I suppose that merely painting the outline is sufficient to transmit the picture, and being explicit might result in his excommunication. Self-preservation is, after all, a primary concern of any thinking being.

If one looks at the Crash of ’29 as being a consumer (stock) equities collapse that echoed and amplified its way throughout the economy, shaking everything to pieces, then this is a consumer housing (home equity) collapse that is similarly shaking the global economy to pieces.

IMHO, this time around, the underlying forces behind the financial earthquake are much, MUCH larger than the forces that drove the Great Depression. If one looks around, even a little bit, one finds obvious signs of large structural entities that are on the rocks — FDIC, Social Security, the export markets (or lack thereof), the Fed buying Treasury debt to support the Treasury (a comically insane picture if ever there was one) — the picture today is much more bleak than that following the Crash of ’29 and will take (at least) a decade to play out, maybe three or four decades.

What a shame — there was a point, early in 2007, when it was completely obvious to all (all those with functioning brains, at least) that the mortgage madness had reached a critical mass and would continue to drag the dysfunctional financial system down the drain with it if something were not done immediately to put the fire out. Instead, we poured relief on the banksters, and allowed the consumer-consuming fires to grow and grow and grow, instead of pushing for complete and total restructuring of the ARM products, and placement of foreclosure firewalls to impede the domino effect of cascading debt collapses. And now we are repeating the same errors (too little too late) with the CDS quagmire.

I think it is too late at this point. Multiple icebergs have opened gaping holes in our global economic hull, and the water (losses) pouring in far exceeds the capacity of the pumps. This ship is going down.

There will be another boom, and another rosy future. Just not for a very long time, and not while this economic structure/facade remains in effect. This system is going to burn to the ground and a new one will be constructed to replace it — much the same way as the systems of firewalls and regulations (FDIC, Glass-Steagall Act, more stringent reporting by financial institutions) were created in the Great Depression to prevent that sort of calamity from ever occurring again. And I suspect that along with this wreck of a financial system being washed away, the bulk of the elected-for-life Senators and Representatives will also be washed away, as it becomes apparent to the masses of cowering sheeple just how badly their elected representatives have bungled things. And that’s a Good Thing — who would want these clowns legislating the next financial system to replace the current mess?

“In panics, once firmly held truths are no longer relied upon.” Captures it all.

Trust. Expectations. Comfort zone. Everything’s out the window. Those “truths” are gone for at least three generations. So is the trust. Just like the GD.

You mentioned “decade recessions”. It’s as if there’s been a thirty year ratcheting down. It’s kind of like an earthquake zone. Every ten years there has to be a “minor quake” to readjust the structure, and you hope that’s adequate. But if the structure doesn’t change enough, the “Big Quake” hits.

SO. IMHO. This is the Big One. The Big Guys have run out of markets to juice to keep everyone engaged.

@Bruce: FASB change. Correct. That was already factored in. Who knew? Trust. Correct.

@leftback: Surprisingly new observation. This is a “rich man’s panic”. Correct. Never nailed it that well. Which was the ONLY reason everyone important was peeing their pants.

And still are.

You’re starting to sound like S.B.

Yep, and by the way, how’s that FASB change working out? Uh, hasn’t seemed to restore the faith that government thought it might…maybe some have lost faith in the value of those assets, and that faith based on false premises….I know, give it time…faith (and a short memory) takes time…