The Times quotes economists who say the economy’s probably not going to slow that much, though in its own analysis the paper gets at why this downturn is likely to be worse than the last.

What is shaping up as the second recession of the 2000s is the product of declines in home values, which play a far bigger role in most Americans’ personal finances than the stock market. Households have borrowed against the increased value of their property to buy cars, send their children to college and add home theater systems.

“This is the bedrock asset for the lion’s share of the population of the United States,” Mr. Barbera said. “It’s not like dot-com stocks, where I bought Webvan for 1,000 times the imaginary earnings, and now it’s worth nothing but I go and have a beer. You’re talking about the value of people’s houses.”

The story does note the drop in economic bellwether FedEx’s profits and outlook. The WSJ’s incomplete story tells us FedEx’s profit fell but not by how much. That’s kind of a key piece of info there.


France invades Spanish utilities


The WSJ fronts and leads its Business & Finance column with a scoop today that the French state utility company and a Spanish construction giant are teaming up to bid more than $100 billion for two Spanish utilities.

The paper says regulators are likely to raise serious questions about the cross-border deal, but if completed it would “reshape the European energy landscape”

Thank God it’s (Good) Friday

The Dow whipsawed—again—gaining 261.66 points (2.2 percent) this time on huge jumps in financial-sector stocks, which were up about 7 percent. Nasdaq was also up 2.2 percent while the S&P 500 popped 3.2 percent.

But there will be no huge swings today, mister! Markets are closed in observance of Good Friday, something Bloomberg says has been observed since the (other) Panic of ’07.

Fed meds do the trick

Bloomberg says “the biggest commodity collapse in at least five decades” may mean the Fed has really removed much of the doubts about Wall Street’s solvency. A commodity-price index fell more than 8 percent this week.

“Clearly they’ve gotten some stability,” said Keith Hembre, a former Fed researcher and chief economist at FAF Advisors Inc. in Minneapolis, which oversees more than $107 billion in assets.

“You have to stand back and say, for the time being, it looks to be a pretty successful combination of moves that have worked.”

The WSJ says Wall Street is unloading its junk debt on the Fed quickly. So far they’ve borrowed more than $13 billion a day from the new program. The paper implies the Street isn’t being totally forthright (shock!) about the extent of its borrowing:

Some Wall Street executives have suggested they were using the overnight-lending program to borrow small amounts, but the size of the total borrowing suggests broader interest from the 20 securities dealers eligible for the loans.

The Europeans were also forced to dump money into the markets on problems with German giant IKB Deutsche Industriebank and further “rumors about banks’ creditworthiness proliferating and banks hoarding cash,” the WSJ says.

Short-term Treasury yields fell to fifty-year lows as investors sought the safety of government money.

Who, me?

Alan Greenspan continues his worldwide “I Didn’t Do It” tour, telling The Washington Post he’s not to blame whatsoever for the state of the financial system just a few days after absolving himself (or at least not implicating himself) on the Financial Times’s opinion pages.

Murdoch in talks on Newsday? Oy.

Tribune Company reported a $79 million fourth-quarter loss and sharply lower revenues yesterday and said it may have to sell assets because its position has deteriorated faster than it expected. Papers also report that barons including Rupert Murdoch, Mort Zuckerman, and Cablevision’s beloved Dolan family are in talks about purchasing Newsday, something that could bring about $400 million dollars.

The Chicago Tribune reports that Trib revenues were down 7 percent from a year ago.

We’re shocked, shocked!

The WSJ on C6 reports that a Penn State study finds that Wall Street analysts routinely overestimate companies’ future earnings, something researchers say reflects bias “by their employers, who want them to hype stocks so that the brokerage house can garner trading commissions and win underwriting deals.”

The report, which examined analysts’ long-term (three to five years) and one-year per-share earnings expectations from 1984 through 2006 found that companies’ long-term earnings growth surpassed analysts’ expectations in only two instances, and those came right after recessions.

Over the entire time period, analysts’ long-term forecast earnings-per-share growth averaged 14.7%, compared with actual growth of 9.1%. One-year per-share earnings expectations were slightly more accurate: The average forecast was for 13.8% growth and the average actual growth rate was 9.8%.

Unemployment: the next big thing

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.