The dismal performance by the London stock market leaves City high-flyers facing much reduced bonuses and foot soldiers fearing thousands of redundancies…With no obvious turnround in sight some of the gloomiest market watchers are making comparisons with other share meltdowns such as the 1929 crash. The FTSE 100 index is now down 43% from the peak reached on New Year’s Eve 1999.
Wall Street traditionally enjoys a late rally in the last couple of weeks of December but this time the fillip failed to materialise. The Dow is also ending down for the third consecutive year. The Nasdaq has dropped even more sharply, recording a 31% drop this year.
The Dow has now suffered a cumulative fall of almost 38% since January 2000, compared to a slide of 45% during the 1970s oil crisis and an 89% drop during the depression of the 1920s and 1930s.
This was 2003, right in the middle of the UK housing boom and a 15 year stretch without a recession. The point being that things can get better quickly, but that the UK markets still have a long way to drop, relative to the gravity of the downturn.