The Great Depression It's Not
What if the end isn't near for the global economy?
By Jim O'Neill,  Newser User
Posted Mar 25, 2008 11:21 AM CDT
The Bear Stearns headquarters, center, and the JP Morgan headquarters, right, are shown on Monday, March 24, 2008 in New York.   (AP Photo/Mark Lennihan)
camera-icon View 4 more images

(Newser) – Certainly, the 8-month-old credit crisis is serious, but the market turmoil is unlikely to kick off the next Great Depression, financial markets editor Mike Dolan writes for Reuters. "You could be forgiven for thinking we will all soon be hoarding food and reverting to a barter economy," he snipes, but the real issue is psychological: "The problem is lack of confidence."

Investors are hoarding cash and extremely cautious about compromising liquidity. "They just need a catalyst to know when it is safe to go back into the markets," says a consultant. And the end may be in sight. Standard & Poors said earlier this month that after $285 billion in writedowns, most institutions appear to have purged their books of subprime toxins. Said one expert: “Every moment of crisis is always also one of opportunity."