Is the Great Recession still just a half-empty glass?
One year ago, in just eight days, the Dow Jones Industrial Average fell 22%. A year later, it is up 51% from its 12-year low of 6,547 points – the point when investors became convinced the financial sky really was falling. But, the actual fall of the Dow began a year earlier, from its record then of 14,164. From October 2007 through the collapse of Bear Stearns in mid-March 2008, the Dow fell 2,000 points as investors first thought they were looking at one of those old-fashioned cyclical recessions. Between mid-March 2008 until the US holiday, Labour Day, the DJIA seesawed, until Fannie Mae, Freddie Mac, Lehman Brothers and AIG all failed in a week and a half, credit markets froze, and amid the panic the Dow fell 5,000 points through 9 March 2009. The subsequent rally has not yet wiped away these losses, although it is back to about 10,000. However, unemployment in the US is close to 10%, a major watershed for Americans. Analysts and investors sense that, while the worst is over, it may now be years before the economy booms again.