dead still.  The government here orders farmers to continue farming without any benefit to them for their labor.  In a dry month they torch the fields and either go into hiding, kill themselves or our shot for their actions.  The government attempts at restarts fail.  Food is in short supply.  Fuel supplies are rationed for government needs first.  Highway men plaque roadways and railways.  

By fall we are not sure if the refineries were destroyed by carelessness or terrorism, but those left alive are starving and worried about freezing.  In some cities people found "hording" food (actually having food supplies) are executed by mobs.  

China slowly begins to size up the border along the remaining United States.  They stop because they will take the rest when the people are starving.  Hurting for trained troops, in the shock of the successful sneak attack from the cargo ships and short of spare parts, the Free United States falls back.  Chinese weapons never hit Detroit.  They are shocked because their propaganda and infiltration teams were almost non-existent and yet the city was destroyed.  

The New Soviet Union is welcomed in Europe more than it is resisted.  The masses of people welcome the opportunity to suffer together because they do not have a strong America to show them that a free market when not burdened with socialism can and will succeed.  Great Britain thinks having one absolute and absolutely corrupt monarch was a better idea than having many members of Parliament absolutely corrupt.  The Irish get drunk and forget who to fight.  The Scottish get drunk and forget who not to fight.  

Once undocumented immigrants in the southwest laugh, because they never really learned to speak English and they sure as hell are not going to learn Chinese.  In a blazing time of glory and anarchy, Mexico downsizes its own population to middle 1800's level during heated wars between ruling families.  

Brazil sits quietly waiting for its moment of glory.  In Valenzuela, people wonder, who was Hugo Chavez?  Didn't he used to work for that Chinese guy?  

Jesus comes back in December.  He walks through the ashes of Israel, and  He looks at the devil who is sitting their laughing, but Satan quietly admits he is not sure why he came down here in the first place.   They agree to a do-over.  Earth is destroyed and added to the used planet parts bin between Mars and Jupiter.  

Earth is created.  A man and a woman are booted from the garden.  Three thousand years later, some atheists are sitting around a table arguing that the earth is a million years ago.  The devil grins and comments that next time they should try making mice the dominant species again.    

Earth is created.  The mice are happy.  Dolphins are laughing because once the mice make ships and stuff they milk the manatees to make cheese, and if you have never seen a manatee being milked by a mouse, it is damn funny.  

depression is possible. more so than any time since 1933.

my prediction? 10 to 15 percent unemployment, dow below 6000 in 12 months.

dont blame obama.. he aint much of a factor yet. he could make it worse, he could make it better (pray for the dude folks.. you dont want a depression anymore than you want a colostomy and castration)..

hard hard times coming.. if the auto manufacturers go down hard.. its gonna be interesting.. like 10 years worth of hard hard times...

Ha!

FIXED BAYONETS FORWARD !  HERE TOY GO !