Stocks plunge around the world as fears of a U.S. recession continue to increase.

Stocks plunge around the world as fears of a U.S. recession continue to increase.

Stocks plunge around the world as fears of a U.S. recession continue to increase.

A summary of what's in the major U.S. newspapers.
Jan. 22 2008 6:05 AM

United We Fall

All the papers lead with yesterday's huge losses in stock markets around the world, which are seen as a sign of the globalized panic surrounding fears that the United States is headed for a recession. The Los Angeles Times notes up high that although foreign stock markets were already on a downward trend, many had losses of more than 5 percent yesterday and several countries experienced their biggest decline since Sept. 2001. How widespread was the sell-off? The Washington Postpoignantly notes that Sri Lanka  was the only country that saw its stocks increase yesterday. Attention now turns to the United States, where markets were closed yesterday but all signs point to a significant decline as soon as they open this morning. Both USA Todayand the Wall Street Journal point out major U.S. stock indexes have dropped around 15 percent from October, which puts them dangerously close to the 20 percent mark that analysts usually consider the sign of a bear market.

Although there used to be hopes that markets around the world would be able to withstand the pressures of a falling U.S. economy, those dreams seem to have gone out the window. "The angst about the United States belies the popular theory that Europe and Asia are not as dependent on the American economy as they once were," says the New York Times.This is certainly bad news for American investors who have been busy transferring their dollars abroad in the hopes that other markets would ride out a U.S. slowdown, notes the WSJ.The LAT points out that these kinds of foreign investments had become particularly popular in many 401(k) retirement plans, which means "the pain overseas will be felt keenly by American individual investors." The wide sell-off continued today as markets around the world kept on decreasing at staggering rates.

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If there's one clear trend among analysts it's that no one really knows when all this will end. "Where the bottom is now is anyone's guess," an analyst tells the Post. The WSJ says that the consensus seems to be that the stock markets will continue dropping throughout this week. The declines are also seen as a sign that investors don't really believe that President Bush or Congress really have a chance of helping the economy as a whole. Everyone points out Federal Reserve Chairman Ben Bernanke is now under more pressure to cut interest rates. Although some think the Fed could cut interest rates before next week's meeting, it "isn't considered likely, but can't be ruled out if markets suffer badly," notes the WSJ, pointing out that the move "could risk looking panicked." There's much talk that the Fed might decide on a three-quarter-point cut, which USAT says would be the largest single-day move since 1984.

On the political front, the WP reports that congressional leaders were watching the news out of the markets yesterday and considering altering the size and shape of their stimulus package. The LAT mentions, and the WSJ fronts a separate story on, how the tightening up of credit is making it more difficult for businesses, especially small ones, to borrow money. This is creating particular concern because "start-ups and small businesses are generally the companies that create jobs in a downturn," says the WSJ. The Post reminds readers that Republicans are pushing hard to include incentives for businesses and investors in the stimulus package.

The NYT, WP, and LAT all front last night's Democratic debate, where Sens. Hillary Clinton and Barack Obama traded particularly heated words. The two candidates "belittled each other as if opening their opposition-research files and flinging out the contents," says the LAT. The fighting began almost with the debate's opening bell and included mentions of Clinton's time on the Wal-Mart board and Obama's relationship with Tony Rezko, an indicted businessman. For his part, John Edwards was pretty much relegated to the sidelines and once reminded the moderator that "there are three people in this debate, not two."

At one point, Obama put on an exasperated tone and said, "I can't tell who I'm running against sometimes." The NYT notes the frequent mentions of the former president are part of Obama's effort to "re-enforce his view that he is facing off against a decades-old Clinton machine." In a Page One analysis, the Post says the former president "is playing a role almost akin to that of a vice presidential candidate in a general election" by frequently attacking his wife's rival. In a separate piece inside, the NYT says that Clinton's campaign in South Carolina "is essentially running Mr. Clinton against Mr. Obama," particularly since she will also be traveling to other states in the next few days. Her campaign insists she's not writing off South Carolina, but rather that she's focused on a national strategy. But it does seem to be an attempt to lower expectations for Saturday's vote, which many think Clinton will lose.

The Post goes inside with a look at how the campaigns are racking their brains to try to figure out how to best advertise before Super-Duper Tuesday on Feb. 5, when there will be contests in more than 20 states. Even the candidates who have raised lots of money, such as Obama and Clinton, will have to make every dollar count after lots of spending in the early contests. The paper notes that Mitt Romney has an advantage on this since he can always throw in some money from his personal fortune. At least two candidates are discussing the possibility of paying $2.7 million for a 30-second spot during the Super Bowl.

The LAT fronts an interesting look at how Iraq's vast archaeological sites are being ransacked by illegal diggers. There are more than 12,000 "largely unguarded" sites in Iraq, and many private citizens are walking away with important, and potentially valuable, pieces of the country's heritage. Although much was made of how the Iraqi museum was plundered in the early days of the war, some think more may have been unearthed at these sites than was ever in the museum.

Conventional wisdom says that if a Hollywood star gets sent to jail, the paparazzi would be all over that story, right? Think again. It turns out not all stars are equal. The LAT notes that no one seemed to care  when Kiefer Sutherland, the star of 24, walked away from prison Monday after serving 48 days on a DUI charge. It's all part of a trend of tabloids moving away from covering the older, more established celebrities. "The older you are, the less interesting you are," said a photo agency executive. "The young Hollywood starlets–that's what it's all about."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.