Is Financial Crisis Growing Worse—Or Is It Just Us

Big banks bleeding money. Fighting over the TARP money. Sinking stock market. A Treasury Secretary (or designate) under fire. Economy in decline.

Sound familiar?

What a difference three months doesn't make. Though no one one is saying the financial situation is as dire as late September, Happy New Year has quickly turned into deja vu in the past few days.

"You don’t have one big wave and everything goes back to normal," says independent bank analyst Bert Ely. "A big wave jars a lot of things loose."

If the collapse of Lehman Brothers and other events of last fall constitute a tsunami, the current wave may be scary but not nearly as dangerous, say experts.

There are some similarities in conditions and circumstances, but also some key differences—both good and bad.

"It's better in the sense in that we are not facing a freeze up of the financial system, which is why we had to run and pass the TARP," says Dean Baker, co-director for the Center for Economic Policy and Research. "The Libor problem is no longer an issue."

"Now we’re having the old fashion recession which is going to create the usual credit problems, "adds Robert Brusca, " chief economist at Fact & Opinion Economics. "That's got to create more credit problems and credit losses for banks."

source-cnn