1929 All Over Again?

• Position: Brief Article

As the Nasdaq hits new lows, stock charts are being faxed and e-mailed around Wall Street comparing the index's 68 percent dive to the Dow Jones Industrial Average's 87 percent collapse preceding the Great Depression. No one expects a depression, but Wall Street's sudden fixation on the parallels between the two stock crashes shows how dark the mood has become: Driving stocks lower is a sense that the economy could fall into a longer and more brutal recession than everyone had expected. The reasons behind the economic slowdown are well-known. Manufacturing is declining because inventories have piled up too high. As stock prices tumble, consumers are spending less, driving demand down further. But while Federal...