NEW YORK, Sept. 30, 2008
The Credit Crisis: A Look Ahead
Credit Markets Now At The Heart Of Financial Crisis
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Play CBS Video Video Market Meltdown Wall Street suffered its largest one-day drop following Congress' failure to pass a rescue bill, reports Anthony Mason. Harry Smith talks to members of Congress and the public about their reactions.
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Video Effects Of The Market Meltdown Economist Peter Morici explains to Maggie Rodriguez why the availability of credit is so important to our economy and what will happen to business who can't afford to bring goods to the market.
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Video Americans React To Congress As in Congress, real people have different ideas on what's best for stabilizing the economy. Harry Smith talks to people at the Tick Tock Diner in Clifton, N.J.
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(iStockphoto)
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Timeline Credit Crunch Feeling the squeeze? Here's a look at actions and statements from key players in Washington.
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Section Weathering The Downturn In this economy, it's smart to save. CBS News shows you how.
The stock market may have taken a history making nosedive, but as CBS News Business Correspondent Anthony Mason reports, what's really worrying Wall Street are the credit markets, which are now at the heart of this financial crisis.
The stock market went into shock when the bailout bill failed, because credit is the grease that keeps the economy going. But for more than a week now, the credit markets have been virtually frozen.
How long before the economy is in deep trouble?
"Well, we're already in deep trouble," according to Stephen Massocca of Pacific Growth Equities. "And you know -- when does it become cataclysmic? It's hard to see. I don't think anyone knows for sure."
Banks are reluctant to lend money even to each other. Businesses can't borrow the cash they need. Without relief, says economist Mark Zandi, Main Street could feel the pain soon.
"We're gonna see it in the form of rising unemployment, job losses, cutbacks, even bankruptcies," Zandi says.
And if you sense we're already in a recession, then you ain't seen nothing yet.
"This would deepen that recession and potentially deepen it to the point where you would see the kind of economic deceleration we haven't seen since the 1930s," Massoca said.
That's because businesses that can't get access to credit can't hire workers. And that puts the brakes on the entire economy.
That's why traders are saying, without the promise of some kind of rescue package soon, the stock market may be in for more rocky days ahead.
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