New unemployment figures didn't help: 159,000 jobs were lost in September -- the highest number in more than five years. The unemployment rate held steady at 6.1 percent and it looks like the road to recovery will be a long one.
There was the growing job-loss numbers with the slide in home prices, auto dealers closing this week, and concerns about retail sales. Add all of those up and there are signs the economy is still in trouble. So the Federal rescue plan isn't a panacea.
"I think we're still heading into a recession. I think we're in the early innings of a recession, so it's going to be tough times," said Professor John Shoven, Ph.D., director of the Stanford's Institute for Economic Policy Research.
Shoven believes the rescue plan will help the troubled economy, but not solve all its problems.
The first thing consumers will see, is lenders willing to lend again -- for things like houses and student loans. And this will probably happen even before the estimated two to four weeks before the government starts buying the troubled securities.
"If they see you're going to be able to borrow tomorrow, if you're the person who wants to borrow tomorrow, I'll lend it to you today. I think it'll have a pretty quick effect on credit markets," said John Shoven.
However, the rescue plan is not going to turn around the housing market.
Remember the Bay Area median home price of $447,000 in August is 4.9 percent down from July and down a whopping 31.8 percent from a year ago in August.
"If we're lucky, housing prices will only fall another five percent, and we will work off the rather huge inventory of houses for sale, but that will take, I would say, a year," said John Shoven.
The rescue plan also isn't going to get consumers to spend money on big ticket items with jobs being cut and unemployment high.
As of August, more than 201,000 Bay Area residents are jobless, up from 149,000 a year earlier.
And what about all the retirement funds people have lost in the stock market?
"These wild swings in the market we've seen over the past couple of weeks will subside. The package will start to work, and we'll ease back to a market that will be more normal," said Eric Aanes, president of Titus Wealth Management.
Investment advisor Eric thinks that could take 12 months, however so much depends on creating jobs, getting people back to work, and restoring confidence to worried consumers.
Read David Louie's Back Story on the rescue plan: An Analysis of the Economic Crisis By Five UC Professors
