The looming recession may be worse than the other two serious economic downturns that have hit the U.S. in the past 25 years, according to the Wall Street Journal.

The reason is simple: the housing market is horrible, energy prices are high and the job market is weakening. Moreover, it is still not clear whether big Wall Street firms such as Merrill Lynch & Co. (NYSE: MER), Citigroup Inc. (NYSE: C) and Morgan Stanley (NYSE: MS) have a handle on the meltdown in the subprime mortgage market or whether any of the economic stimulus packages being proposed will do any good. Remember the recession in Japan lasted a decade or so.

"Part of the problem is just not knowing," University of Maryland economist Carmen Reinhart told the paper. "The longer the process of not knowing what the losses are takes, the longer the resolution takes."

Investors, of course, are looking to the Federal Reserve to wave a magic wand and make things better. So far, the Fed's chief has been a disappointment.

"I think Bernanke is in a very difficult situation," former Fed Chief Paul Volcker told the New York Times magazine, which published a profile of Bernanke Sunday. "Too many bubbles have been going on for too long. The Fed is not really in control of the situation."

It seems like the light at the end of the tunnel may be an oncoming train.