Why the credit crisis gift set is only going to get bigger

Aline van Duyn:

Looking for a souvenir of the credit crisis?

The Museum of American Finance, located on Wall Street, sells a set of five posters from its credit crisis exhibit.

"Depicts key events from February 2007 through early March 2009 and also features an overview of the crisis, important terms and explanations of key moments." At just $12, it is an affordable gift, too.

The problem with such posters is that they suggest the crisis is over.

But it is not, a fact that is starting to dawn on many investors. Until recently the market tone was being set by talk of "green shoots" and economic recovery. Now, there is more talk of weeds - or even manure when the state of the US economy is described.

That the crisis is not over is also clear from comments by policymakers.

Take, for example, the launch this week of the investment funds that will juice up returns with cheap loans from the US government and buy assets such as troubled mortgage-backed securities that banks may want to sell. The programme - the public-private investment programme (PPIP) - has been scaled back considerably, and a plan to use it to buy loans as well as securities backed by loans - called legacy securities or assets - has been iced. "While utilisation of legacy asset programmes will depend on how actual economic and financial market conditions evolve, the programmes are capable of being quickly expanded if these conditions deteriorate," the Treasury said. "Thus, while these programmes will initially be modest in size, we are prepared to expand the amount of resources committed."

So, what could make things worse?