Sep 30, 2008 11:19 am US/Central
Anxiety Persists For Chicago Investors
Trader: 'The Banking System Needs To Continue So That We Have An Economy'
CHICAGO (CBS) ―
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While stocks staged a partial rebound Tuesday, the financial markets remain troubled and anxiety is running high at the Chicago Board of Trade and around the country.
CBS
While stocks staged a partial rebound on Wall Street Tuesday, the financial markets remain troubled and anxiety is running high across the country, particularly in the Loop financial district.
As CBS 2's Joanie Lum reports, the mood was somber Tuesday morning along LaSalle Street. There was disappointment at Congress' failure to pass the $700 billion plan to rescue the nation's banks. Chicagoans are expecting a direct effect on their accounts, wondering how badly they will be hit.
Business was more serious than ever for people entering the workplace at the Board of Trade.
"You can see it in people's faces," said stock floor runner James Jasso.
"I think everyone's a little bit scared," said stock trader Richard Herdrich. "I think it's a hard time for everybody."
"Very sad, you know, frightened," said futures trader Anthony Glass. "People are very worried about their jobs."
Word of the no vote sent the Dow Jones industrials plummeting 777 points, and business across the country went into a panic. Traders said vote knocked down the nation's economy.
"The banking system needs to continue so that we have an economy," Herdrich said, "and without it, you're not going to be able to buy a house, you're not going to be able to buy your car, and that's the problem."
Kathy Knorr has already calculated her losses.
"I'm retirement age. I'm not going to be able to retire for another five years," Knorr said. "It's much larger than me, it's much larger than my family. It affects all of Chicago, it affects all the states, it affects the world."
Even with all the uncertainty, some analysts say there are some positive developments.
"Crude oil is down $10 a barrel. Gasoline dropped 30 cents a gallon on the wholesale level," said Sterling Smith, vice president of Futures One. That's something that is directly good for the economy that will help people right here, right now."
Nonetheless, the analysts at the Board of Trade say they will be enduring continuous anxiety until Congress takes action again.
LaSalle Futures Market Strategist Matt Zeman said Monday afternoon that action needs to be taken, and fast.
"Fear is very pervasive in the market right now. People just willing to pull the trigger and sell – get out, get out, get out, and we see a landslide like we saw today," said LaSalle Futures Market Strategist Matt Zeman. "I'm not a fan of government intervention, but something has to be done to get the credit markets working correctly again."
Zeman says if no action is taken at all, businesses will not be able to fund their day-to-day operations, and it will become even harder for consumers to get their mortgages. And while economists are often issuing reminders that the current situation falls far short of the depths of the Great Depression, comparisons to the financial horrors of the 1930s are being issued constantly.
Market analysts said the financial rescue plan was not the perfect fix, but might at least have gotten the economy started toward recovery.
CBS 2's Joanie Lum and Vince Gerasole, and the Associated Press contributed to this report.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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