Let's not kid ourselves. If you're out for dinner or attending any social event this weekend, there will be talk of the football. The two division championship games are set for Sunday and the winners of each will head to the Super Bowl on February 3.
But after the Dow's 307-point drop on Thursday, a whopper of a loss, you may also hear talk of a recession—of growing concern among voters—and Washington's plan to stimulate the economy.
We know... the economy, ugh. But before your eyes glaze over, consider that the stimulus package could mean a government check in your hot little hand.
In a nutshell, here's what happened on Thursday:
It all came tumbling down
Before the markets even opened on Thursday, the beaten-down housing sector had more bad news—the number of new homes built last year fell to the lowest level in 16 years, indicating potentially bigger problems in the economy (fewer houses constructed equals fewer jobs, less materials ordered, less money being spent).
Then, the investment bank Merrill Lynch said it lost $10 billion last quarter and wrote off $15 billion in debt. Why? Because of bad credit loans made in the housing market (we wrote about this in August). It was the second major bank this week to report a dramatic loss and huge debt write-off, and the market didn't like it.
Meanwhile, President Bush spoke with Congressional leaders about a possible plan to help the economy. On Friday he's expected to lay out an economic stimulus plan aimed at giving taxpayers and businesses a break. You may recall the last stimulus package in 2001, after the Internet bubble burst, put $300 back in each taxpayer's pocket.
But the real whammy came later in the morning when Federal Reserve Chairman Ben Bernanke (the man in charge of the central banking system and key to U.S. monetary policy) told Congress the economy needs a boost. And while he said he does not expect a recession, he did say the boost should come "quickly."
What's a recession anyway?
In short this is when a country's gross domestic product (in a nutshell the value of everything we produce) drops for two quarters in a row or more.
The big picture
So how does all this impact you? Well, you might get a check in the mail that could mean a little or a lot depending on your financial situation. Whatever steps Bush and Congress take to help the economy will likely be subject to much bipartisan back and forth, especially considering this is an election year. But the fact that the president, the Fed Chief and Congress are all talking this means the economy is in need of some serious help. Basically, it's ugly and the scariest part is, no one knows how ugly it will get.
But after the Dow's 307-point drop on Thursday, a whopper of a loss, you may also hear talk of a recession—of growing concern among voters—and Washington's plan to stimulate the economy.
We know... the economy, ugh. But before your eyes glaze over, consider that the stimulus package could mean a government check in your hot little hand.
In a nutshell, here's what happened on Thursday:
It all came tumbling down
Before the markets even opened on Thursday, the beaten-down housing sector had more bad news—the number of new homes built last year fell to the lowest level in 16 years, indicating potentially bigger problems in the economy (fewer houses constructed equals fewer jobs, less materials ordered, less money being spent).
Then, the investment bank Merrill Lynch said it lost $10 billion last quarter and wrote off $15 billion in debt. Why? Because of bad credit loans made in the housing market (we wrote about this in August). It was the second major bank this week to report a dramatic loss and huge debt write-off, and the market didn't like it.
Meanwhile, President Bush spoke with Congressional leaders about a possible plan to help the economy. On Friday he's expected to lay out an economic stimulus plan aimed at giving taxpayers and businesses a break. You may recall the last stimulus package in 2001, after the Internet bubble burst, put $300 back in each taxpayer's pocket.
But the real whammy came later in the morning when Federal Reserve Chairman Ben Bernanke (the man in charge of the central banking system and key to U.S. monetary policy) told Congress the economy needs a boost. And while he said he does not expect a recession, he did say the boost should come "quickly."
What's a recession anyway?
In short this is when a country's gross domestic product (in a nutshell the value of everything we produce) drops for two quarters in a row or more.
The big picture
So how does all this impact you? Well, you might get a check in the mail that could mean a little or a lot depending on your financial situation. Whatever steps Bush and Congress take to help the economy will likely be subject to much bipartisan back and forth, especially considering this is an election year. But the fact that the president, the Fed Chief and Congress are all talking this means the economy is in need of some serious help. Basically, it's ugly and the scariest part is, no one knows how ugly it will get.
