NEW YORK - As credit freezes up and liquidity all but vanishes, there is an enormous temptation for financial institutions and investors to hold on to their cash and brace for the worst.

Governments around the world last week scrambled to reverse that lack of confidence by injecting trillions of dollars of cash into their banking systems, lowering interest rates and buying up commercial paper, but the more they scrambled, the further stock markets sank, and the more dire the global economic outlook appeared for the months and years ahead.

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