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First with Financial Comment from Arabia

Two stock market comparisons to the 1930s

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98115-125701680563154-John-Lounsbury

The above chart is compiled by Doug Short of dshort.com and it compares the current bear market since 2000 with the Great Depression years and Japan post-1989.

It is interesting to note that the more modern example is the worst crash, despite the frenzied government bailouts and stimulus packages by Japan in the 90s. Perhaps it is true, as this website argued yesterday (click here), that government intervention may increase market volatility and not correct it.

Then the final chartoftheday.com below is a reminder just how overstretched the current rally has become. It is a rally of historic length and strength, and the higher you rise the harder you fall.

That said I would expect markets to bounce today after the sell-off to close last month.

98115-125701037385867-John-Lounsbury.JPG

And one for the road: price-to-earnings have never been higher; spot the overvaluation:

AA PE Ratio PSN Ad.JPG

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Written by Peter Cooper

November 2, 2009 at 10:23 am

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