Other commentators like to ask how the coming (or current) recession is worse than ones in the past, or if it is instead more comparable to past depressions. Others again look at absolute or percentage moves in stocks, or market volatility (see chart).
This faith in the old maxim of history doesn't repeat, but it does rhyme is somewhat reassuring if somewhat misplaced. What about black swan events?
More fundamental than black swan-styled analysis (of which there is plenty), there is still an unseemly assurance that if you try really, really hard you can find a past event that shares similarities to the one being studied today. This is dangerous thinking. Let's see why.
Unless you happen to believe time or human civilization is unbounded in the rearward direction, there must be a time that "history" starts, no matter how history is defined. Logic requires this to be true. A corollary is that the saying there is nothing new under the sun is false. Therefore there is always a first time. This may be such a time.
Never before have the world's economies been so tightly intertwined and interdependent, so why keep searching, perhaps fruitlessly, for something, anything, to compare it with? It would be better for all concerned, including you and me, to evaluate the crisis on its own terms and stop being too dependent on the past for guidance. For example, what if the markets don't bounce back as they've done before, or merely take far longer than ever to do so? Can you deal with that? It would be better for all of us to prepare for events in the coming years to unfold far differently than history would lead us to expect.
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