Hearing the latest scores from the markets seems more interesting then listening to the football results these days, such is the frequency with which records get broken. Then again, when you look at the daily changes, these seem more like the cricket results.

The Dow Jones had another bad day in the field on Friday, seeing another 106 runs scored against it.  This follows a 358 innings put in by the bears on Thursday.

It certainly seems to be the case that the bears have got some fast bowlers in their side at the moment, while the Dow has got a batting line up which could not even make the England team.

In fact, with just one day to go, the Dow appears to be on course for suffering its worst June since the 1930s. At close of play on Friday, the Dow stood at 11,346; that’s 1,291 points below the end-of-May price, or 10 per cent down. It is also 2,817 points down on the all-time high set last October, meaning it is 20 per cent down.

But, frankly, the real surprise should surely be that the market rose so high in the first place.

Last autumn, the economic news was pretty grim, but the traders on Wall Street seemed to have their head firmly buried in the sand.

They returned their head to that position in April and May this year, when the Dow shot up, at one point passing 13,000.George Soros warned at the time he expected markets to see another dip, and he was dead right although, frankly, you didn’t need to be a financial guru to think markets had gone too high.

And so the comparisons with the 1930s continue.  And yes, it is like that decade; there are many parallels, but, really, there is no reason yet to think it will get anywhere near that bad.

The 1930s saw a series of quite inept policy mistakes.  Banks went bust in their droves, authorities were far too slow to grasp the seriousness of the situation. No one can accuse Mervyn King and Ben Bernanke of not taking it all seriously.  In fact, Bernanke probably knows more about the 1930s depression than anyone else alive; that is what he specialised in during his days working in academia. 

The bail-out of Northern Rock, criticised though it was, shows why this is not like the 1930s.

If banks were allowed to collapse, leaving depositors with no way of getting their money back, then it would be like the 1930s.Fortunately, it seems unlikely this will happen.

© Investment & Business News 2013