Stock market volatility

The Curious Capitalist - TIME.com » Blog Archive Motion sickness quantified:

"You may have noticed that yesterday was a rough day for the market. And last week had gone so well, too. Shoot. This morning I was talking to some folks over at the electronic trading platform Liquidnet, and one of them pointed me to a Citigroup report that lends nice context to the recent volatility. Here's a look at some different time periods and the number of days the S&P 500 has moved up or down more than 5% during the trading day:

1950-2000: 27 days
2000-2006: 7 days
Jan. 1-Sept. 30, 2008: 20 days
Since Oct. 1, 2008: 22 days

Historically, we've seen a 5% swing less than 1% of the time. Through September, we were running at about 10%. These days, we're hitting the threshold more than half the time. Wear your seatbelts."

Has America Lost Its Mojo?

Has America Lost Its Mojo?: This puts the current recession into more perspective.

"Prior to the 1950s, output drops of 15-20 percent in a single year were routine (admittedly, national income accounting was more primitive.) A number of academic economists say we should simply tough it out as we did back then. Recessions have important cleansing effects, helping to facilitate painful restructuring.

But today's social, economic, and political systems ― at least in developed countries ― are unable to withstand a peacetime decline in output of 15-20 percent within a short period. Massive stimulus and intervention ― the U.S. Federal Reserve's current stance ― is unavoidable. One can only hope that the state can get out of the economy half as fast as it is getting in. Nevertheless, the distinct possibility that stimulus and restructuring may work is further cause to hope that the deepening recession will not morph into a full-blown depression."