McClatchy reports: "For the second consecutive day, the Federal Reserve took bold action Wednesday in hopes of staving off a global financial collapse. And again U.S. financial markets failed to calm, extending losses for a sixth straight day while shrugging off a Fed-led, globally coordinated half-point cut in interest rates.

"Under normal circumstances, rate cuts are a cause for cheer because they lower the cost of borrowing for consumers and business, spurring economic activity. But these are far from normal times, and the fear running wild on Wall Street is proving difficult to contain.

"Yet ignoring the very rate cut they'd been clamoring for, traders in New York began selling stocks at the opening bell, and the Dow Jones Industrial Average plunged more than 200 points within a minute of opening. It bounced back and forth between loss and gain for much of the day before closing down 189.01 points to 9258.10. The S&P 500 finished off 11.29 points to 984.94, and the Nasdaq too was down 14.55 points to 1740.33.

"Few economists doubt the U.S. economy is in a recession, or soon will be. The psychology of a downturn is that bad economic news creates pessimism that leads consumers to reduce their purchases and businesses to postpone investment, which weakens the economy further.

Nouriel Roubini, an economist who was dismissted as an unwarranted doomsayer of the economic scene, had this to say: "Nouriel believes the recession began in the first quarter of this year and will stretch into early 2010 - at least.

"When asked if he had perhaps become too bearish recently and whether there's a possibility that he'll "miss the turn", the following response came:

I worry that things will actually get worse than I expect rather than the alternative. Look what's happened to the stock market for the last few days, the inter-bank market, credit spreads, the financial system is even worse than I predicted a few months ago.

I knew there was a systemic financial risk but the speed at which things have been unraveling has been worse than I expected. I don't think right now that any miracle is going to change things.

It's going to be ugly and if we manage it right, we're probably going to have a recession that is severe but not terrible. We'll have a financial crisis that is manageable, but, at this point, I don't think there is much reason to be optimistic I'm afraid.' "