The Second Great Depression

To give you an idea of what to look for to know if we have experienced anything similar to the first Great Depression:

August 30, 1929 : Dow @ 382
July 8, 1932 : Dow @ 42

So after ~3 years, the Dow was at ~11% of its peak value.

What would this look like in modern times? The Dow peaked at 14093 on October 12th, 2007. If we experience a similar plummet, then sometime in September of 2010, the Dow would bottom out around 1550.

This gives you an idea of just how bad a "real" depression is. That is an average decline of 6.1% per month. The worst we've seen, since our recent peak of 14093, is about a 3% decline per month, over a 9 month period. Yes, this is quite bad, but it is (so far) only half as bad as the slide experienced during the Great Depression.

It could be worse. A lot worse.