October 6–10, 2008: From October 6–10, 2008, the Dow Jones Industrial Average (DJIA) closed lower in all five sessions. Volume levels were record-breaking. The DJIA fell 1,874.19 points, or 18.2%, in its worst weekly decline ever on both a points and percentage basis.
The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009, overlapping with the closely related 2008 financial crisis. The scale and timing of the recession varied from country to country (see map).
Real (inflation-adjusted) GDP did not regain its pre-crisis (Q4 2007) peak level until Q3 2011. Unemployment rose from 4.7% in November 2007 to peak at 10% in October 2009, before returning steadily to 4.7% in May 2016. The total number of jobs did not return to November 2007 levels until May 2014.
Deflation and the Great Depression vs. the Great Recession
In the Great Depression from 1929 to 1933, the price level fell by 22 percent and real GDP fell by 31 percent. In the 2008-2009 recession, the price level rose at a slow pace and real GDP fell by less than 4 percent.
Over the course of four business days—Black Thursday (October 24) through Black Tuesday (October 29)—the Dow Jones Industrial Average dropped from 305.85 points to 230.07 points, representing a decrease in stock prices of 25 percent.
What was the worst day of the 2008 stock market crash?
The decline of 20% by mid-2008 was in tandem with other stock markets across the globe. On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45. The DJIA hit a market low of 6,469.95 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high.
To put this another way, the assumption that 2008 could not happen again is wrong. It could, because the next global financial crisis might well be precipitated by overvalued bank balance sheets, as was the case in 2008, even if the precise reasons for the overvaluation might change.
The odds that the economy will slip into a recession are nearly 50-50, and the time of greatest vulnerability will run from late 2025 to early 2026, according to Moody's Analytics chief economist Mark Zandi.
Some analysts consider these surpluses and the matching current account imbalances to have been the ultimate cause of the Great Recession; some analysts blame US Federal Reserve policies; others the irresponsible practices of financial institutions in the United States.
Since before the Great Recession, the UK has had lower levels of investment than many similar countries, such as France and Germany. After the Great Recession, investment fell heavily in the UK, as businesses couldn't afford to invest as much, and the government chose not to due to the growing deficit.
Ray Dalio, who predicted the 2008 crisis, is warning about America's $36 trillion debt, calling it the country's "biggest problem." He compares current conditions to the 1930s and criticizes Trump's policies, likening them to those of hard-right regimes.
How long did it take S&P 500 to recover from 2008?
The most extreme example of the last 100 years was the crash of the 1930s (which was followed by the Great Depression). This took 25 years to get back to its previous high. The S&P 500 took almost six years to fully recover from the crashes of 2000 (the dot-com bubble) and 2008 (the global financial crisis).
Florida, Arizona, Nevada and much of California, Frey says, struggled more from the crash of the housing market than other regions in part due to years of growth in residential areas before the recession.
From October 6–10, 2008, the Dow Jones Industrial Average (DJIA) closed lower in all five sessions. Volume levels were record-breaking. The DJIA fell over 1,874 points, or 18%, in its worst weekly decline ever on both a points and percentage basis. The S&P 500 fell more than 20%.
Right now, the nation has not tipped into recession — and certainly not a depression, either. A depression is an extended economic breakdown, and we have not seen signs of that kind of pain. (See recession vs. depression.)
As things stand, the consensus among economists is that the UK will avoid a recession in 2025, albeit narrowly. The UK economy grew by 0.7% in the first quarter, so it would take two consecutive quarters of negative growth from here for the country to have entered recession.
The Sahm rule states: When the three-month moving average of the national unemployment rate is 0.5 percentage point or more above its low over the prior twelve months, we are in the early months of recession.
The 2008 financial crisis resulted from a convergence of multiple factors, including a housing bubble, risky mortgage lending, complex financial products, and inadequate regulation—not just subprime mortgages alone.
With insurance costs firmly on the radar, the Financial Times published an article 'How the next financial crisis starts' highlighting systemic risks from climate shocks in property markets. The core issue is insurance cost and availability.
The bankruptcy of Lehman Brothers during the 2008 financial crisis. The Russo-Georgian War took place between Russia and Georgia. Earthquake in Sichuan, China kills 88,000. The 2008 Summer Olympics took place in Beijing, China.
A liquidity crisis spread to global institutions by mid-2007 and climaxed with the bankruptcy of Lehman Brothers in September 2008, which triggered a stock market crash and bank runs in several countries.
