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12:12 PM
Justin Grant
Justin Grant
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It's Beginning to Feel a Lot Like 2008

There's no shortage of frightening economic news floating about these days.

There's no shortage of frightening economic news floating about these days. But the scariest commentary I've seen so far is Business Insider's take on the stunning similarities between 2011 and 2008.

The big difference between the two years though is we're now talking about Italy and Spain the way we once spoke of Lehman Brothers and Bear Stearns, the blog notes. And I guess the United States has supplanted AIG in the role of the too big to fail behemoth.

Investors certainly seem to be preparing for a recession, ditching equities for safe havens like gold and ironically enough, U.S. Treasuries despite lingering concerns over the nation's credit rating. Meanwhile Marketwatch notes another worrisome similarity between 2011 and 2008.

Before stocks broke their losing streak yesterday, the Dow Jones Industrial Average had endured eight consecutive days of declines. The last time stocks absorbed an eight day skid was in October of 2008, shortly after the collapse of Lehman Brothers, Marketwatch notes.

And since equities are a leading indicator, investors are preparing themselves for the worst-case scenario, namely, a double dip recession. However there's a bright side to all this in the long run. The sell-off could open up some bargains for savvy investors.

From Marketwatch:

For investors, it's important to remember that the stock market is a leading indicator, which means the last two weeks of pain was not so much tied to the U.S. debt talks as to discounting of some future economic calamity, likely a recession.

But just as in early 2009, the market will start rebounding long before it becomes clear that the economy is recovering. For investors hoping to capture those gains, the weakness of the last few weeks provides lots of opportunities in beaten-down sectors.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
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