Changes

Hedge funds are private investment companies with $1.7 trillion in assets. They have lost $180 billion since July and some are near collapse. Investors are demanding their money back, and Wall Street in late October is bracing for a shake-out in the industry.<ref> Louise Story, "Citadel Chief denies rumors of trouble"  [http://www.nytimes.com/2008/10/25/business/25hedge.html?ref=business ''New York Times,'' Oct 24, 2008]</ref>

Hedge funds are private investment companies with $1.7 trillion in assets. They have lost $180 billion since July and some are near collapse. Investors are demanding their money back, and Wall Street in late October is bracing for a shake-out in the industry.<ref> Louise Story, "Citadel Chief denies rumors of trouble"  [http://www.nytimes.com/2008/10/25/business/25hedge.html?ref=business ''New York Times,'' Oct 24, 2008]</ref>

In late November the government announced an $800 billion plan to boost consumer credit and the market for mortgage-related securities. Plans call for the Federal Reserve in early 2009 to extend up to $200 billion in non-recourse loans to holders of asset-backed securities backed by highly-rated consumer and small business loans.<ref> "Non-recourse" loans means that if they are not paid back the borrowers cannot be sued for their other assets. Mortgages fall in this category, so that if people default they just walk away from the debt and never have to repay it. However it damages their credit rating.</ref> Treasury will contribute $20 billion in funds through its Troubled Asset Relief Program (TARP). The Federal Reserve also announced it will purchase up to $100 billion in GSE (government-sponsored enterprises, especially Fannie Mae and Freddy Mac) debt through a series of competitive auctions starting in December, 2008. The Federal Reserve starting in December will purchase up to $500 billion in mortgage-backed securities backed by GSEs such as Fannie Mae and Freddie Mac. Federal Reserve Chairman Ben Bernanke said the Fed is preparing to launch new liquidity programs to support the economy in addition to further slashing interests rates.  The total commitments by the government in bailoits and loan guarantees exceeded $7 trillion dollars, but the economy nevertheless continued to slip downward. Experts announced that a recession officially began in December 2007.<ref>Maya Jackson Randall, "Paulson Says Treasury Actively Mulling New Rescue Programs," [http://online.wsj.com/article/SB122816189458369851.html?mod=rss_Politics_And_Policy ''Wall Street Journal'' Dec. 1, 2008]</ref>

In late November the government announced an $800 billion plan to boost consumer credit and the market for mortgage-related securities. Plans call for the Federal Reserve in early 2009 to extend up to $200 billion in non-recourse loans to holders of asset-backed securities backed by highly-rated consumer and small business loans.<ref> "Non-recourse" loans means that if they are not paid back the borrowers cannot be sued for their other assets. Mortgages fall in this category, so that if people default they just walk away from the debt and never have to repay it. However it damages their credit rating.</ref> Treasury will contribute $20 billion in funds through its Troubled Asset Relief Program (TARP). The Federal Reserve also announced it will purchase up to $100 billion in GSE (government-sponsored enterprises, especially Fannie Mae and Freddy Mac) debt through a series of competitive auctions starting in December, 2008. The Federal Reserve starting in December will purchase up to $500 billion in mortgage-backed securities backed by GSEs such as Fannie Mae and Freddie Mac. Federal Reserve Chairman Ben Bernanke said the Fed is preparing to launch new liquidity programs to support the economy in addition to further slashing interests rates.  The total commitments by the government in bailouts and loan guarantees exceeded $7 trillion dollars, but the economy nevertheless continued to slip downward.<ref>Maya Jackson Randall, "Paulson Says Treasury Actively Mulling New Rescue Programs," [http://online.wsj.com/article/SB122816189458369851.html?mod=rss_Politics_And_Policy ''Wall Street Journal'' Dec. 1, 2008]</ref>

By early December the entire economy was heading downward with no bright spots. The recession that began in Dec. 2007 intensified, as retail sales plunged. In November 2008 Americans sharply reduced their consumer purchases. Sales of electronics and appliances sank 25% (compared to Nov 2007) Luxury goods were down 24%, and specialty retail, which includes clothing and department store sales, fell 20%. Auto sales were down 37% in November to the lowest rate in 26 years. GM down 41% Ford down 31% and the foreign cars were down just as much, with Toyota down 34%, Nissan down 42% and Honda down 32%.<ref> Stephanie Rosenbloom, "In November, Shoppers Cut Spending Even More," [http://www.nytimes.com/2008/12/03/business/economy/03shop.html?ref=business ''New York Times'' Dec. 2, 2008]; Nick Bunkley, "Another Month of Miserable Auto Sales," [http://www.nytimes.com/2008/12/03/business/03sales.html?ref=business ''New York Times'' Dec. 2, 2008].</ref>

==Collapse of #6 and #4 largest banks==

==Collapse of #6 and #4 largest banks==