"Two Ways to Play"-Kevin Depew of Minyanville
Thursday, September 17, 2009SUSIE GHARIB: Some say the current economic recession feels more like a depression. But is that really the case? Tonight's "Two Ways to Play" takes a look. Here's Kevin Depew of Minyanville and Minyanville's Kevin Depew.
KEVIN DEPEW, EXECUTIVE EDITOR, MINYANVILLE.COM: Recently I ran a Google search on the words economic depression. Incredibly, there were more than five million web hits and 11,000 news hits. Are we seriously calling our recent crisis an economic depression because if so, I have a history lesson. It took six long years for unemployment to recover its 1929 level after reaching a rate of 35 percent in 1933. Fast forward to today. Unemployment is a mere 5 percent off its pre-recession peak in 2007. During the real depression, unemployment by this time had reached nearly 20 percent. So, while it's true, our current recession is tough, let's keep things in perspective. This is most assuredly no great depression. Whoa. Let's back up a bit and consider an important question: how do we measure unemployment because in the 1930s, anyone over the age of 16 without a job was considered unemployed. I can assure you, the last thing we want to do today is to use the 1930s definition of unemployed. Meanwhile, consider the following: the steepest decline in home prices on record, foreclosures at record highs, short-term Treasury yields near zero, producer prices showing their largest decline in 59 years. We can continue calling this the worst recession since the great depression if it makes everyone feel better, but I think it's a mistake to trivialize the magnitude of our current downturn.
