New York, Sept. 20 (Reuters): There’s something about hundreds of billions of dollars vanishing overnight that begs a comparison to the 1929 market crash and the Great Depression.

Almost — but not yet.

Market veterans and scholars say it’s serious, because it has been preceded by a 13-month credit crisis that has gotten worse despite government efforts to solve it. But it is yet to reach the cataclysmic scale of the Depression.

“I’ve lived through plenty of debacles. Each time you go through it, it seems like the worst since 1929,” said Theodore Weisberg, a New York Stock Exchange member for some 40 years.

“The nomenclature of the word ‘crisis’ has cheapened,” said Roy Smith, a professor at New York University’s Stern School of Business and former partner at Goldman Sachs.

No one disputes that it is a profound crisis, but Depression-level may be overdoing it, said Allan Sloan, Washington Post and Fortune magazine columnist.

“I don’t think so, considering that the Great Depression had thousands of banks failing and people losing their life savings, 25 per cent unemployment and social unrest and tent cities of the poor,” Sloan said.

It is clear that the current financial meltdown that killed Lehman Brothers, sold off Merrill Lynch and forced the US government to take over insurance provider American International Group could radically change nearly a century’s worth of financial policy.

Each faltered on debt and other interrelated, complex financial instruments that ensured a more rapid collapse than Wall Street and regulators could handle.

That is a key similarity to the crash 79 years ago, said Maury Klein, professor emeritus at the University of Rhode Island and author of Rainbow’s End: The Crash of 1929.

“What’s similar in each case is you have a situation where you’re starting to play in ever-larger stakes with things that you don’t understand,” he said.

But today’s overall US economic picture is quite different.

“With just 6 per cent unemployment, we are having a debate as to whether we are even in a recession,” said Richard Sylla, professor of the history of financial institutions and markets at New York University.

Prominent economic columnist Robert Samuelson wrote a piece in the Washington Post in July titled “A Depression? Hardly”. He said he would write the same column now, but “with less conviction”.

That is because there is no telling where the erosion will stop.

Federal Reserve chairman Ben Bernanke and US treasury secretary Henry Paulson are determined to avoid the mistakes of 1929, said Brad DeLong, economics professor at the University of California, Berkeley.

“They want to make their own, new mistakes,” DeLong said.