The S&P 500 Index (SPX) is a stock market index based on the market capitalizations of 500 large companies having common stock listed on the New York Stock Exchange or NASDAQ. The index has been widely used as a gauge of the US equity market's performance, and it has been around since 1923.
In 2008, the world witnessed one of the worst economic crises in history. The financial crisis of 2008, also known as the global financial meltdown, was a severe worldwide economic crisis that resulted in the collapse of the housing market, the banking system, and the stock market. The S&P 500 index was no exception and suffered greatly during this time.
Fast forward to 2023. Recently, the failure of SVB bank has caused a ripple effect that is impacting many startups. This failure has led to a tightening of credit lines and a general sense of unease in the startup community. Many startups are finding it difficult to secure the financing they need to continue operating and growing. Some businesses have shut down, unemployment rates are soaring, and the stock market is experiencing extreme volatility .
Many investors are wondering if the current situation is similar to that of 2008, and if the history will repeat itself. The answer is not straightforward, as there are both similarities and differences between the two crises.
One similarity is the extreme volatility in the stock market. In both 2008 and 2023, the stock market experienced sharp declines and significant rebounds, causing investors to panic and sell their stocks.
Here are some significant events that took place during the 2008 financial crisis, which was one of the worst economic crises in history. This crisis, also known as the global financial meltdown, caused the collapse of the housing market, the banking system, and the stock market. The S&P 500 index was no exception and suffered greatly during this time.
On June 1, 2008, the Federal Reserve provided $225 billion in liquidity through its Term Auction Facility, which was a temporary measure to add liquidity.
On July 11, 2008, IndyMac bank failed, and oil prices peaked at $147.50.
In August 2008, unemployment in the US reached 6%.
On September 15, 2008, Lehman Brothers, a global financial services firm, filed for bankruptcy with $639 billion in assets and $613 billion in liabilities.
On September 16, 2008, the Federal Reserve took over American International Group ( AIG ) with $85 billion in debt and equity funding. The Reserve Primary Fund "broke the buck" due to its exposure to Lehman Brothers securities.
On September 17, 2008, investors withdrew $144 billion from U.S. money market funds, equivalent to a bank run on money market funds. These funds frequently invest in commercial paper issued by corporations to fund their operations and payrolls, causing the short-term lending market to freeze.
On September 26, 2008, Washington Mutual went bankrupt and was seized by the Federal Deposit Insurance Corporation after a bank run in which panicked depositors withdrew $16.7 billion in 10 days.
On September 29, 2008, the House of Representatives rejected the Emergency Economic Stabilization Act of 2008, including the $700 billion Troubled Asset Relief Program, with most Democrats in support and Republicans against. In response, the DJIA dropped 777.68 points, or 6.98%, then the largest point drop in history. The S&P 500 Index fell 8.8%, and the Nasdaq Composite fell 9.1%. Several stock market indices worldwide fell 10%. Gold prices soared to $900/ounce. The Federal Reserve doubled its credit swaps with foreign central banks as they all needed to provide liquidity.
On October 16, 2008, a rescue plan was unveiled for Swiss banks UBS AG and Credit Suisse.
On October 24, 2008, many of the world's stock exchanges experienced their worst declines in history, with most indices dropping around 10%. In the U.S., the DJIA fell 3.6%, although not as much as other markets.
On March 6, 2009, the Dow Jones hit its lowest level of 6,469.95, a drop of 54% from its peak of 14,164 on October 9, 2007, over a span of 17 months, before beginning to recover.
On March 10, 2009, shares of Citigroup rose 38% after the CEO said that the company was profitable in the first two months of the year and expressed optimism about its capital position going forward. Major stock market indices rose 5–7%, marking the bottom of the stock market decline.
These events had a significant impact on the global economy and the financial markets. The crisis was caused by a housing bubble and the collapse of the banking system. The Federal Reserve implemented quantitative easing, a program that involved buying large amounts of securities to stimulate the economy.
While there are similarities between the current economic crisis and that of 2008, there are also significant differences. It is difficult to predict whether history will repeat itself, but one thing is certain: the stock market will continue to be volatile, and investors should be prepared for both ups and downs.
Based on the 2009 crisis, there was an opportunity to short foreign markets as they typically receive news slightly after us and experience a delay effect. Another opportunity was the inverse relationship between the dollar and gold caused by the Fed's bailouts, along with the dollar and other commodities .
In 2008, the world witnessed one of the worst economic crises in history. The financial crisis of 2008, also known as the global financial meltdown, was a severe worldwide economic crisis that resulted in the collapse of the housing market, the banking system, and the stock market. The S&P 500 index was no exception and suffered greatly during this time.
Fast forward to 2023. Recently, the failure of SVB bank has caused a ripple effect that is impacting many startups. This failure has led to a tightening of credit lines and a general sense of unease in the startup community. Many startups are finding it difficult to secure the financing they need to continue operating and growing. Some businesses have shut down, unemployment rates are soaring, and the stock market is experiencing extreme volatility .
Many investors are wondering if the current situation is similar to that of 2008, and if the history will repeat itself. The answer is not straightforward, as there are both similarities and differences between the two crises.
One similarity is the extreme volatility in the stock market. In both 2008 and 2023, the stock market experienced sharp declines and significant rebounds, causing investors to panic and sell their stocks.
Here are some significant events that took place during the 2008 financial crisis, which was one of the worst economic crises in history. This crisis, also known as the global financial meltdown, caused the collapse of the housing market, the banking system, and the stock market. The S&P 500 index was no exception and suffered greatly during this time.
On June 1, 2008, the Federal Reserve provided $225 billion in liquidity through its Term Auction Facility, which was a temporary measure to add liquidity.
On July 11, 2008, IndyMac bank failed, and oil prices peaked at $147.50.
In August 2008, unemployment in the US reached 6%.
On September 15, 2008, Lehman Brothers, a global financial services firm, filed for bankruptcy with $639 billion in assets and $613 billion in liabilities.
On September 16, 2008, the Federal Reserve took over American International Group ( AIG ) with $85 billion in debt and equity funding. The Reserve Primary Fund "broke the buck" due to its exposure to Lehman Brothers securities.
On September 17, 2008, investors withdrew $144 billion from U.S. money market funds, equivalent to a bank run on money market funds. These funds frequently invest in commercial paper issued by corporations to fund their operations and payrolls, causing the short-term lending market to freeze.
On September 26, 2008, Washington Mutual went bankrupt and was seized by the Federal Deposit Insurance Corporation after a bank run in which panicked depositors withdrew $16.7 billion in 10 days.
On September 29, 2008, the House of Representatives rejected the Emergency Economic Stabilization Act of 2008, including the $700 billion Troubled Asset Relief Program, with most Democrats in support and Republicans against. In response, the DJIA dropped 777.68 points, or 6.98%, then the largest point drop in history. The S&P 500 Index fell 8.8%, and the Nasdaq Composite fell 9.1%. Several stock market indices worldwide fell 10%. Gold prices soared to $900/ounce. The Federal Reserve doubled its credit swaps with foreign central banks as they all needed to provide liquidity.
On October 16, 2008, a rescue plan was unveiled for Swiss banks UBS AG and Credit Suisse.
On October 24, 2008, many of the world's stock exchanges experienced their worst declines in history, with most indices dropping around 10%. In the U.S., the DJIA fell 3.6%, although not as much as other markets.
On March 6, 2009, the Dow Jones hit its lowest level of 6,469.95, a drop of 54% from its peak of 14,164 on October 9, 2007, over a span of 17 months, before beginning to recover.
On March 10, 2009, shares of Citigroup rose 38% after the CEO said that the company was profitable in the first two months of the year and expressed optimism about its capital position going forward. Major stock market indices rose 5–7%, marking the bottom of the stock market decline.
These events had a significant impact on the global economy and the financial markets. The crisis was caused by a housing bubble and the collapse of the banking system. The Federal Reserve implemented quantitative easing, a program that involved buying large amounts of securities to stimulate the economy.
While there are similarities between the current economic crisis and that of 2008, there are also significant differences. It is difficult to predict whether history will repeat itself, but one thing is certain: the stock market will continue to be volatile, and investors should be prepared for both ups and downs.
Based on the 2009 crisis, there was an opportunity to short foreign markets as they typically receive news slightly after us and experience a delay effect. Another opportunity was the inverse relationship between the dollar and gold caused by the Fed's bailouts, along with the dollar and other commodities .
If you appreciate my technical analysis and want to tip me
---> www.patreon.com/WallSt
Also don't forget to check my other pages beacons.ai/diywallst
---> www.patreon.com/WallSt
Also don't forget to check my other pages beacons.ai/diywallst