Buckle Up -- We Haven't Reached Bottom Yet

By Steven Pearlstein
Wednesday, October 15, 2008; D01

In the wake of an unprecedented, coordinated effort by governments around the world, the global financial meltdown has been contained, at least for the moment. Amazing what you can accomplish with a mere $2 trillion!

If we're lucky, the panic phase of this crisis may be over -- the hoarding of cash, the tidal waves of forced selling and indiscriminate liquidation. As the various initiatives are put in place over the coming weeks, credit should begin to flow more freely again through the financial system and out to the wider economy.

There is no guarantee that the panic won't return, but certainly there is nothing that makes it inevitable. What is significant is that governments have now established that they are willing and able to do whatever is necessary to prevent the financial system from spinning out of control, which is crucial to putting a floor under investor and consumer confidence.

Do not confuse this moment of calm with a stock market bottom or a sign that a serious recession has been avoided. (more...)