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October 7, 2008. Bear markets are never fun, and this one is especially unpleasant. The S&P 500 has sharply declined for five consecutive days, giving us a loss of nearly 15%. Clearly the rate of decline in this bear is accelerating:

Until the last few days, the contours of this bear market resembled the nasty bear of 1973-74:

The accelerating decline may actually be good news. We may not know where the bottom is, but we can be confident that we're closer now than at any time since we started this slide.

Using the S&P 500 as a gauge for the overall market, we're rapidly approaching the maximum declines experienced since WWII. Here's a list of bear markets in order of severity:

1956-57 -21.5%
1966 -22.2%
1980-82 -27.1%
1961-62 -28.0%
1987 -33.5%
1968-70 -36.1%
2007-? -36.3% <== We are here, 10/7/2008
1973-74 -48.2%
2000-02 -49.1%

Again, it's imprudent to time a market bottom, but we're about two-thirds of the way to the total declines of 1973-74 and 2000-02. And we're moving at a faster clip.

This is like a financial root canal with no anesthetic. The faster we get through it, the better!

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