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+--- Thread: How low does the stock market have to drop until we are in another Great Depression? (/thread-42682.html)
How low does the stock market have to drop until we are in another Great Depression? - John R - 11-18-2012 01:06 PM
I was just wondering. Are we in one now? I mean the stock market has dropped alot. What will happen if it does drop. What will happen to our society? Will it be as bad as the first one?
- pagodaboy2001 - 11-18-2012 01:15 PM
The market isn't the measure of a recession or depression the Gross Domestic Product (GDP) is the measuring stick. The stock market has an effect on the GDP. We haven't reached a recession let along a depression. A recession is 2 consecutive quarters of negative growth in GDP a depression I believe is 4 or 6 quarters. I don't remember when we had negative growth. The last several quarters we had growth a little but the US economy grew. In the 80's the market tanked 50% and it bounced back. The market has yet to lose money in any given 10 year period.
There are now safety nets as well to keep the economy from going into a depression.
- steepeye364 - 11-18-2012 01:15 PM
well last time the dow got all the way down to 51
so it still has quite away to go
but the dow divisor of course is a lot smaller now than back the of course
so maybe in the 5 or 600 neighborhood would be equivalnet to dow 51 in 1932 when you factor in the different dow divisor
I don't think it will go that low though
unless of course Obama wins the election
- Sprout - 11-18-2012 01:15 PM
The Stock Market can drop all it wants. The Great Depression is all about jobs. After the Stock Market Crash in 1929 companies folded and people lost their jobs. The Government had to step in to create jobs by building roads, and bridges. (i.e. Hover Dam)
So in a round about way the stock market can be an indicator that we will go into another Great Depression, but no one can predict that.
Depending on what our government does will determine a direction our society will head, and that will depend a lot on who we elect as President and for Congress. Democrats tend to lean towards more social programs (code for tax increases), whereas Republicans lean towards Free Market solutions (code for tax cuts for companies).
Depending on where you are currently (I want to work or I want the government to help me out) in this crisis, will also dictate how we as a society choose our next leaders.
Hopefully it wont be as bad as the first one. At least out of the first great depression, we as a country learned a lot and our government stepped up to the plate to protect the American people... But my gut feeling is that this will be very different since we are not the only ones hurting.
-Sprout
http://www.baconvsprout.com
- Shaun R - 11-18-2012 01:15 PM
We are no where near a great depression. Last time there was a great depression the S&P went down 87.5%.
- Nev_619dx - 11-18-2012 01:15 PM
There is no way we're in one now. I mean if McCain becomes president, I'm sure we'll go into a great depression, but if Obama becomes president he will raise the economy with all his money saving plans. If we go into a depression again, I think the U.S will be destroyed and everyone will immigrate to other countries.