Banks Tank: Worst Decline in History

Bank stocks are currently in a decline worse than any in their history; including the Great Depression.  As shown below, as of 1/21/09 the KBW Bank Index had declined 78.5% from its 2007 peak; in the 1930s the New York City Bank Index declined 78.1% in the same time period.  On the bright side the bank index bottomed doesn't have much farther to fall given the historical comparison, but also as shown, those stocks did not do anything for a long time afterwards.  This analysis was also featured by CNBC's Patti Domm, click here for her thoughts as well.

Comments

[pd]

any way to see what overall mkt did the same time period?

[VC]

I don't think its a matter of bank stocks bottoming, its a matter of fear of if the government will nationalize one of the banks. If that happens, then obviously you will lose all your money which is why people are sending bank stocks lower, not necessarily because they think the bank firms are that bad. If you think one of them won't be nationalized then it makes for a good investment right now. Geithner said he does not want to seize control of any banks, we'll see if that holds up.

[Antti K]

Banks may have dropped relatively faster and lower, but the stress is on the word 'relative'.

Bank stocks valuations also started relatively much higher.

Hence the faster & larger drop.

Bottom is - relatively - still not in sight.

[Craigicus]

What would a chart of the last 100 years show with this most recent drop?

Would the previous booms of the 1990's and the 2000's look more or less spectacular than the current drop?

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merci beaucoup pour ce poste une grande! j'ai eu beaucoup de réflexions intéressantes en lisant ce que je pourrais simplement mettre en action tout de suite. merci