Source: Yuri Kageyama, AP Business Writer
Monday January 21, 10:34 pm ET
Asian Markets Extend Losses Amid Worries That US Is Headed for Recession
TOKYO (AP) -- Global stock markets extended their shakeout into a second day Tuesday, plunging amid worries that a possible U.S. recession will cause a worldwide economic slowdown. The dramatic declines were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.
Japan's Nikkei 225 index, the benchmark for Asia's biggest bourse, skidded 4.4 percent in morning trading to 12,738.31 points, after dropping 3.9 percent Monday. Hong Kong's Hang Seng index was down 5.2 percent after plunging 5.5 percent the day before.
"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.
U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. Eastern time.
Dow Jones industrial average futures were down 436 points, or 3.6 percent, at 11,670, while Standard & Poor's 500 futures were down 57.1 points, or 4.3 percent, at 1,268.
Markets have been plunging amid pessimism about the ability of the U.S. government to prevent a recession. The Federal Reserve has indicated it will lower interest rates further, and President Bush has proposed an economic stimulus package that includes $145 billion in tax cuts, but investors around the world are doubtful that the measures will lift the economy quickly.
The U.S. economy has been battered by a slump in the housing market and a credit crisis that has led to billions of dollars of losses among major U.S. banks.
In Europe Monday, investors also dumped stocks, sending the Britain's benchmark FTSE-100 down 5.5 percent and France's CAC-40 Index sliding 6.8 percent. Germany's blue-chip DAX 30 plunged 7.2 percent to 6,790.19.
Takeuchi said investors feel that the selloff is spreading worldwide, setting off fears of a global downturn. Risks of economic contraction have been growing in Japan as both exports and consumer spending are weakening, he said.
Kirby Daley, strategist at Newedge Group, said the Nikkei could shed another 10 percent to 15 percent to the 11,000 level in the next few months. Japanese companies depend on exports and capital investments to keep up profits, and both are endangered if there is a U.S. slowdown, he said.
"The argument that valuations are cheap for Japanese stocks is flawed," Daley said. "The basis for those earnings valuations doesn't consider ongoing problems in the U.S. economy, which are likely to get worse."
Even usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that downsides risks are growing, given the volatile markets and surging oil prices.
"The economy keeps recovering as recent production data show, but downside risks are growing these days," Ota told reporters.
Tuesday, 22 January 2008
USA: The Economy in Crisis
Source: Fortune
Monday January 21, 7:58 am ET
By Shawn Tully, editor at large
The wobbly economy is overtaking Iraq as the issue weighing most heavily on the minds of America's voters. And Washington has noticed. The White House and Congress are almost certain to enact some kind of stimulus package. But like all such temporary, feel-good measures, it will generate a quick blip in growth that will quickly evaporate. In reality only one player has the power to do anything swift and decisive: the Federal Reserve. And its chairman, Ben Bernanke, has already made his intentions abundantly clear. Unfortunately, the cure he's prescribing may be worse than the disease.
Just how low will the economy go? There are conflicting signals. It's clear that the economy is losing steam. The plummeting value of America's houses is chilling consumer spending, layoffs are mounting, and banks and other creditors burned by the subprime crisis are far more reluctant to lend to everyone from small-business owners to private equity firms. But GDP increased by 4.9% in the third quarter, and economists estimate that GDP was still growing in the fourth quarter. Exports are strong, thanks to the weak dollar. The Fed did a brilliant job last summer by flooding the banks with money to prevent a full-scale credit crunch. Credit is far more expensive today, but it's also becoming more plentiful, as demonstrated by the falling rates on everything from LIBOR - the rate at which international banks lend to each other - to junk bonds. So while a recession is a real possibility, it's not inevitable - even the Fed is not forecasting one this year. And if we do get one, it may be brief and shallow, like the one we had in 2001 - with economic growth falling by perhaps half a percentage point for a couple of quarters, and unemployment rising from its current 5% to 5.5% or 6%.
By cutting rates early and often, Bernanke is acting as though a recession - even a mild one - would be a calamity that must be avoided at all costs. He has already reduced the Fed funds rate (which banks pay when they borrow from each other) by one point, to 4.25%, and promises to "take substantive additional action as needed to support growth," a pledge that Wall Street interprets as meaning at least another half-point cut at the Fed's meeting on Jan. 29, if not sooner.
Many on Wall Street back Bernanke. "I'll defend the Fed," says Bear Stearns chief economist David Malpass. "Part of the slowdown is the result of banks' tightening credit, and you help that by lowering the Fed funds rate." Mickey Levy of Bank of America agrees: "You need to lower rates to offset the drag on housing."
But Bernanke is setting the stage for an even bigger recession down the road. Just as the ultra-low rates of the early 2000s created many of the problems we're experiencing today, pumping money into the system would probably stoke inflation, forcing the Fed to hike rates sharply in the near future. "It's better to take a small recession and kill inflation immediately instead of facing high inflation and a really big recession later," says Carnegie Mellon economist Allan Meltzer.
Meltzer, who is finishing the second volume of his history of the Federal Reserve, warns that Bernanke is risking a disastrous replay of the 1970s, when high oil prices fueled double-digit inflation. Every time the Fed started to tighten and unemployment jumped, chairmen G. William Miller and Arthur Burns lost their nerve. They lowered rates to boost job growth, and inflation inevitably revived, causing a vicious price spiral. The Fed let the disease rage for so long that it took draconian action by chairman Paul Volcker in the early 1980s to finally defeat inflation. The price was a deep recession, with unemployment hitting 11% in 1982. "The mentality is the same as in the 1970s," says Meltzer. "'As soon as we get rid of the risk of recession, we'll do something about inflation.' But that comes too late."
Indeed, while the economy is sending mixed messages about growth, the signs of increasing inflation are flashing bright red. For 2007 the consumer price index rose 4.1%, the biggest annual increase in 17 years. Gold, historically a reliable harbinger of inflation, set an all-time high of more than $900 an ounce. The dollar is languishing at a record low against the euro and a weighted basket of international currencies. "Flooding the market with liquidity is a disaster for the purchasing power of the dollar," says David Gitlitz, chief economist for Trend Macrolytics.
The Fed's supporters tend to downplay those dangers. They contend that the inflation surge is being driven largely by energy costs. Since oil isn't likely to rise from its near-$100 level, inflation is likely to tail off in 2008. "That argument is wrong," says Brian Wesbury, chief economist with First Trust Portfolios, an asset-management firm. "As people spend less to drive to the golf course, they will spend the extra money on golf clubs or other products. The Fed wants to reflate the economy, so the money that went into higher oil prices will drive up the prices of other goods."
Fed supporters also point out that the yield on ten-year Treasury bonds stands at just 3.8%, a figure that implies that investors expect inflation to be around 2% in future years. So if inflation is really expected to rage, why aren't interest rates far higher? The explanation is twofold. First, government bonds are hardly a foolproof forecaster. For example, five years ago Treasury yields were predicting 2% inflation over the next five years, and the actual figure was 3%, or 50% higher. Second, investors are so skittish about most stocks and corporate bonds that they're paying a huge premium for safe investments, chiefly U.S. Treasuries. "It's all about a flight to safety," says Meltzer. Stand by for a major rise in yields as the reality of looming inflation sinks in.
So what is the right course for the Fed? Bernanke should hold the Fed funds rate exactly where it is now, at 4.25%. Standing pat might well push the economy into a recession. But the Fed's newfound vigilance on inflation would boost the dollar, effectively lowering the prices of oil and other imports. America would suffer a short downturn and restore price stability, paving the way to a strong recovery in 2010 or 2011.
Sadly, the Fed has already chosen sides. It's likely to lower rates every time growth slows or joblessness rises. As a result, it will never tame inflation until it becomes a clawing, bellowing threat. Then we'll have to suffer a real recession, the kind we suffered in the aftermath of a time we should study and shouldn't forget - the 1970s.
Monday January 21, 7:58 am ET
By Shawn Tully, editor at large
The wobbly economy is overtaking Iraq as the issue weighing most heavily on the minds of America's voters. And Washington has noticed. The White House and Congress are almost certain to enact some kind of stimulus package. But like all such temporary, feel-good measures, it will generate a quick blip in growth that will quickly evaporate. In reality only one player has the power to do anything swift and decisive: the Federal Reserve. And its chairman, Ben Bernanke, has already made his intentions abundantly clear. Unfortunately, the cure he's prescribing may be worse than the disease.
Just how low will the economy go? There are conflicting signals. It's clear that the economy is losing steam. The plummeting value of America's houses is chilling consumer spending, layoffs are mounting, and banks and other creditors burned by the subprime crisis are far more reluctant to lend to everyone from small-business owners to private equity firms. But GDP increased by 4.9% in the third quarter, and economists estimate that GDP was still growing in the fourth quarter. Exports are strong, thanks to the weak dollar. The Fed did a brilliant job last summer by flooding the banks with money to prevent a full-scale credit crunch. Credit is far more expensive today, but it's also becoming more plentiful, as demonstrated by the falling rates on everything from LIBOR - the rate at which international banks lend to each other - to junk bonds. So while a recession is a real possibility, it's not inevitable - even the Fed is not forecasting one this year. And if we do get one, it may be brief and shallow, like the one we had in 2001 - with economic growth falling by perhaps half a percentage point for a couple of quarters, and unemployment rising from its current 5% to 5.5% or 6%.
By cutting rates early and often, Bernanke is acting as though a recession - even a mild one - would be a calamity that must be avoided at all costs. He has already reduced the Fed funds rate (which banks pay when they borrow from each other) by one point, to 4.25%, and promises to "take substantive additional action as needed to support growth," a pledge that Wall Street interprets as meaning at least another half-point cut at the Fed's meeting on Jan. 29, if not sooner.
Many on Wall Street back Bernanke. "I'll defend the Fed," says Bear Stearns chief economist David Malpass. "Part of the slowdown is the result of banks' tightening credit, and you help that by lowering the Fed funds rate." Mickey Levy of Bank of America agrees: "You need to lower rates to offset the drag on housing."
But Bernanke is setting the stage for an even bigger recession down the road. Just as the ultra-low rates of the early 2000s created many of the problems we're experiencing today, pumping money into the system would probably stoke inflation, forcing the Fed to hike rates sharply in the near future. "It's better to take a small recession and kill inflation immediately instead of facing high inflation and a really big recession later," says Carnegie Mellon economist Allan Meltzer.
Meltzer, who is finishing the second volume of his history of the Federal Reserve, warns that Bernanke is risking a disastrous replay of the 1970s, when high oil prices fueled double-digit inflation. Every time the Fed started to tighten and unemployment jumped, chairmen G. William Miller and Arthur Burns lost their nerve. They lowered rates to boost job growth, and inflation inevitably revived, causing a vicious price spiral. The Fed let the disease rage for so long that it took draconian action by chairman Paul Volcker in the early 1980s to finally defeat inflation. The price was a deep recession, with unemployment hitting 11% in 1982. "The mentality is the same as in the 1970s," says Meltzer. "'As soon as we get rid of the risk of recession, we'll do something about inflation.' But that comes too late."
Indeed, while the economy is sending mixed messages about growth, the signs of increasing inflation are flashing bright red. For 2007 the consumer price index rose 4.1%, the biggest annual increase in 17 years. Gold, historically a reliable harbinger of inflation, set an all-time high of more than $900 an ounce. The dollar is languishing at a record low against the euro and a weighted basket of international currencies. "Flooding the market with liquidity is a disaster for the purchasing power of the dollar," says David Gitlitz, chief economist for Trend Macrolytics.
The Fed's supporters tend to downplay those dangers. They contend that the inflation surge is being driven largely by energy costs. Since oil isn't likely to rise from its near-$100 level, inflation is likely to tail off in 2008. "That argument is wrong," says Brian Wesbury, chief economist with First Trust Portfolios, an asset-management firm. "As people spend less to drive to the golf course, they will spend the extra money on golf clubs or other products. The Fed wants to reflate the economy, so the money that went into higher oil prices will drive up the prices of other goods."
Fed supporters also point out that the yield on ten-year Treasury bonds stands at just 3.8%, a figure that implies that investors expect inflation to be around 2% in future years. So if inflation is really expected to rage, why aren't interest rates far higher? The explanation is twofold. First, government bonds are hardly a foolproof forecaster. For example, five years ago Treasury yields were predicting 2% inflation over the next five years, and the actual figure was 3%, or 50% higher. Second, investors are so skittish about most stocks and corporate bonds that they're paying a huge premium for safe investments, chiefly U.S. Treasuries. "It's all about a flight to safety," says Meltzer. Stand by for a major rise in yields as the reality of looming inflation sinks in.
So what is the right course for the Fed? Bernanke should hold the Fed funds rate exactly where it is now, at 4.25%. Standing pat might well push the economy into a recession. But the Fed's newfound vigilance on inflation would boost the dollar, effectively lowering the prices of oil and other imports. America would suffer a short downturn and restore price stability, paving the way to a strong recovery in 2010 or 2011.
Sadly, the Fed has already chosen sides. It's likely to lower rates every time growth slows or joblessness rises. As a result, it will never tame inflation until it becomes a clawing, bellowing threat. Then we'll have to suffer a real recession, the kind we suffered in the aftermath of a time we should study and shouldn't forget - the 1970s.
Monday, 21 January 2008
Timing the Chinese Bubble, Part III
Source: Boon
Notes:
* The US consumers make up about 30% of world GNP.
* The Chinese consumers are about 10% of the US's.
* Therefore, a 1% drop in the US will need to be compensated by a 10% rise in China. Is that possible? Well, probably.
* But if the US drops by 3%, the Chinese will need a 30% of increase to balance out. That will be tough.
* Not to forget about this 'vacuum' effect. When the music is playing and the government keeps spending, everybody makes easy money.
* The biggest spending programmes in China right now are: the Olympics and the Three Gorges Dam. When are they going to be completed? Well, within 2008.
* Just not too long ago, you heard people saying that China is a bubble. You heard from the media and economists that the growth and the stock market are not sustainable.
* These days people seem to have stopped associating the word bubble with China.
Not only that. There are now theories that China could decouple from the US.
* If it looks like a bubble, walks like a bubble, and quacks like a bubble, it's a bubble!
* The most dangerous phase is when nearly everybody buys into the thinking that it can only go up!
Remember: the herds never got it right; they are to be slaughtered!
Notes:
* The US consumers make up about 30% of world GNP.
* The Chinese consumers are about 10% of the US's.
* Therefore, a 1% drop in the US will need to be compensated by a 10% rise in China. Is that possible? Well, probably.
* But if the US drops by 3%, the Chinese will need a 30% of increase to balance out. That will be tough.
* Not to forget about this 'vacuum' effect. When the music is playing and the government keeps spending, everybody makes easy money.
* The biggest spending programmes in China right now are: the Olympics and the Three Gorges Dam. When are they going to be completed? Well, within 2008.
* Just not too long ago, you heard people saying that China is a bubble. You heard from the media and economists that the growth and the stock market are not sustainable.
* These days people seem to have stopped associating the word bubble with China.
Not only that. There are now theories that China could decouple from the US.
* If it looks like a bubble, walks like a bubble, and quacks like a bubble, it's a bubble!
* The most dangerous phase is when nearly everybody buys into the thinking that it can only go up!
Remember: the herds never got it right; they are to be slaughtered!
Friday, 18 January 2008
Timing the Chinese Bubble, Part II
Source: Boon
The Hang Seng went down by more than 5% today -- a plunge of nearly 1,400 points. Is a big miss for me. My feed for the HSI is not yet ready and there's still some homework for me to do before I could provide any meaningful strategy. However, it does seem that the best point of entry, as far as I am concerned, for shorting the HSI is already gone.
The Hang Seng went down by more than 5% today -- a plunge of nearly 1,400 points. Is a big miss for me. My feed for the HSI is not yet ready and there's still some homework for me to do before I could provide any meaningful strategy. However, it does seem that the best point of entry, as far as I am concerned, for shorting the HSI is already gone.
Timing the Chinese Bubble, Part I
Source: Boon
Few days ago I posted the above note, saying that I didn't think the Dow and the S&P 500 had hit their bottoms. As what I had anticipated, both indices continued drifting lower following my posting, which preceded the disappointing US jobs report -- that I had also predicted back in September 2007. The Dow has now retraced more than 1000 points.
Now, I would like to take this opportunity to say that I am currently speculating the possibility of a collapsing Chinese stock market. Let me stress that this is still a speculation, as far as I am concerned. There is some homework I need to do before I could elaborate on my thinking further.
to be continued...
Few days ago I posted the above note, saying that I didn't think the Dow and the S&P 500 had hit their bottoms. As what I had anticipated, both indices continued drifting lower following my posting, which preceded the disappointing US jobs report -- that I had also predicted back in September 2007. The Dow has now retraced more than 1000 points.
Now, I would like to take this opportunity to say that I am currently speculating the possibility of a collapsing Chinese stock market. Let me stress that this is still a speculation, as far as I am concerned. There is some homework I need to do before I could elaborate on my thinking further.
to be continued...
Thursday, 17 January 2008
Americans pay for housing boom's excess
Source: By MADLEN READ and JOE BEL BRUNO, AP Business Writers
Wed Jan 16, 4:37 PM ET
NEW YORK - The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.
JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.
Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses — and that number will likely grow as the year wears on.
Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it — a recession, slowdown or even the makings of a depression — it's clear banks are under mounting pressure to be more cautious about lending.
"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."
He and others are paying close attention to what top U.S. banks say about their customers' payment habits. Many view this as an early indicator about where the overall economy is headed, but there are other signs that are troublesome.
The stock market has had its worst start to the year in three decades, with investors rattled by signs from the Labor Department that unemployment is on the rise and retail sales are on the decline. Further, the Commerce Department reported Wednesday that higher costs for energy and food in 2007 pushed inflation for the year up by the largest amount in 17 years.
There was no sign of a turnaround in the last few months of the year. The Federal Reserve reported that the economy grew at a slower pace in late November and December as credit problems intensified and consumers tightened their spending.
To some, it appears that the Fed came to its rate-cutting decision in August a bit too late. Others point to the falling dollar and surging oil prices, factors that usually prevent the central bank from easing its monetary policy.
While debate persists about the Fed's timing and the extent of the slowdown, bank executives — who have scrambled to prepare for another tumble in home prices and higher unemployment in 2008, feel academic definitions are beside the point.
"We're not predicting a recession — it's not our job — but we're prepared," JPMorgan Chase CEO Jamie Dimon told analysts after the nation's third-largest bank wrote down $1.3 billion and said profit dropped 34 percent.
His financial institution didn't do all that bad. Rival Citigroup Inc. fared the worst during the fourth quarter, losing $9.83 billion after writing down the value of its portfolio of mortgage and mortgage-backed products by $18.1 billion.
Wells Fargo, a more traditional bank that avoided last year's trading woes, saw its profit fall 38 percent due to troubles with home equity loan and mortgage defaults.
JPMorgan is girding for home prices to decline further in 2008 by 5 percent to 10 percent; Citigroup's estimate of 7 percent falls within that range, too.
"The banks are the infrastructure for everything, the heartbeat of the market," said Chris Johnson, president of Johnson Research Group. "They need to be fixed before the market, and economy, can move forward with confidence. They need to get all their dirty laundry out there."
Banks and card companies like American Express Co. — which warned last week that it would add $440 million to loan loss provisions — said in the regions where home prices are declining, card default rates are rising faster. The same goes for auto loans, subprime mortgages and home equity loans in these areas, which include Florida, Michigan and California.
A big reason for the rise in credit card default rates is that they are returning to more usual levels following a change in bankruptcy law that sent rates lower for a time. But the fact that more losses are being seen in the weaker parts of the country shows the increase is economically driven as well.
Analysts believe this means one thing: Consumers will be the ones paying for years of lax lending standards by U.S. financial institutions. Many will become more restrictive about who gets credit in a bid to stem future losses — and that could curb consumer spending, which accounts for more than two-thirds of the economy.
"We've pushed the envelope," Johnson said. "Along with the joy of a market that goes as high as ours is the agony of when it starts to correct itself."
Wed Jan 16, 4:37 PM ET
NEW YORK - The bill for America's excessive borrowing during the housing boom has arrived, and more people are having trouble paying it.
JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation's biggest banks, on Wednesday joined a growing chorus warning that the subprime mortgage mess is just the start of a sweeping lending crisis. And some fear that consumers falling behind on all kinds of loan payments could tip the economy's scale toward recession.
Strapped consumers are having a tough time making payments on credit cards, home-equity loans, and even for their cars. This has caused three of the top five U.S. commercial banks that have already reported damaging fourth-quarter results to set aside some $12.5 billion to cover future loan losses — and that number will likely grow as the year wears on.
Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it — a recession, slowdown or even the makings of a depression — it's clear banks are under mounting pressure to be more cautious about lending.
"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."
He and others are paying close attention to what top U.S. banks say about their customers' payment habits. Many view this as an early indicator about where the overall economy is headed, but there are other signs that are troublesome.
The stock market has had its worst start to the year in three decades, with investors rattled by signs from the Labor Department that unemployment is on the rise and retail sales are on the decline. Further, the Commerce Department reported Wednesday that higher costs for energy and food in 2007 pushed inflation for the year up by the largest amount in 17 years.
There was no sign of a turnaround in the last few months of the year. The Federal Reserve reported that the economy grew at a slower pace in late November and December as credit problems intensified and consumers tightened their spending.
To some, it appears that the Fed came to its rate-cutting decision in August a bit too late. Others point to the falling dollar and surging oil prices, factors that usually prevent the central bank from easing its monetary policy.
While debate persists about the Fed's timing and the extent of the slowdown, bank executives — who have scrambled to prepare for another tumble in home prices and higher unemployment in 2008, feel academic definitions are beside the point.
"We're not predicting a recession — it's not our job — but we're prepared," JPMorgan Chase CEO Jamie Dimon told analysts after the nation's third-largest bank wrote down $1.3 billion and said profit dropped 34 percent.
His financial institution didn't do all that bad. Rival Citigroup Inc. fared the worst during the fourth quarter, losing $9.83 billion after writing down the value of its portfolio of mortgage and mortgage-backed products by $18.1 billion.
Wells Fargo, a more traditional bank that avoided last year's trading woes, saw its profit fall 38 percent due to troubles with home equity loan and mortgage defaults.
JPMorgan is girding for home prices to decline further in 2008 by 5 percent to 10 percent; Citigroup's estimate of 7 percent falls within that range, too.
"The banks are the infrastructure for everything, the heartbeat of the market," said Chris Johnson, president of Johnson Research Group. "They need to be fixed before the market, and economy, can move forward with confidence. They need to get all their dirty laundry out there."
Banks and card companies like American Express Co. — which warned last week that it would add $440 million to loan loss provisions — said in the regions where home prices are declining, card default rates are rising faster. The same goes for auto loans, subprime mortgages and home equity loans in these areas, which include Florida, Michigan and California.
A big reason for the rise in credit card default rates is that they are returning to more usual levels following a change in bankruptcy law that sent rates lower for a time. But the fact that more losses are being seen in the weaker parts of the country shows the increase is economically driven as well.
Analysts believe this means one thing: Consumers will be the ones paying for years of lax lending standards by U.S. financial institutions. Many will become more restrictive about who gets credit in a bid to stem future losses — and that could curb consumer spending, which accounts for more than two-thirds of the economy.
"We've pushed the envelope," Johnson said. "Along with the joy of a market that goes as high as ours is the agony of when it starts to correct itself."
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