To understate something would be to state something or describe something in restrained terms that downplay the extent of the thing. This picture represents an understatement by playing down how serious the DOW has fallen. In real life, things would be going horribly if the DOW ever fell that low or that quickly. By saying "that's not so bad", the man is understating the situation.
An alternate example would be to say that George W. Bush was kind of unpopular. This would be an understatement in the sense that he is regarded as one of our country's most unpopular presidents. Additionally, it would be an understatement to say that during hurricanes, it rains a bit.
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