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LIANE HANSEN, Host:

From NPR News, this is WEEKEND EDITION. I'm Liane Hansen.

HANSEN: on the state of the economy and on the housing market.

NPR's Scott Horsley begins by reflecting on the past week and what may be coming next.

SCOTT HORSLEY: The turmoil began a week ago today, when JPMorgan Chase announced it was buying Wall Street rival Bear Stearns for the shockingly low price of $2 a share. The Federal Reserve helped bankroll the takeover in order to keep Bear Stearns from going bankrupt and potentially seizing up the whole financial system. That was just the beginning of the Fed's aggressive moves last week.

Chief financial economist Brian Bethune of the forecasting firm Global Insight says the Fed also opened its discount window to investment banks for the first time since the 1930s. That allows the banks to unload their out-of-favor mortgage-backed securities. Then on Tuesday, the Fed slashed interest rates by three-quarters of a percent.

M: There's been a lot of fireworks from the Fed in terms of really stepping up to the plate here and dealing with these issues.

HORSLEY: By week's end, investors seemed to be drawing some confidence from the Fed's moves. But reports this coming week on February home sales are expected to show continued weakness in the housing market, and consumer confidence, already battered, is likely to fall even further. The overall picture is an economy in recession, Bethune says. What's less clear is how long it will last.

M: You know, we have this cumulative downward pressure that has been building up, and now we've got a substantial, you know, counterattack by the Fed to try and reverse it. So it remains to be seen over the next few weeks whether this is, you know, a key watershed, or whether it's simply just putting more fingers in the dike.

HORSLEY: Either way, Wall Street traders may need their Dramamine. The Dow Jones has already gained or lost more than 100 points on more than half the trading days so far this year.

Scott Horsley, NPR News.

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