Wednesday, July 09, 2008
The key S&P 500 index tonight closed at 1244.69. That's down 20.5% from its October 9, 2007 closing peak of 1565.15. This in turn means that it meets the official definition of a bear market, which is to say that it has to be down 20% or more from its peak. One can of course question why the figure 20% was chosen and why they're measuring in nominal rather real dollars (with the CPI being 4% higher than in October 2007, the real decline is even greater, closer to 23.5%), but even so it is certainly noteworthy that the decline is so great that this generally used definition is met.