The World

President Bush is playing the role of Optimist in Chief. Mr. Bush praised the Federal Reserve and Treasury Secretary for the way they’re handling the situation. However, many investors already believe the US is in a recession. This Tokyo banker says the real question is how long this period of adjustment will last. He says March was a good month for many investors but looking ahead it makes him nervous and the recent Bear Stearns activity adds to that nervousness. In other words, it shows that US officials might know something that others do not know about what economic troubles lay ahead. This economist says the chief enemy for the global economy is uncertainty. If the pessimists are right and there are one trillion dollars of bad debts out there, this is only the beginning of the bad news. But the economist says what’s happening now is a self-perpetuating downward spiral, the expectation of crisis. He says reversing that psychology in the markets is tough because government interventions have focused on short term relief.

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