Correct.
But when you know the behavior of markets, you also know that when financials lose money, they pull their heads in, lending slows, and as a result the economy slows.
You can see the results in the Fed’s Beige Book survey from yesterday.
Long story short: The administration’s handling of the problems in the finance sector has been pathetic. It does have the power to push the economy into recession, and it appears that the sub-prime problem is spreading into other sectors of the economy - listen to cisco’s conference call and NB how Chambers makes specific mention of the collapse in IT spending from the financial sector. Look at how non-mortgage lending is being impacted, etc.
The Bush administration appears completely AWOL on the one issue that has a better chance than any other of delivering the WH into Hillary’s hands next year. Complete malfeasance, IMO.
Won’t argue with that.