Can the World Stop The Slide?

The U.S. is heading into its first recession in a truly globalized world. Here's what to expect --and why it will be different this time

Say what you will about today's global economy, it ain't dull. In a cascade of worry on a single trading day, Jan. 21, Hong Kong's Hang Seng index plunged 8.6%, Tokyo's Nikkei 5.7% and Mumbai's Sensex 12.9%. It was a worldwide mini-meltdown, and the Federal Reserve Board wasn't about to let that go unanswered. Before the U.S. markets had even opened, Fed Chairman Ben Bernanke--not a man known for dramatic gestures--slashed a key interest rate three-quarters of a percentage point. The surprise move arrested the rout, and the markets have since rallied, but investors are left to absorb an unavoidable truth:...

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