Published: January 18, 2008
While the chairman of the Federal Reserve told Congress on Thursday that a recession can be averted, Wall Street sent Washington a different message: It's already here.
"All the momentum is pointing down," said Bruce Bittles, chief investment strategist at Robert Baird. "There's no way to sugarcoat that."
But the stock market is not the only part of the financial world that is pointing to trouble. The Baltic Dry index, a shipping index that is considered a leading indicator on the health of the global economy, has plummeted. And investors have fled high-risk corporate bonds, which can default in times of trouble...
Investors appear to be betting that those sectors will be hurt by a coming downturn, and are looking to get out...
Selling causes more selling. People panic and want to cut their losses," said David Kovacs, a quantitative investment strategist at Turner Investment Partners in Berwyn, Pennsylvania. "Every day now, you have more and more investors leaning toward the camp that yes, this is going to be a recession, and it could be a severe one."...
Indeed, losses accelerated throughout the session Thursday, with a flurry of selling in the final hour of trading.
Read more - http://www.iht.com/articles/2008/01/18/business/18cndstox.php
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