Barring a massive bounce in the coming weeks, this will be the worst year for stocks since 1937, says Bill Bonner. The greed driving the market has turned to fear. And not the kind of fear that President Bush created about terrorists to push through his agenda. This time we need to be afraid…

More from Bill in The Daily Reckoning:

Today, on the 11th day of the 11th month at precisely 11am London fell silent. We were asked to remember our war dead.

[...] As it turned out, the sky fell in 1914… and it kept coming down for the next 31 years. In last week’s recitation of all the calamities that befell the generation of ’14 – war, depression, influenza, bankruptcy, hyper-inflation – we left out one, the Dust Bowl. The poor Okies got it all.

What can we learn from this? That bad things happen – even things you thought were impossible. And that when things do go bad… they can go bad in a big way.

What can go wrong now? A lot… things we can’t even imagine.

[...] We’ve already seen things begin to go wrong. Unless the next 45 days bring a remarkable bounce, this year will be the worst year for the stock market since 1937. Trillions of dollars has been lost… which has already caused a major change in the way people think. In a matter of weeks, the dominant emotion has shifted from greed to fear.

You’ll remember, the Bush administration worked hard to make people fearful. They came up with those preposterous “threat levels,” trying to convince the mob that it was in constant danger.

Now, the mob actually feels in danger – in danger of losing its jobs and houses. Fake fear has given way to real fear. So, the new administration will turn away trying to create an atmosphere of fear to trying to give people confidence.

It’s the “End of the National Nightmare,” says TIME magazine. No more torture. No more ‘threat levels.’ No more suspected terrorists working behind the counter at Burger King (NYSE:BKC). Terrorists? Who cares about them? The danger is now real… and right out in the open. Everyone is running scared.

And so, in the national narrative, one cockamamie bamboozle takes the place of the one that went before. What we had to fear before was a worldwide terrorist assault on our freedom. Now, we gladly give up our freedom, in the hope that it will keep us from losing any more money. Now, when the feds come a knockin’, we all open the door and invite them in. Because we need them to give us money… to bankroll our banks… to bailout our auto industry… to provide financing for our homes… to save our economy… and our jobs…

Imagine that just a few short months ago we were naïve enough to think that people should look out for their own finances… that the free market should decide which businesses survive and which fail… that buyers and sellers should set prices for assets… and that capitalists should finance their own banks and insurance companies with their own money.

Now, we’re so much smarter! Now, we include the government in our prayers: may it be guided by wise and worthy men… may it keep the bread baking and the circuses performing. And why not count on the government? Remember, the only thing we have to fear is fear itself.

Source: Something Always Comes Next