Martin Wolf, Rex Nutting have some bad news about the financial crisis

FT columnist Martin Wolf and veteran MarketWatch Washington Bureau Chief Rex Nutting offer their analysis of the state of the financial crisis, one theoretical, one closer to the ground.

The bad news, Wolf says, is that this recession fully matches the early part of the Great Depression. The good news is that the worst can still be averted.

Wolf offers data that indicates that aggregate demand has declined at Great Depression rates and the overriding question is whether the unprecedented stimulus will be able to offset the effects of this collapse.

It's not all bad news, though. Wolf applauds two steps taken by central banks and politicians, which may help avert another Great Depression: during this crisis, policy makers have lowered interest rates more and passed larger fiscal stimulus packages than anything seen in the 1930s.