HEADLINE: This Recession Has Been Bad

Above is a chart that compares the S&P 500 earnings performance during the current economic recession (the red line) to that of the tech bubble recession (the gold line) and the average recession dating back to 1936 (the blue line). As you might expect, the current decline in earnings has been significantly worse than during the average recession, and is now worse than during the bursting of the tech bubble.

Note that earnings bottom out and start to improve near the 18 month mark during both the average recession and during the recession of 2001-2002. How far into the current recession are we? About 17 months. This is more evidence that the market may be close to hitting bottom (if it hasn't done so already). Another observation that is worthwhile is to compare how quickly the economy bounced back after the last recession compared to after the average recession. History suggests that the further earnings decline during the market pullback, the quicker earnings increase during the recovery.