The Great Recession vs. The Great Depression – We May Have it Worse Now

They say everything is bigger and better in Texas. I say, everything is bigger
and badder (as in worse) on Wall Street today than 85 years ago. Despite all the
parallels that exist between today and the Great Depression, there is one factor
that just doesnt match up time. The Great (post-2007) Recession has already
lasted longer than the 1929 to 1932 market meltdown. If you focus merely on
elapsed time, you can reach two conclusions: Either there is no parallel, or the
2007 bear market is over The 2007 bear market will be more intense and last
longer than the 1929 1932 parallel A look at the pattern and shape of the
post-1929 and post-2007 declines, along with the sentiment that accompanied
major events within both periods, suggest that we are in a monster version of
the Great Depression with the next leg down not too far away. If You Think It
Cant Happen Again, Think Again Ive often heard that the Great Depression cant
happen again because we are no longer on the gold standard the absence of the
gold standard now allows the Federal Reserve to print their way out of any
recession. That is true, the Fed can now print unlimited amounts of money.
However, the non-existent gold standard is a double-edged sword. Just as it
enables the Fed to print money (which the Fed has done for decades), it has
enabled a massive leveraged bubble. Its this unbridled (by the gold standard)
leveraged frenzy that created a huge financial leverage bubble, and the Federal
Reserve attempted to fix the bubbles consequences with a new bubble the QE2
bubble. Regarding the QE2 bubble, the May ETF Profit Strategy Newsletter stated
that: The Fed is fueling a new bubble to combat the damage left behind by the
previous one. Once punctured, bubbles tend to deflate quickly. Deflate it did.
The S&P lost 296 points from the May 2 high to the Oct. 4 low. The liberty of an
unbridled currency did not prevent the decline. Sentiment Parallels Heres where
the parallels between the Great Depression stock market meltdown and the
post-2007 decline become interesting: