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It Took Four Months and 40% in S&P Before 2008 Stimulus Worked

  • On average, stocks need 1 1/2 years to recover after slowdown
  • Congress failed to pass $2 trillion plan after negotiations
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BofA’s Subramanian Sees ‘Great Environment for Stock Picking’
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Pinning hopes for a fast and lasting bounce in markets on massive stimulus from the government? While no two episodes are the same, that’s not what happened during the financial crisis.

Expectations were high in October 2008, with Federal Reserve interest rates hurtling toward zero and Congress passing a $700 billion bailout package for the economy. Alas, none of it helped in the stock market, at least right away. Shares fell for another four months, piling up 40% of losses before they began to rebound.