You don't have to look far to find a market down 70% in three years.
The FTSE is 23% off its peak, which was more than ten years ago, but a short boat ride away you can find another stock market that's down 70% in three years.
Ireland's market topped out on 21 February 2007, and it has been a painful journey from there to here. Although the British and Irish economies are very different, both nations share an obsession with property -- it's the default investment for most people.
And therein lay the problem: Irish banks, as well as individuals, were excessively dependent on property values, both residential and commercial. As Senator Shane Ross commented in his book, The Bankers:
"Foreign investors piled into Irish shares as a way of grabbing a slice of the Celtic Tiger action. When investors bought Irish shares they generally bought banks; and when they bought banks they bought property."
It was no coincidence that both the stock market and the housing market peaked in the same month.
The average price of a house in Ireland three years ago was just over €311,000, which at the time equated to about £210,000. Average house prices in UK were just short of £175,000, and didn't peak until October 2007, at £186,000.
According to the latest Permanent TSB/ESRI House Price Index, average house prices have fallen 31.5%, to €213,000. But because of the fall in the value of sterling, this still equates to about £188,000, still higher than British prices at their peak.
Significantly, house prices in Ireland continue to fall, in contrast to Britain. Rents in Ireland are down 25%, but rose 1% in January, according to daft.ie.
The Irish stock market closed at 2,967.42 on Friday, 70% below its peak exactly three years ago. Collapsing bank shares were a major factor in this fall, with Allied Irish Banks (LSE: ALBK) and Bank of Ireland (LSE: BKIR) now shadows of their former selves, and Anglo Irish Bank being nationalised.
A large proportion of the ISEQ index was also accounted for by construction-related companies, such as CRH (LSE: CRH), Kingspan (LSE: KGP), McInerney (LSE: MCI), Abbey (LSE: ABBY) and Grafton (LSE: GFTU).
Of these, CRH is the most international in its scope, occupying a top-three position worldwide in most of the major building materials categories; Ken Fisher recently identified it as a stock to buy.
But the Irish stock market is not all about banks and builders -- other companies that people will recognise include fruit importer Fyffes (LSE: FFY) and food producer Kerry Group (LSE: KYGA).
Where the Irish market goes from here is anyone's guess. Forecasts for house prices range from bottoming out in mid-2010 to continuing to fall for several more years. The country is clearly over-supplied with residential housing and office space, and is currently deflating itself back to competitiveness.
As for the banks, much will depend on the sort of recapitalisations that are needed, and on the effects of the state's 'bad bank' which will buy their distressed assets; because of the difficulty in valuing them, I'd put them at the risky end of the gambling spectrum.
More from Padraig O'Hannelly:
> Many Irish shares are available on the London market, and can be bought with The Motley Fool Share Dealing service.