the Economy

(Community Matters)
I did dial into the call with my favorite bankers. Not great news. Expect the deepest post war recession with unemployment growing to. 8% through 2009. But they don’t believe we are looking at a depression. Housing prices should stabalize after another 15% decline. Inflation no longer a concern, nor are they seriously worried about deflation. Fed’s liquidity measures: short term lending markets very disfunctional. Banks won’t lend to each other so the Fed is taking on that role, even lending unsecured for very first time to public companies, commercial paper market. Sharp increases in Fed balance sheet – was $900B in early Sept, $1.5T last week, and growing. More may still be needed to stabalize the markets. Posted from my blackberry