ACCOUNTANT

2009 Depression Will Be Nothing Like 1929

For the record, GDP went up in 2008, by about 3.4%, despite the big fall off in fourth quarter. It will be down again in the 1st and maybe the 2nd quarter but then will be back up - my hunch is that at end of 2009, GDP will be close to flat with 2008, could be plus or minus 1%, and we will be coming out the other end of this thing. Unemployment is at 8%, could get to 9 ior 10%, but more importantly, we have only 3+ million jobs less right now than we did a year ago. Our overall labor participation rate is still near record highs.

To say this is worse than the Great Depression is simply stupid. Are there problems? You bet. But they can be worked through.

But, back in 1929, stock market was in a huge bubble like nothing that has ever existed since. The only thing close to it was the 1999-2000 bubble. NO FDIC existed , and about 35% of banks failed - depositers lost everything. (today, we have 250 banks that are considered to be "on watch", or about 3% of total banks.) But, it you had loans owed to those banks, you were still on the hook. 25% unemployment - but on a much smaller labor participation rate than we have today. GDP contraction of 46% over a three year period. This is no Great Depression Two - not even remotely close.