The stock market has appeared to stabilize somewhat compared to the significant swings around the time of the Bear STearns takeover. It is not clear whether the United States is in recession, on the brink of recession, or just escaping recession. Should we be complacent? Probably not. Job losses and stagnant wages at a time of increasing food and gas prices surely are worrisome, on top of the credit crunch that has afflicted the financial system.
Here's what Merrilly Lynch CEO John Thain had to say about the expectations for further slowing of the economy, in Louise Story, At Merrill--Write Downs and More Lay Offs, NY Times (Apr. 18, 2008).
So far the slowdown has been finance-driven,” Mr. Thain said. “What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
The recession, he said, is going to move from being a finance-driven problem to a consumer-driven one, and Merrill may continue to struggle as a result.
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