Saut: NOT the Great Depression

Jeff Saut, the respectful strategist at Raymond James has posted his weekly missive, see the latest version here. Last week Jeff suggested this.

His call for this week (but read the full missive):

The Who will be playing on the Street of Dreams this week, and the song will be, “Won’t Get Fooled Again.” Speaking of “fooled,” over the weekend the “cry” went up that the current economy is as bad as the Great Depression. While we don’t want to sugar-coat the current environment, this is NOT the Great Depression. As our friends at GaveKal opine, “This is not the 1930’s all over again. The government and the central banks are not sitting idly by as banks fail this time around. We have automatic stabilizers in place like welfare and unemployment insurance. Back in the 30’s, GDP plunged 27%, real private investment collapsed 87%, consumer spending contracted by 41%, industrial production plunged 54%, personal income fell 25%, the unemployment rate soared to 30%, and half the nation’s homeowners defaulted (not 10%), and 10,000 banks failed; and as over-saturated as we may be today, we don’t have that degree of excess capacity in the financial sector.”

Consider as a probability!