How Bad Was The Recession Of 2008

Welcome to the number one recession survival blog! Sign up for our RSS feed and follow us on Twitter to get the most out of the information provided here. Thanks for joining us!

2009 is definitely going to be a better year than 2008.  It’s hard to see how it can get much worse.  I have been studying these numbers all morning and I am amazed at how dismal they are.  2008 was a good year in that it taught us the importance of prioritizing our interests, fiscal responsibility, and that those who influenced our financial policy were wrong.  However, seen in the context of these abysmal numbers, these were hard lessons to learn.  By first taking a long look at these statistics, we will be able to place them in their proper context and examine why we can hope for an improvement in 2009.  But first, the facts:

1.)  $7 trillion dollars was eradicated.

Yes, the stock market lost an astonishing $7 trillion dollars, or all of the gains of the last six years, in 2008.  This massive stock market crash was precipitated by the spectacular implosion of a housing market fueled by risky sub-prime mortgages.   We will cover sub-prime mortgages in a later post.  However, once venerable insurance companies and lending houses were taken over by the government in order to avoid bankruptcy, it was a matter of time before the stock market began a massive and severe correction.

2.)  2 million jobs were lost.

Either you were directly or indirectly effected by the massive number of layoffs this year.  These numbers still do not accurately reflect the number of people working part-time against their wishes, as well as the number of people that have given up looking for employment.  As the credit crunch continues to tighten, companies are going to layoff more people because they do not have access to the credit lines necessary to fund their daily operations.

3.)  Home prices have dropped by an average of $50,000.

Home prices have fallen for 27 months in a row.  The market is weeding out inflated home prices.  Coupled with the credit crunch limiting potential home owner’s ability to purchase new homes, the market is indeed bottoming out.  Foreclosures are also increasing throughout the country, blighting formerly thriving neighborhoods.  While some analysts are predicting that the market may stabilize next year, others believe that without a concerted effort by the incoming Obama administration, housing prices will continue to fall.

These are just a few of the harrowing financial stories of 2008.  However, these are representative of the wide-ranging nature of this current recession.  Yes, this was a tough year.  We at STR will continue to unravel the underlying causes of these catastrophes.  Armed with a thorough understanding of these issues, we will be able to pursue effective strategies that will better all of our personal financial situations.

Related Posts:


  1. How’s the mortgage disaster, and free fall in home prices, likely to be solved if individuals can not find a job? There are millions of individuals that previously lost their homes to foreclosure and many more will unless the USA starts producing something more then debt. It’s time to change the trade deals with China. For crying out loud, our greatest trade partner is a communist nation!

  2. While your point about China is salient, the US will not grow unless we encourage innovation here. You’re right though, we have to staunch the bleeding. Until we take care of our people here, at home, we won’t be able to progress and all of the BRIC nations will overtake us.

Leave a Reply


CommentLuv badge