The greatest asset bubble of all time - Of dollars and data
TLDR - Excellent blog with clear storyline and breakdown of concepts - of dollars and data
We have gone through several ups and downs, boom and busts in the recent times. Which of these ranks as the worst recession in your view?
There are several ways to look at this very concept. The scale of the recession can be categorised based on
Duration of the recession
How long has this recession been going on? People tend to think of a recession / deflation as a short term pain to be endured over 12 to 24 months after which things are back to normal and the market welcomes us back with a strong sustained bull run. But take the Japanese economy, since the collapse in the late 80s, the market has not recovered at all. Possibly making it the worst recession ever.
Fall from peak - percentage fall
Is the fall from the peak, the real measure of the crisis. 50% or more fall is significant, most of the investment community has probably experienced one in 2008/2009 subprime crisis. Some other might also remember the 2000 dom com bust as well, which is comparable.
Size of the impact
From the previous example, the dot com burst was severe and it had a strong impact across the world, but it was nowhere as bad as the sub prime crisis in the scale of impact felt across the globe.
Tuilp mania in the 17th century has been quoted as an example, but it is was limited to a small subset of rich people in a small part of Europe.
The great depression of 1929 also pops up. But even though the crisis was real the number of people financial products as a part of their portfolio was minimal. So the pain because of the market crash was probably much smaller.
I have been following Nick Maggiulli for some time now. He has made these and other wonderful insights in his blog. His blog is definitely worth a follow - https://ofdollarsanddata.com
