Former US Treasury Secretary Larry Summers warned that the United States may be heading into recession as the biggest victim to date of the sub-prime mortgage debacle was humiliatingly sold for a token sum in Germany.
Traders are braced for another week of turmoil after the near breakdown of America's $2,200bn (£1,100bn) market for commercial paper.
"It would be far too premature to judge this crisis over," Mr Summers said. "I would say the risks of recession are now greater than they've been any time since the period in the aftermath of 9/11."
In Germany, it emerged that the state-bank SachsenLB may have accumulated $80bn of exposure to risky assets through a set of Irish funds kept off balance sheet.
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3 comments:
If these guys think we are "headed" for recession, they obviously haven't driven to Cleveland in a while...
Smart economist knew this would happen. Greenspan said this a few times as he watched the White House and big business spending. If only Americans had paid attention to Greenspan this wouldn't be a surprise but for those who put their heads in the sand and watch American Idol were surprised. We had a recession in the 80's as most Americans don't even know our history. So yes we will see a recession and big business with the rules that 109th Congress gave made this happen. The truth hurts and people who didn't pay attention should learn from this so it doesn't happen again.
Now headed for a recession?
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