A little perspective by the numbers…As of December 15, 2008…
BEAR MARKET – 100 days ago the S&P 500 was down 14.1% YTD (total return). As of last Friday, the S&P 500 is down 38.7%YTD. Thus the S&P 500 has fallen 28.6% in the last 100 days, a performance that would rank as the 6th worst bear market of the last half-century. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research, S&P).
NOT WORTH AS MUCH – 100 days ago the stock market capitalization of the S&P 500 was 10.9 trillion. As of last Friday’s close of business, the market capitalization of the stock index had fallen to $7.7 trillion, a loss of $3.2 trillion. By comparison, the US government spent 3 trillion for the entire 2008 fiscal year (source; S&P, Treasury Department).
AMAZING VOLATILITY – 100 days ago was 9/06/08. As of that date, the S&P 500 has produced 26 days with a gain or loss of at least 4% in the previous 7,626 days, a period of almost 21 years. As of today, the S&P 500 has had 26 days with a gain or loss of at least 4% in the last 100 days (source: BTN research).
WHOOPS – 100 days ago 9 Wall Street equity strategists predicted where the S&P 500 would finish the year 2008. Their average year-end forecast was 1363. The stock index close last week was 880 (source: Baron’s).
BONDS – 100 days ago the yield on the 10-year Treasury note was 3.69%. As of last Friday the yield on the 10-year note was 2.60%, a drop of more than 1%. The last time the yield on the 10-year note changed (either up or down) by more than 1% over the course of a calendar year was 2002 (source: BTN Research).
MORTGAGE MESS – 100 DAYS AGO was the first weekend in September and rumors surfaced that the US government might be forced to take control of mortgage giants Fannie Mae and Freddie Mac. The 2 firms have issued more than $5 trillion of debt and mortgage backed securities. The seizure of the companies was announced by Treasury Secretary Hank Paulson on Sunday 9/07/08and included a pledge to make as much as $200 billion available to deal with future mortgage defaults (source: Wall Street Journal).
CLOSE THE DOORS – 100 days ago Lehman Brothers was in the investment banking business, as it had been for the previous 158 years. When no “white night” emerged to rescue Lehman Brothers, the firm that had invested heavily in sub prime mortgages was forced to file for bankruptcy protection on Monday 9/15/08. The company, which began in 1850 in Montgomery, AL and had survived the Great Depression, listed $639 billion of assets in its court filing, the largest US bankruptcy ever (source: Wall Street Journal).
HOUSING INDUSTRY – 100 days ago 303,879 homeowners had received at least 1 foreclosure-related filing (e.g., default notices, auction sale notices and bank repossessions) in the previous month (August 2008). 259,085 homeowners received a foreclosure in November 2008 (source: RealtyTrac Inc.).
EMPLOYMENT SITUATION – 100 days ago the unemployment rate in the USA was 6.1% and the number of idle workers nationwide was 9.38 million. Toda the unemployment rate is 6.7% and the number of out-of-work Americans is 10.33 million. Thus over the last 100 days 950,000 workers have lost their jobs (source: DOL).
GAS – 100 days ago the nationwide average price of a gallon of gasoline was $3.67. The average price fell for 86 consecutive days, a streak that ended last Saturday (12/13/08). The cost of a gallon of gasoline dropped to $1.66 on Saturday, down $2.01 from 100 days ago (source: AAA)
OIL – 100 days ago the price of oil was 106.23 a barrel. The price of a barrel of oil closed last Friday at $46.28, down $60 a barrel or 56% in the 100 day period (source: New York Mercantile Exchange).