Mr. Bush Is Desperate to Leave before the Wall Street Curtain Falls
Signs Are Pointing South on Wall St. Credit Woes Foster Bets on Bad Times
By Neil Irwin Washington Post Staff Writer Tuesday, November 27, 2007; A01
Wall Street is betting on a recession.
Investors in stocks and bonds are paying prices that indicate they believe a snowballing housing crisis and worsening credit crunch will soon tip the U.S. economy into a recession, analysts said. Many economists, including leaders of the Federal Reserve, don't think things will get that bad, but some say the risk of a serious downturn has risen in recent weeks.
Investors were so eager to buy ultra-safe government bonds yesterday that they were willing to accept sharply lower interest rates. The rate on the 10-year Treasury bond fell to 3.84 percent from 4 percent Friday. The low rates indicate investors expect the Federal Reserve to cut interest rates aggressively in the coming year to ease the pain of recession.
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