Wall Street firms see recession nearing

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Source: Reuters

NEW YORK (Reuters) - The economy might be edging toward a recession in the wake of mortgage-related credit woes plaguing the financial markets, bankers and analysts said on Monday.

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Charles Peabody, partner at New York-based research firm Portales Partners LLC, said the Fed may have to take more aggressive action and drop the benchmark fed funds rate in an effort to prevent a Japanese-style economic stagnation, which eventually evolved into a deflationary recession.

"We're moving into a recession, and over time -- the length of which is difficult to predict -- there is going to be a lot more credit problems," he said.

Read more: http://news.yahoo.com/s/nm/20071106/bs_nm/finance_summit_economy_dc