A Wall Street sign in New York City's financial district.
A Wall Street sign in New York City's financial district. - 
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Kai Ryssdal:We've come to that part of a Friday where we pause to reflect -- if that is the right word -- on the five days gone by. Here to help us with our Weekly Wrap of Wall Street and beyond are Leigh Gallagher from Fortune Magazine, also John Carney from Clusterstock.com. Hello to you both.

Leigh Gallagher: Hi, Kai.

John Carney: Thanks for having us.

Ryssdal: So we have to riff on the top of the news, obviously, to start with, John. And we'll go to you, just because. Let's see, the Citibank news this morning, the GDP news -- any surprise at all here to you?

Carney: The GDP news was horrific. And I think it was surprising that it was actually that bad.

Ryssdal: Well, Leigh, how much more of this can we take then, do you think?

Gallagher: You know, it was a big shocker today. You know, I don't know how much more we can take, but we will need to take more. I think the consensus is that -- is still -- that things are going to get worse, are likely to get worse, before they get better. I think, you know, we saw Bernanke's sobering assessment earlier this week that a full recovery is at least a year away and could be longer. And even that may be optimistic at this point.

Ryssdal: Just because we can, John, let me ask you to veer into this topic of nationalization and take off on that Citigroup news of today. Here now we're going to own 36-38 percent of this bank. We're going to, you know, replace half the board. But still, how much has really changed?

Carney: I think a huge problem with the kind of half measures that we've been taking so far is that we don't really change that much. Vikram Pandit Job, the head of Citi, is apparently perfectly safe. The entire upper management below Vikram Pandit -- the people who actually got Citi into the mess it's in -- they're not leaving, they're not being asked to leave, they're not being replaced. And in a sense what we've done is made the U.S. government a massive passive shareholder. We don't want the government running banks, but by kind of doing these half nationalization, you know, or what is it, a third nationalization now, we may be kind of enabling them to continue on with their problems without having to face up to how bad their balance sheet really is.

Ryssdal: Do me a favor though, John, and take a look at the broader spectrum here for a minute. We've got the Dow back to where it was in '97, '98. We've got housing numbers worse than we've seen in 25 years. GDP, obviously, we had this morning. It is almost list we're going backwards, isn't it?

Carney: If you had, you know, graduated from college in the mid-'90s and started doing what you were told to do, which was put away some money, save for the future, plug 10 percent of your income into your 401(k), you've basically just made no money at all in the markets. That's a really sobering, depressing thought and I think it actually will have a long-term implication for the way people invest in the future. We're always told, you know, invest for the long run. Well we've had the long run and it hasn't really gotten us anywhere. We've been running in place essentially.

Ryssdal: OK, so Leigh, that leaves it to you to provide the hoped-for optimistic bright note to end our conversation this week. I mean, if it is as bad as all that, there's got to be something good to come out of it.

Gallagher: Well, it's interesting. I mean, we actually have a story coming out in our issue that's out next week that points out that of these toxic assets that everyone's, you know, talking about on the banks' balance sheets, that's really the big unknown here. A lot of them are actually fairly valued or under-valued, which means that, you know, vultures are in fact already stirring to get their hands on some of this stuff. So that's a good thing. Now the bad point with that is that what is still unknown is the debt, or the defaults that might come from a whole other sort of black hold of debt, which involves credit consumer loans, commercial finance loans. So there's more stuff that could come up on the banks' balance sheets that we don't even know about yet.

Ryssdal: No, man. You were supposed to be the bright note. That was, that was, that was not the ender that I was looking for.

Gallagher: Here's a bright note. You know, I do think when Obama came out this week and addressed Congress, I think there was a message there that was, you know, we will recover. And I think that we really needed to here that. And that's a psychological thing, but I think that that went a long way to just sort of -- OK, let's just hold on and, you know, we are going to get out of this. But, you now, how the government deals with the banks is essential to the broad economic recovery. And that's the big question here: Are we going to nationalize or are we not. And, as John pointed out, the Citi move today was just more of the same.

Ryssdal: See, now you brought us up and then you brought up back down again. Leigh Gallagher at Fortune Magazine. John Carney writes for Clusterstock.com. Thanks guys.

Gallagher: Thanks, Kai.

Carney: Thank you.