We just have to ride it out
U.S. Treasury Secretary Henry Paulson is in Washington today to discuss his plan for avoiding another credit crunch. But Nancy Marshall Genzer reports the crisis is likely to last over the next couple of months.
U.S. Treasury Secretary Henry Paulson talks to Congress. (Alex Wong/Getty Images)
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Lisa Napoli: Today's the government released a newly revamped five dollar bill. But our currency sure needs a lot more than cosmetic surgery. The almighty dollar plunged today to a 12-year low against the yen, and record lows against the euro and the Swiss franc.
Meanwhile, today in Washington, the Treasury Secretary is about to propose ways to avoid another credit crunch in the housing market. Like national standards for mortgage brokers. Nancy Marshall Genzer looks at how this all might add up.
Nancy Marshall Genzer: It's another grim day for Wall Street. The dollar is down to a 12-year low against the Japanese yen. It's fallen to another record low against the euro. Oil prices are still headed up, with no end in sight. Banks are still reluctant to lend money.
Bernard Baumohl, chief economist of the Economic Outlook Group, says Paulson's plan is focused on preventing another subprime crisis. It doesn't help us now.
Bernard Baumohl: I think the crisis of confidence in the credit markets will probably be with us for the next couple of months. I don't see the proposal by Paulson as doing much to change that.
Baumohl says the economy will just have to ride out this rough patch. He says banks still have to unwind subprime investments and try to wipe this complicated slate clean. At that point, they'll be willing to lend money. Baumohl is expecting that to happen toward the first half of next year.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
