September 17, 2008
By ERIC TORBENSON and BRENDAN M. CASE
The Dallas Morning News
It's been a shocking week on Wall Street ... and it's only Wednesday. Now the question is how much the financial crisis will batter already skittish consumers on America's Main Streets. . .
Consumer spending, the economy's lifeblood, was anemic even before this week. With the all-important holiday shopping season about to begin, one concern now is how consumers will react to the plunges they've just witnessed in their 401(k) retirement accounts and other investments.
"It hasn't shaken Main Street nearly as much as Wall Street," said economist Mike Davis of Southern Methodist University, referring to the months of turbulence in financial markets. "But unless the financial markets and the housing markets stabilize, that's got to be reverberated back to the other aspects of life in the economy.
"The worst-case scenario is that this is a black hole," he said. "I don't mean to be scary, but that's the analogy: that these dominos, this house of cards, begins to fall apart."
Mr. Davis said he doesn't see that as the most probable outcome.
Instead, he said, we may be nearing a turning point after which things start getting better.
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