Three years ago tomorrow, on March 9, 2009, the Dow Jones Index hit bottom at a sickeningly low 6547 or 57% below its October 2007 high. From that high, as the recession began in the 4th quarter of 2007, stocks moved lower.
Then shear fear and panic ruled the markets after September 15, 2008, following the Lehmann Brothers bankruptcy. Read the CNN report after the market close on March 9, 2009.
After March 9, 2009, stocks began their historic bull run, as the markets judged the federal government's actions had stopped another Great Depression.
I am harshly critical of what led to the Lehmann Brother's bankruptcy--allowing too-big-to-fail financial institutions to form, compounding that error by the failure to regulate debt leveraging and high risk practices at too-big-to-fail institutions so that Lehmann was leveraged more than 30 to 1 when it failed, the failure to regulate sub-prime lending, the failure to regulate the credit rating agencies, reckless deficits when the economy was growing from 2001 to 2007, and the list goes on.
But once Lehmann Brothers went bankrupt on September 15, 2008, and a financial meltdown began, as surely as an operating nuclear reactor melts without cooling water, both the out-going Bush Administration and the incoming-Obama Administration got more right than wrong. Mistakes were made after Lehmann, but more tough calls made at that time look good rather than bad with the passage of time.
And so yesterday the Dow closed at 12,837 or up about 96% since March 9, 2009, an historic bull run. Lest we forget.