Unemployment, Not the Stock Market, Distinguishes a Recession From a Depression

What are the most important and enduring characteristics of the Great Depression? And what should we monitor to determine how severe today’s situation really is?

The stock market will give important clues. But the economy, especially unemployment, defines depressions.

That should be obvious. However, after the stock market rallied off its March 2009 low, the media and many pundits seem to be fixated on the financial markets to determine the severity of the crisis and to call its end.

To see if the bulls’ hopeful thinking holds water, let’s go back to 1929 and have a look at the stock market’s behavior during those horrific times …

Posted by Mr Thx Friday, July 10, 2009