Wall Street

At its core, President Obama's overhaul of regulations for the financial industry seeks a fundamental change: Make the federal bureaucracy work for consumers, not just Wall Street. And Wall Street, not surprisingly, doesn't like it. Striking a populist tone, Obama complained in a White House speech Wednesday that average Americans were often baffled by such intricacies as the terms of credit cards, home loans and other financial products.

Jeanne Eslinger Branthover leans in and listens intently as a laid-off Wall Street executive describes how she's coping in a miserable job market. The woman, blindsided by her layoff from a big investment bank, tells how she puts on a business suit every day and diligently commutes into Manhattan to look for work. "Good girl, good girl," Branthover says. "At the end of the day, things are going to get better. You're going to get employed. It's just when, and don't give up on it."

Attempts to place blame for the great financial crisis that sent the economy into a nose dive last year have made household names of top executives such as Angelo R. Mozilo, Richard Fuld and Maurice "Hank" Greenberg. But the only major criminal case to emerge thus far from the global cataclysm involves two lesser-known hedge fund managers who will be thrust into the spotlight today when their trial begins with jury selection in a Brooklyn courtroom. Federal prosecutors allege that former Bear Stearns Cos. fund managers Ralph Cioffi and Matthew Tannin -- in a frantic, eventually unsuccessful scramble in mid-2007 to keep their mortgage bond funds from collapsing -- misled investors about the deepening woes in the portfolios.

Wall Street is looking forward to learning California's short-term borrowing plans -- once Sacramento produces a fiscal 2010 budget more or less in balance. The bond market has been expecting that the state would seek short-term financing to bridge the gap between current cash needs and future tax revenue. Normally, this kind of borrowing -- via so-called revenue anticipation notes, or RANs -- is no big deal.

The start of 2008 has brought a harsh reality to Wall Street: The U.S. may indeed be headed toward recession. So, after suffering punishing losses the first trading days of the year, the stock market will be seizing on any data or forecast in the coming weeks that can help investors determine whether their worst fears are coming to pass. And earnings are now part of the equation, with results from Alcoa Inc.

All last year, Countrywide Financial Corp. Chief Executive Angelo R. Mozilo insisted that the lender would survive the mortgage crunch. If he believed what he was saying, he grossly underestimated the market forces that were driving the company either into bankruptcy or, as happened Friday, into the arms of a deep-pocketed suitor: Bank of America Corp.

Stock prices rebounded sharply Monday after last week's market rout, boosted by better-than-expected profit at IBM. In a preliminary report, IBM said its fourth-quarter earnings rose 24% from a year earlier, exceeding the estimates of Wall Street analysts. The Dow Jones industrial average, whose 30 components include IBM, rose more than 170 points Monday. The index fell nearly 250 points Friday. "The market was pretty oversold," said Richard E.

As the stock market limped Friday to the end of an especially dispiriting week, it became clear that the recent grim economic news might not be the biggest factor depressing stock prices. Investors are now worrying that problems bubbling up in the markets for debt securities and financial derivatives could foreshadow a further deepening of the sub-prime mortgage crisis.

With Wall Street falling precipitously almost by the day, investors are asking what it will take to revive it. Market experts are increasingly coming to the same answer: time. There is no piece of economic data, no corporate earnings report, no move by the Federal Reserve and no government tax plan that will be able to soothe the market's anxiety in the next couple of weeks over the weakening economy. That's not to say the stock market will keep plunging the way it has been.

Investors are exhausted after their whipsaw week, and they're not ruling out another one. All the assumptions Wall Street made when it recovered from steep losses last week -- that the Federal Reserve will cut rates again, that President Bush's stimulus plan will proceed and that any recession that occurs might be shallow and quick -- are going to be tested. Tonight, Bush will make his State of the Union address.