华尔街很生气,后果很严重.

From Barrons:

What has been missing for so long is the recognition among policymakers that this is not some garden variety recession looming over the world economy. Typically, recessions have occurred when companies cut back production after being stuck excessive levels of inventories, or after a tightening in monetary policy, or when companies over-invest in capital goods (of which the most recent was the tech bubble).

But what's pushing the global economy toward recession this time, is something much more serious. It's the rapid deterioration of the international financial system. What began as a contained subprime-mortgage problem in the U.S. has blown up into a full-fledged global credit crunch. And there is no sign yet of when it will end.

What is so dangerous here is that the world economy cannot grow in the absence of a sound financial system. Business activity and consumer spending will inevitably come to a halt if the banking system is unable and unwilling to provide credit. Yet that is precisely what is at stake here. What's made matters worse is the seeming lack of urgency by policymakers in Europe and in the U.S. to get in front of this very serious crisis.

With any luck, that may be about to change.

Expect to see another 50 basis-points cut at the Jan. 30 Federal Open Market Committee meeting, which will bring fed funds down to 3%.