Quotes of the day

“‘We’re in the middle of a very dark tunnel,’ said Brian Fabbri of BNP Paribas, referring to the worsening credit crunch. ‘Each day we see another crack in the system.’

Those cracks are quickly adding up. On average, the 52 economists surveyed now expect U.S. gross domestic product to contract in the third and fourth quarters of this year, as well as the first quarter of 2009.

This is the first time that survey forecasts for those periods have turned negative. If those predictions bear out, it would mark the first time U.S. GDP — the total value of goods and services produced — has contracted for three consecutive quarters in more than a half century. Economists put the odds of recession in the next 12 months at 89%, up from 60% in last month’s survey.”

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“The British and American plans, though far from identical, have two common elements: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans…

The White House confirmed that the Treasury Department was considering taking ownership positions in banks as part of its $700 billion rescue package. But officials said the idea was less developed than the plan to buy distressed assets from banks through ‘reverse auctions.’

The goal, Treasury officials said, is a plan that would be broadly available to all banks, rather than through specific rescue packages negotiated on a case-by-case basis. That makes it likely that the government could afford to take only a small stake in any single institution.”

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“We are all socialists now.”