WASHINGTON (AP) -- A Depression doesn't have to be Great -- bread lines, rampant unemployment, a wipeout in the stock market. The economy can sink into a milder depression, the kind spelled with a lowercase "d."
And it may be happening now.
The trouble is, unlike recessions, which are easy to define, there are no firm rules for what makes a depression. Everyone at least seems to agree there hasn't been one since the epic hardship of the 1930s.
But with each new hard-times headline, most recently an alarming economic contraction of 6.2 percent in the fourth quarter, it seems more likely that the next depression is on its way.
"We're probably in a depression now. But it's not going to be acknowledged until years go by. Because you have to see it behind you," said Peter Morici, a business professor at the University of Maryland.
NEW YORK (AP) -- Investors' despair about financial companies and the recession have brought the Dow Jones industrial average to another unwanted milestone: its first drop below 7,000 in more than 11 years.
The market's slide Monday wasn't nowhere near the largest is has seen since last fall, but the tumble below 7,000 was nonetheless painful. The credit crisis and recession have slashed more than half of the average's value since it hit a record high over 14,000 in October 2007. And now many investors fear the market could take a long time to regain the lost 7,000.
March 2 (Bloomberg) -- Stocks slid worldwide, sending the Dow Jones Industrial Average below 7,000 for the first time since 1997, and Treasuries rose after Warren Buffett said the economy is in “shambles” and American International Group Inc. posted the largest corporate loss in U.S. history.
Berkshire Hathaway Inc. fell 4.7 percent following the worst drop in book value in Buffett’s career at the company. Citigroup Inc. tumbled 20 percent as AIG posted a $61.7 billion quarterly loss and HSBC Holdings Plc said it needs to raise capital, triggering the worst plunge in U.K. banks since at least 1985.
Exxon Mobil Corp., the world’s biggest company by market value, fell as oil slid 10 percent. General Electric Co. sank below $8 for the first time since 1994.
“You have almost no reason to own a bank stock,” Keith Wirtz, who helps oversee $20 billion as chief investment officer at Fifth Third Bancorp in Cincinnati, told Bloomberg Television. “There is too much turmoil.”
The Dow decreased 299.64 points, or 4.2 percent, to 6,763.29. The Standard & Poor’s 500 Index dropped 4.7 percent to 700.82, the lowest close since October 1996. Europe’s Dow Jones Stoxx 600 Index tumbled 5 percent, its steepest loss in three months. Nineteen stocks fell for each that gained on the New York Stock Exchange, making it the broadest decline in almost three weeks.
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