A hardy perennial in sci-fi movies is the scene where people start firing ever-larger weapons at some alien object, only to see it wobble a little instead of getting obliterated as expected. I'm beginning to see the TED spread (432bp today) as one of those alien objects. I suspect that the probability of a recession is already so close to 1... that it's no longer possible to significantly increase it. But you know what I mean: Things are worse than expected, and they're likely to remain that way for the foreseeable future. We're in a vicious cycle: No one wants to lend going into a recession whose length and severity is likely to be unprecedented in the postwar era. So that's going to keep credit largely frozen -- which in turn will only exacerbate the recession's effect on stock prices. Governments might be able to prevent financial meltdown. But they can't prevent a major economic slump, or its reflection in the Dow.
