| Says Stewart,"The events of the last few weeks -- gridlock in Washington, brinksmanship over raising the debt ceiling, Standard & Poor's downgrade of long-term Treasuries, renewed fears about European debt and a dizzying plunge in the stock market bear a resemblance to some of the events of 1937-38, the so-called recession within the Depression, with a major caveat: it was a lot worse back then. The Dow Jones industrial average dropped 49 percent from its peak in 1937. Manufacturing output fell by 37 percent, a steeper decline than in 1929-33. Unemployment, which had been slowly declining, to 14 percent from 25 percent, surged to 19 percent. Price declines led to deflation."David Bianco, chief investment strategist for Merrill Lynch Bank of America says "the market is collapsing faster than any fundamentals would warrant."the risk of another recession has soared to 80 percent probability |
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