One of the interesting aspects of this unprecedented housing collapse, credit crisis, economic recession and market crash has been all the new records we keep seeing:

• Over the past year, the S&P 500 index lost ~$1 trillion more than the entire 2000-2002 bear market, according to Standard & Poor’s. From the October 2007 highs of 1,565, to yesterday’s close of 806.58, the S&P 500 market capitalization lost $6.69 trillion. That’s almost $1 trillion more than entire 2000-03 bear market losses of $5.76 trillion. (Marketwatch)

• The S&P 500 hasn’t been this far below its 200-day moving average on a percentage basis since The Great Depression. (Doug Kass)

• CPI: U.S. consumer prices in October registered their largest single-month decline since before World War II. It is the largest monthly drop in the 61-year history of the data;

• PPI, down 2.8% for the month, was also record breaking drop.

• The dividend yield on the S&P 500 is now greater than the yield on the 10-year Treasury. That hasn’t happened since 1958. (Barron’s)

• First-time claims for U.S. unemployment insurance rose to the highest level since September 2001. The total number of people on unemployment benefit rolls jumped to the highest level since 1983.

• Housing starts fell to 791,000, off 38% from a year ago. That’s the slowest pace of starts since data began being compiled in 1959. Starts are now down 65% from the early 2006 peak — this has become the very worst housing downturn on record.

• Permits for new houses, at a 708,000 pace, were off 40% from a year ago, also the lowest total since it has been tracked starting in 1960. Put this into context of population — in 1960, the total U.S. population stood at 180 million — 60% of today’s 300 million.

more Doug Kass: The 30-year return for BBB-rated corporate bonds is now greater than the 30-year return for stocks. So it has not paid to take equity risk for 30 years! (The Street.com)

• The TIPS Spread ( Treasury Inflation Protected Securities versus the 10-year Treasury) is at a record low 54 basis points (1997)

• The Russell 3,000 now has 1228 stocks a share price under $10. That’s 42% of the index. At the market’s 2002 lows, there were significantly less stocks trading below $10/share — just 884 (Bespoke Group).

• The ratio of the Dow to the SP 500 is at a 42-year high. It’s inches away from hitting 10 for the first time since 1966. (Crossing Wall Street)

Category: Data Analysis, Economy, Employment, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

44 Responses to “Record-Breaking Data Everywhere!”

  1. Archiphage says:

    Well, I guess we should expect the largest credit expansion in human history would generate a few records when the inevitable contraction occurred. I think it’s entirely possible that we ain’t seen nothin’ yet.

  2. Gene says:

    Deflation, deflation, deflation. It’s tough on record books ain’t it?

  3. Concerned American says:

    I said “the global economy and free trade are what is good for you”. I am the decider.

  4. I expect an increasing number of economic variables to be added to the list of records over the next few months as the recession intensifies.

    http://www.investmentpostcards.com

  5. subscriber says:

    A terrifying list of data there, BR.

    And speaking of terrifying, how much longer will the U.S. retain a AAA credit rating? And when (certainly not if) it gets pulled, what will happen to the bond market?

  6. CNBC Sucks says:

    When the going gets tough, the tough get going.

    The question is whether this is the economic bottom yet. Corporate defaults are at a bit over 4% for high yield, and the rate for recent recessions have been around 10 – 12% and upwards, so we may have a year or maybe two more of this stuff. I lived through 1981-82 (sure, yeah, I was not working age yet, but I lived through it).

    Just think of what might have happened if McCain won, died, and Sarah Palin took over.

  7. pj says:

    By any chance, have you read what David Merkel has been writing today?
    http://alephblog.com/2008/11/20/its-called-a-depression/

  8. phb says:

    I hate fixed income…however, there has to be a return opportunity with the TIP/10-yr spread, I am just not smart enough to know how to play it. Thoughts anyone?

  9. Greg0658 says:

    - paper pushers with computer driven word processors and spreadsheets
    RIP the fabric of society in less than a decade

  10. I am certainly one to acknowledge that the use of logic amongst irrational behavior is not always prudent but would you not agree that there are a few bright silver linings in this data?

    When we see “records” being set, either on the upside or the downside of market cycles, would it not be a contrarian signal for a sustained move in the opposite direction?

    Also, if the absolute fundamental issue with this financial crisis is with housing, wouldn’t a “record drop” in housing starts and permits for new houses reveal the beginnings of an environment that would allow for a significant reduction in existing home inventories?

    Of course this is classic use of logic or deductive reasoning but my interpretation of these “records” is that the high existing home inventories will begin to fall, which will then bring supply/demand factors back into balance and stabilize home prices.

    This could be the beginning of the end… or not…

    “Bad reasoning as well as good reasoning is possible; and this fact is the foundation of the practical side of logic.” ~ Charles Sanders Peirce

  11. Archiphage says:

    @ Kent:
    Yes, indeed these trends will eventually reverse, and I believe that what emerges will be far better than what has gone before… but I believe much more pain is ahead first because many people will persist in denying logic even unto their own deaths. Too many people remain in a state of denial even at this late hour.

  12. Mannwich says:

    Well, the good news is “we’re off the lows of the session” (down only 191 on the DOW) as Erin Burnett just reminded us.

    I smell real capitulation in the air.

  13. VennData says:

    Positively Phelps-like

  14. Mannwich says:

    Bob Pisani sounded close to tears just now. When the tears start forming for real, I know THE bottom is near. Very somber on CNBC right now. Getting close but not there yet.

    Am kicking myself for trimming my SRS and QID positions far too soon. Made money but got out too soon and went long a bit on other positions too soon. Oh well, time heals all wounds…I hope.

  15. auden5 says:

    Capitulation? If anything, either late today or tomorrow, we’re in for a technical bounce. This market is too oversold. The bears are betting that Congress won’t do one darn thing for the auto industries, but if Congress lifts even a finger–like giving the automakers a $5 billion loan tied to non-fossil fuel research instead of a general $25 billion loan–we’re going to swing up.

  16. albnyc says:

    Pay no attention to that market behind the curtain!

    @Archiphage: You are correct, of course, that many are still in denial, but I would argue that is more than offset by rampant fear-mongering, which seems to be much more the market mentality than blind optimism.

    We are witnessing imbalances being corrected, but other issues (read Andy Kessler in the WSJ today) are rendering the market a less-than-reliable indicator at present.

  17. mitchn says:

    > I smell real capitulation in the air.

    Maybe among institutional investors and hedgies, but I don’t think retail investors are there yet. Most of the people I know are frozen like deer in the headlights — they’ve ridden the indices all the way down and are holding on for dear life but damn if they’ll sell. They’ve been schooled to buy and hold and are convinced that, once we get through this, the averages will bounce right back up to where they were before the sh*t started to hit the fan.

  18. mitchn says:

    The name of the game is capital preservation.

  19. Mannwich says:

    @mitchn: I agree but we’re getting closer to real capitulation. I said we’d hit DOW 7,000 and S&P 700 before all is said and done but am starting to think even that’s too optimistic. We shall see but I have been selling small positions of my short ETF’s and nibbling at various targeted long positions (although I am getting tired of this market, I admit).

    If I had Steve Barry’s cojonnes, I would have just sat tight with a large position in QID (or SRS) and done nothing all along.

  20. Archiphage says:

    for albnyc:
    I agree with you. I was more talking about the references to fundamental indicators rather than the markets themselves. Sure, I think we’re going lower, but anything can happen at any time… in other words, I trail my stops and am prepared to reverse directions when prices tell me to.

  21. KC says:

    Here are some more…the last time we were this far below the 200 day moving average, the DOW had a 48% rally over the next 6 months (and then fell again).

    The s&p is now 41% below the peak of the last “real” bear market rally that peaked in August. Even following the 1929 crash, the market went back up to where it ‘started’ crashing. This would mean we have to go back up to 1100 before we fall further (unless things really are worse off than the depression, and things really are different).

    I’m one to say…to expect the market to go farther down from here is REALLY playing against the odds.

    Also notice…we’re now at 776, exactly where Barry was saying it’d fall to about 6 weeks ago…and have a good amount of support. This is the point where all the bargain hunters jump in and don’t bail out no matter what happens. Stocks are very very reasonably valued. I can’t see anything falling much farther than this.

    I remember someone in the comment section several weeks ago mentioning that the market won’t stop falling until everyone has stopped guessing where it’ll fall to. I truly do believe this. I have no clue how far it’ll go, but I think we are overdue a very long and high bounce. I think anyone that has a “long-term” outlook of more than 1 week would benefit from jumping in now.

  22. dead hobo says:

    I just looked at a graph of the S&P since 1998. What is amazing is that it took 2 years to fall to the bottom in 2001. It has taken about 1 year in this decline. Back then, the final fall occurred around the invasion of Iraq and took several months. This final fall has taken less than a month. GM and the automakers are the equivalent of the Iraqi invasion. The internet and the free flow of information is the big difference between then and now. Panics start and end at internet speed. I suspect the end and subsequent recovery will also run through at high speed.

    Falling interest rates imply money is flowing. GM waffled yesterday and said than GMAC had no cash to lend (probably for good reason). Cash is available from banks for people who are creditworthy. GM and the others were non responsive to that and just about everything that would add a little honesty and evidence of a business plan.

    I read Roubini a little while ago. I am still discounting him. He sees a bottomless pit. I see a withdrawal of excessive and inflationary credit that is bringing commodities back to rational levels. All other prices will follow suit. The consumer will start buying again and markets will recover to normal levels, not nutty credit intoxicated levels. The consumer is taking the economy back.

    The rapid fall of the stock market is skewing confidence indices, making things appear darker than reality. This little downturn will work it’s way through at about the same rate as the recent commodity bubble worked it’s way through. I really don’t give a crap if Citibank lays off 50,000. Their jobs were substantially the result of a flawed credit based economy. It’s better to see them out looking for productive work, rather than GM styled makework financed by government handouts.

  23. Bruce N Tennessee says:

    Deflation is not a four letter word…

    still buying short term callable cd’s…two years max.

  24. harold hecuba says:

    mitchn

    i see the same as you. the retail crowd is lobotomized 25+ years of being told everything will be fine and 25 years of an incompetent fed micromanaging interest rates and targetting aset prices renders these braindead to not think on their own. countless times i am told and hear ” well my 401k is down 35% but in a few years everything will be ok” i have stopped responding since hostility is directed toward me. years ago i was simply laughed at now i am scolded. people are still underestimating the magnitude that has bulit up over this maniacal credit cycle and bust

  25. Archiphage says:

    They’ll never forgive you for being right, because it renders the ‘hapless victim’ story they tell themselves untenable.

  26. The Curmudgeon says:

    The data is record-breaking, but only from unprecedented levels of wealth accumulation. Things won’t approach Depression-era misery until people actually go hungry (I mean real hunger here–not just hunger for a new big screen TV), and financiers finally quit trying to play with investment money like they were at the casino.

    My recent trip to West Virginia and the very fact that this blog exists tells me that neither starvation nor fiscal sobriety have yet obtained. We’ve a long way left to fall.

  27. DavidB says:

    Did you mean record-breaking or heart-breaking Barry?

  28. auden5 says:

    Barry, do I get props? I called it exactly at 10:24AM right here. Like I said, this market is oversold.

    http://finance.yahoo.com/news/Bipartisan-group-works-to-apf-13633769.html

    Now we have people saying GE is going bankrupt. Irrational fear has achieved new levels.

  29. Virgil says:

    It seems like this article headed “30 reasons for Great Depression 2 by 2011: New-New Deal, bailouts, trillions in debt, antitax mindset spell disaster” by Paul B. Farrell fits in this blog entry. I think the 1560 comments are somewhat like the torches and pitchforks of old.

    http://www.marketwatch.com/news/story/well-great-depression-2-2011/story.aspx?guid=%7BB28B49B5%2DEFD1%2D4941%2DB57E%2DA2BA1545BA09%7D&dist=TNMostReadPAUL B. FARRELL

  30. leftback says:

    @ phb said: “I hate fixed income…however, there has to be a return opportunity with the TIP/10-yr spread, I am just not smart enough to know how to play it. Thoughts anyone?”

    If you want to play this spread you can: Buy TIPS (eg VIPSX) and equal $ of an inverse bond fund: TBT (2x), PST, DXKSX (3x), RYJUX. Take your pick. I did the leveraged funds. I like this trade so much I doubled down on it today. Enjoy.

  31. jrhyno says:

    Is this post the latest? Any thoughts on closing today? I scaled out of my GLD and FXY about a week ago and have been getting long. I wish that I would have waited…. :(

    Jeff

  32. BR,

    we keep hearing: “I shouldn’t have sold XYZ @ 43, now it’s 92…I’m dense, I sold way too early, etc.”

    could you run a post on how you decide to Sell..?

    Nobody bottom-ticks every Short, or top-ticks every Long, but exiting Trades, almost, seems harder than finding decent entry-points….

  33. jrhyno says:

    I didn’t mean is my post the latest, i meant is the record breaking data the latest BR post.

    And as they say at the races: “And DOWN the stretch they come!!”

  34. The Curmudgeon says:

    To be comparable to the Great Depression stock crash, the Dow would have to reach about 1,500–a roughly90% decline from its all-time high of a little over a year ago–before it bottomed out. It hit 143 in 1932 for its all-time low.

    I wonder if there are any Elliot Waves or other similar nonsense to describe such a thing. And lest the traders forget, there were plenty of opportunities to lose money on the way down. It kept “testing” its previous lows and blasting through them, until really, there was nothing left to test.

    Alas, it can’t happen again, can it? Trees really do grow to the sky. At least until they don’t.

  35. jopo says:

    you forgot the record breaking number of people who have ignored the fact that the last 25 years in equities have been the exception not the rule. only in the 80′s did the focus shift from income (dividends) to appreciation (growth + dividends). when the investor realizes that sales/earnings growth cannot expand forever and for the last 15 years, multinationals have benefited enormously from the peace dividend (end of the cold war and subsequent globalization). when the investing public realizes that the boomers were counting on real estate and equities to fund their retirement, and equities are the far more liquid of the two, then, and only then, will we be able to find a lasting bottom in the equity markets.

  36. jrhyno says:

    Throw out everything, to the lifeboats!! Dive, Dive, Dive….

    This action is getting….tiresome….

  37. Bruce N Tennessee says:

    I think I will buy Barry a couple of new toes for Xmas….maybe a nice red nail polish before they are wrapped and sent…

  38. The Curmudgeon says:

    Pushing on down to 7,500…where is the PPT now? Oops, different thread. And just think, 8,000, we barely knew ya.

  39. whosonfirst says:

    When it comes to the intricacies of finance I am no doubt one of the least knowledgeable people posting here. But nothing sets my teeth on edge like someone saying that stocks are oversold. Based on what? Compared to what?

    The macroeconomic data just keeps getting worse. I realize that markets don’t go straight up or straight down. But each uptick is of less strength and shorter duration so what good is it? The trend is decidedly downward. Worst of all, as this crisis ensues it becomes more and more apparent that the government is clueless.

  40. vaughn says:

    “when the investing public realizes that the boomers were counting on real estate and equities to fund their retirement, and equities are the far more liquid of the two, then, and only then, will we be able to find a lasting bottom in the equity markets.”

    Total credit market debt in the U.S., in 1929, was around 260% of GDP. By 1942 heading down, it was around 150% of GDP. In others words, A LOT OF DEBT got cleansed from the system. This time, however, the story is different. Total credit market debt in the U.S. is approaching 400% of GDP. We’ve got a looong dark way to go before “turning around”…….and that’s assuming the currency ISN’T destroyed between now and then.

  41. mikaeel says:

    DOW 6000 doesn’t seem ridiculous any more does it?

  42. The Curmudgeon says:

    Thankfully Vaughn, we’ve got an expert on the causes of the Great Depression steadily at the helm of the federal reserve ship of state. Oh, wait, we didn’t have fiat currency back then, did we? Then nevermind. Doing now what should have been done under the gold standard of the Great Depression would do nothing except destroy the currency. So history rhymes, it just doesn’t repeat.

  43. Bruce in Tn says:

    Look, these car companies will see this through..they make a good product just like the Packard Car Company does…..no, wait….I mean just like the Studebaker Car Company does….no, wait….I mean just like American Motors does….no, wait….I mean just like the DeLorean Car Company does…..no, wait…

    Hmmmm…I guess maybe if you don’t make a product people want for a price they can afford….

    Oh, just hurry up and get here January 20th…..

  44. Greg0658 says:

    My mom loved her Studebaker.

    I don’t think we will see a startup replacement car company in the USA post breakup. Its just to difficult. The clout of an existing business will clean their clock (DeLorean).

    So we are discussing near monopoly, and the plight of “to big to fail is to big to fight.”