"They Just Don't Get It" Wails Wall Street
They Just Don't Get It
By Steven Pearlstein Tuesday, September 30, 2008; D01
That is the technical economic term that best sums up a day in which the House of Representatives refuses to pass a $700 billion rescue plan pushed by the White House and congressional leaders from both parties, Wachovia is taken over in a deal that will have the government potentially owning 10 percent of Citigroup, a few European banks fail, the Federal Reserve and other central banks are forced to inject an additional $300 billion into the global banking system, the Dow Jones industrial average plunges 778 points, and investors everywhere rush to the safety of gold and short-term Treasury bills.
The basic problem here is that too many people don't understand the seriousness of the situation.
I enjoy Steven Pearlstein and have lauded his wisdom and clarity many a time---but on this issue he is absolutely de…