Der Spiegel gets a little hysterical in its coverage of the current financial crisis. In comparing the current crisis to the depression of the 1930s, Der Spiegel scares up this hilarious passage:

“Nothing will be like it was before,” said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. “The world as we know it is going down.”

Brooding over a chai latte? It’s just like 1929! More importantly there are some factual errors in the article. It claims that commercial and investment banks have been separate since 1864, but in reality it was only in the 1930s that the two were legislatively separated. Starting in 1980, laws were passed that weakened the provisions of the Glass-Steagall Act and in 1999 it was totally repealed.

The irony is that the Glass-Steagall Act was repealed at the urging of the investment banks. In the late 1990s, flush on Internet boom revenues, the investment banks started salivating over commercial banks. Now, since commercial banks are less affected by investments in derivatives containing bad debt, they’re the ones snapping up the investment banks.