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Last Updated: Wednesday, 23 January 2008, 20:27 GMT
Recession fears chill Wall Street
By Laura Trevelyan
BBC News, New York

Robert Neil
It doesn't matter about the housing market if people are spending
Robert Neil, commodities broker

On this cold, clear day on Wall Street, the sharp wind makes the huge American flag outside the stock exchange flutter.

Shares have fallen for the sixth day in a row, and the sense of underlying anxiety over the state of the us economy is palpable.

But there is also a bullishness, and a feeling that by cutting interest rates sharply on Tuesday the US central bank staved off market meltdown.

Robert Neil, a commodities broker, is in the optimistic camp.

"I don't see a recession," he says.

"I see a lot of spending going on. It doesn't matter about the housing market if people are spending. You guys ate breakfast this morning, right?"

Short recession

Tim Hardy, a computer software engineer on Wall St, is not so sanguine.

How does he rate the prospects for the us economy?

Caroline Cheng
People are afraid, and the market shows that, but it won't be forever like this
Caroline Chang, foreign exchange professional

"Not too good, not too good. I'm losing money," he says.

The steepest cut in interest rates for more than 20 years has temporarily reassured the markets, Mr Hardy says.

Yet consumer debt is high and food and fuel prices could go up.

Caroline Chang, who works in foreign exchange, agrees the interest rate cut will help in the short-term.

She predicts the US federal reserve will cut interest rates again before the end of the month.

"They really face a very critical situation," she says.

The sub-prime crisis, sparked by the industry lending extensively to people who could not afford to pay their mortgages, is very serious, says Ms Chang.

But she predicts the recession, which many are expecting "will be short term".

"Right now people are afraid, and the market shows that, but it won't be forever like this."

Do not panic

Richard Gregory
We need to do what we can and hunker down
Richard Gregory, Sons of the American Revolution

Wall street has been through plenty of ups and downs before.

he depression of 1929 was the worst of times here.

Richard Gregory, executive director of the Sons of the American Revolution in New York, a historical association, has - as you might expect - a sense of perspective.

"The American public has to realise that this is the kind of rollercoaster we've been used to for centuries," he says.

"At this point we need to do what we can and hunker down."


FTSE 100
22.84 0.42%
18.55 0.32%
Cac 40
14.37 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
Data delayed by at least 15 minutes

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