Scrambling to Clean Up After a Category 4 Financial Storm

The global economy is in crisis, with giant financial institutions folding, banks refusing to lend to other banks and some countries closing, changing stock-market rules and currencies dropping in value. “What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen – paper losses measured in the trillions of dollars,” writes Steven Pearlstein for the Washington Post. Foreign creditors who have funded US debt will increasingly expect the country to live within its means and will expect higher interest rates for the increased risk. Many US jobs have emerged based on discretionary and impulse spending, and so Pearlstein warns that as Americans spend less and save more, a recession is inevitable. – YaleGlobal