Kudlow's Quick Take

October 10, 2008

The Light at the End of the Crisis

By Larry Kudlow

Fear and panic have taken over the stock market, the banking system, and the economy. It is one of those moments in history when people feel helpless, frustrated, and bewildered about what’s going on and why it’s happening.

Stocks are being pummeled in ways we haven’t seen in nearly a century, both here and overseas. The Dow Jones is down nearly 20 percent this week, its second worst week since December 1914. The S&P 500 dropped over 20 percent in what looks to be the worst week in the history of that index (going back to 1928).

Behind all this, the credit system is completely frozen. Banks are now loathe even to lend to each other in the overnight markets that are so vital to the daily financing of American business. And the profits outlook is deteriorating badly, sparking fears that we may have a deep and prolonged recession.

And yet, much good may ultimately come of this terrifying correction....

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