Tallying 2008’s losses

We survived 2008, said Stephen Webster in The Raw Story, “though for some of us, just barely.” The Dow Jones Industrial Average lost 34 percent and the S&P 500 shed 38 percent, in their worst annual losses since the 1930s; the Nasdaq dropped 41 percent. In all, “$6.9 trillion poured from investors’ coffers in the worst series of cascading disasters since the Great Depression.”

“You may be wondering: Where did that $6.9 trillion go?” said Robert Stacy McCain in The Other McCain. “It didn’t go anywhere,” since that money only existed as equities value—you only lost the money if you sold your stock. No matter how much equities, or your home, dropped in value, what you can sell them for is what they’re worth. “People don’t understand economics.”

That doesn’t mean it hasn’t been “a year of record misery,” said James Sterngold in Bloomberg. Worldwide, $30.1 trillion in market valuation was “wiped out,” but 2008 also saw “the largest bankruptcy, bank failure, and Ponzi scheme in U.S. history.” Still, the biggest loss, and the hardest to recover from, will probably be our “confidence in the markets and the firms that rely on them.”

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.

Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.

Sign up

“So what lies ahead in 2009?” said Nouriel Roubini in RealClearMarkets. Well, the U.S. “will certainly experience its worst recession in decades, a deep and protracted contraction lasting about 24 months through the end of 2009,” and the rest of the global economy will contract, too. What do you expect, with “the biggest asset and credit bubble in human history” going bust? “The worst is still ahead of us.”

No, “the worst of times is behind us,” said Thomas Kostigen in MarketWatch, and the best of times is now. We’ve learned our lessons—like that “real estate prices don’t always go up,” that saving is a good idea—and we’ve hit the bottom. “From here, it’s all up,” or at least it can be. Here’s to hope, “to a happy new year.”