Tuesday, February 10, 2009

The S&P 500

Today the stock market fell after Secretary of the Treasury Tim Geithner announced a bank rescue plan that lacked specifics. The Bloomberg article on the decline ended in this way:
The S&P 500 has climbed 9.9 percent from an 11-year low on Nov. 20. The benchmark dropped 38 percent last year, its worst performance since the Great Depression. The S&P 500, Dow and MSCI World Index posted their steepest January declines as companies reported disappointing earnings and the U.S. economy shrank at the fastest pace in 26 years. Link
The S&P index was introduced in 1957 (although it seems that someone has extended it back to 1950). Why one would write that the S&P index had its biggest decline since the Great Depression? Why not write that it had its biggest decline since the Revolutionary War? Or the Bubonic Plague?

Update: I wrote the author of the Bloomberg article and he replied back that data exists back to 1928. And in this piece in the Financial Times, there is mention of the S&P 500 being measured in the 1930s. On answers.yahoo.com there is a link to a site that contains old S&P data. However, these data may be taken from other series and then connected to the S&P 500 series, something I have done with series in the past. The S&P 500 index did not exist until 1957, though other S&P indexes exist back much further.

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