The euphoria that swept Wall Street on Monday gave way to a sober reality on Tuesday: a recession, perhaps the deepest one in decades, may be unavoidable. A day after the stock market staged one of its biggest rallies in history, buoyed by the government's plan to rescue banks, investors retreated once again. Worries about the economy came to the fore. Many people fear that corporations -- and by extension their workers and shareholders -- will face harder times in the months ahead. "Everything the government has done is not going to prevent further deterioration in the economy," said Stuart Hoffman, chief economist at PNC Bank. "At the end of all this, what matters is what the economy does."The flow of credit, which has been choked for weeks, began to trickle through the financial system on Tuesday. But the credit markets remained shut to many companies and municipalities. Home mortgage rates, which some had hoped might decline once the government's plans became clear, rose instead. The fear is that the financial rescue will add to an already-swelling federal budget deficit and force the Treasury to borrow heavily in the capital markets.
The euphoria that swept Wall Street on Monday gave way to a sober reality on Tuesday: a recession, perhaps the deepest one in decades, may be unavoidable.
A day after the stock market staged one of its biggest rallies in history, buoyed by the government's plan to rescue banks, investors retreated once again. Worries about the economy came to the fore. Many people fear that corporations -- and by extension their workers and shareholders -- will face harder times in the months ahead.
"Everything the government has done is not going to prevent further deterioration in the economy," said Stuart Hoffman, chief economist at PNC Bank. "At the end of all this, what matters is what the economy does."
The flow of credit, which has been choked for weeks, began to trickle through the financial system on Tuesday. But the credit markets remained shut to many companies and municipalities. Home mortgage rates, which some had hoped might decline once the government's plans became clear, rose instead. The fear is that the financial rescue will add to an already-swelling federal budget deficit and force the Treasury to borrow heavily in the capital markets.
I bet there was a secret meeting: "We can issue everyone a new credit card, everyone, and convince them to borrow on it up to 2,500 dollars or euros or pounds, perhaps even mandate it. The condition would be that the money could only be used to buy bank and security company stock...but a new issue of a new type of stock that has no voting rights, and no rights to any profit should any profit be left after the main stockholders (hereinafter known as TheGreedyFatBastards) sucked the new infusion dry...or, we can convince the governments to do the same without all the costs of sending out the cards and the papers and getting everyone to sign."
And now we are told by this amazingly sharp newspaper that nothing got fixed and therefore a recession is still imminent, and the war and the GreedyRatBastards are still sucking our CommonWealth away. This person deserves a Pulitzer. Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
