Why does the economy tanking not send me into the corner to rock back and forth and fear the next 'great depression'? I have no idea. It certainly is bad. But I can't see how it could possibly be 'great depression' bad. There are no runs on the banks. They are talking about even uping the FDIC limits. We just forked over $700 BILLION to the idiots that got us in this mess in the first place. It was stupid to do, particularly given their track record, but it was better than doing nothing.
People are calling the floor of the Dow to be around 7300 points. That's just about 50% off of its peak. That is quite the dive, surely, and for those with money in 401k and other stocks its devastating. But only in the short term. That sucker will come back up and it'll be on more solid funding. The market has been riding one bubble after another since the mid-90s. It would have been nice to have a slow adjustment but it would have happened sooner or later.
The problems that caused this are systemic. Our markets are reactionary. The only way systemic problems were going to be addressed were by a reaction to something huge, like this. The deregulators that have been trying to roll back New Deal regulations succeeded and we all got to reap what they sowed. Hopefully, when the adults are in power again, they can re-establish regulations and get rid of the 'Wall Street Magic' bullshit constructions that led to this stuff. Get rid of this magic accounting crap that allows firms to push their bad investments to shell companies and to make up BS constructs like the Credit Default Swap packages so that no one knows who has what or how much it is worth.
What I am saying is this. The economy wreck doesn't send me into an apoplectic fear because this is what had to happen to fix the rot at the center of the financial markets. This is a good thing. Eventually.