Wall Street got its hopes up on Mar 11. Elated by a Federal Reserve move to stop the credit crunch, the US stock market posted its biggest one-day gain in five years, with the Dow Jones industrial average rising more than 400 points.
Look out, though. Fed officials are the first to acknowledge that their initiative attacks only one problem, the liquidity squeeze at big banks. It does nothing about the central risk to the US economy: an unprecedented crash in home values that is sapping households' wealth and confidence while putting an enormous strain on the banking system.
How bad will this downturn get? No one can know because we've never experienced such a headlong slide in the housing market - and this comes at a time when its current value of $20 trillion accounts for the vast majority of most families' wealth.
Right now most economists expect the US to experience a mild, short recession in 2008. But there is at least a possibility of a steeper decline that the traditional recession remedies - interest-rate cuts here, deficit spending there - won't be able to handle.
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