Worst since the Great Depression

Over the past few months there has been quite a stream of media articles that basically say "This is the worst <whatever> since the Great Depression." For almost any <whatever> that you want to fill in. For example, a Bloomberg article by Whitney Kisling entitled "U.S. Stocks Rally, Led by Banks, as Fed Cuts Rate to Record Low" says "The S&P 500 has fallen 38 percent in 2008, poised for its worst year since the Great Depression, after losses and writedowns at the biggest global financial companies reached almost $1 trillion and earnings at U.S. companies dropped for five straight quarters, matching the longest streak on record."

Now just because anything is the worst since the last depression does not mean that we are in a depression, but it does suggest that we may not be very far away.

The talk is now that the U.S. economy may need a full $1 trillion in stimulus over the next two years and that $700 billion would merely be a starting point highlights that the U.S. economy is still in a fragile state that could very easily and quickly slide into a depression-like slump if that stimulus were not in the offing.

-- Jack Krupansky