Friday, 10 October 2008

Losses on Wall Street shares reach $8.4 trillion

The scale of the collapse of US share prices taking place on Wall Street is now of literal 1929 crash dimensions. Total losses on US shares during the last year are now $8.4 trillion. To give a scale of comparison this is four times the size of annual UK GDP.
The Dow Jones Industrial Average has fallen by 39 per cent since its record 14164.53 reached one year ago. The fall on Thursday was extremely severe, the 11th largest daily fall in percentage terms in the history of the Dow Jones industrial Average. But most serious is the continued day after day fall. The Dow Jones Industrial Average has fallen by 23.1 per cent in the last seven days. The Dow's crash in 1987 was 22.6 per cent in one day. The 1929 crash was back-to-back declines of 12.8 per cent and 11.7 per cent.
It is extremely striking that such a historic fall takes place after the Paulson package, after the co-ordinated half percent international cut in interest rates, and after the British bank plan. It shows clearly that the authorities have lost the ability to seriously influence share prices.

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