The Worst Downturn Since the Great Depression and Now All Is Well?

We have supposedly just witnessed the worst downturn since the great depression, or as some have stated the "great recession". We are suffering very high unemployment close to 10% and rising, housing prices down 30% + form their peak, a widespread deleverageing of households, and endless government bailouts and spending.

With all of this, the markets are down an outstanding....14%?! That’s right, from pre October 2008 levels when the S&P 500 was at about 1250 the market is only down 14%! The markets above that level were purely fluff produced by very temporary financial sector/overly leveraged earnings. Hardly a strong response to what we have and will continue to go through over the next several years.

If that is the market reaction to the worst economy since the 1930's, I'll take it without batting an eye.

Let’s compare this market, to other market downturns over the last century. In the 2000 tech bubble, the S&P 500 was down about 48-50%, and it took a full 3 years to reach that trough (NASDAQ was down 76% peak to trough). In 1973 the market was down again 48-50%.

And during both of these past downturns interest rates would drop in the future to help bolster subsequent returns. Currently no such opportunity is possible as interest rates are near 0%.

Currently I am looking over my shoulder and saying, "Was that it"?