...an unusually high percentage of the world's large countries and major U.S. trading partners are currently experiencing a recession.

The Financial Stability Plan, initiated under the belief that "[t]here is more risk and greater cost in gradualism than in aggressive action," has several features.

The Federal Reserve Board has used Section 13(3) of the Federal Reserve Act to create several new lending facilities to address the ongoing strains in the credit market.

Current slack in the economy may be caused primarily by the construction sector.

Recovery of the construction sector seems a necessary ingredient for a strong and sustained recovery of economic activity and a reduction in the unemployment rate.

This national outlook masks significant variation among states in their paths to recovery.

Despite the recent recovery in house prices, most state economies have yet to recover from the Great Recession.

The Fed’s concern for housing is a relatively new phenomenon. Historically, house price bubbles have been localized and affected only areas with rapid growth. The latest housing bust, however, was a nationwide problem with important ramifications for employment and economic activity.

Compared with previous recessions, the manufacturing sector does not show much slack. The construction sector, on the other hand, is below potential.

While the data seem to suggest that lenders did the right thing by tightening standards and increasing denials...the ongoing financial crisis suggests that they did not tighten them enough.