Whereas the broader energy sector sharply corrected in the third quarter of 2008, two important parts within it suffered near ruination.
One was the Wilderhill Clean Energy Index ($ECO), which is a collection of solar, wind, and biofuel stocks.
The other is the Canadian Venture Exchange Index ($CDNX), which consists mostly of resource stocks (gold and base metal mining, oil, tar sands, natural gas, uranium). The Canadian exchanges are the most important stock exchanges in the world in the resource sector. Nearly all US juniors have their main listing in Canada.
Both sectors, to put it plainly, were annihilated in the third quarter of 2008, giving back the entirety of their gains over the past five to seven years.
The financial crisis is a credit crisis, so the companies dependent on credit or speculative capital get crushed when investors "rush to cash." The cognescenti call this a "Minsky Moment."
Whereas the correction in the energy majors could be seen as a sort of bull market correction among stocks that had gotten way ahead of themselves, these two charts show a cratering for both the alternative energy space and the junior resource sector.
This is very significant in terms of future energy supplies. The capital markets decide what gets built and what doesn't. Richard Heinberg comments that "Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right." But it's not just oil. The "vaporization" is occuring across the board in the resource sector.