Crisis Ripple Effects: Pros Speak

With the financial crisis continuing to spread, CNBC asked the experts to weigh in on what it means for world markets, the economy and average investors.

'Government Using a Bazooka'

“We’re witnessing the U.S. government basically use a bazooka here, in terms of the arsenal it has to solve some of these systemic risks, and I challenge you…if you think there’s not another bank or insurance company or broker that’s not going to have some problems…There’s going to be more of these problems and the government is now not well-positioned to step in.”

Carlos Mendez, ICP Capital Senior Managing Director

'It's a Global Problem'

“It’s a global problem…You cannot say now that anything is a U.S. problem.  Look at the effect all over the world.  There’s a real effect in Israel as well.  The market went down yesterday quite sharply.  It also went down today in anticipation of what’s going to happen in the U.S. market.  For the short-term, it’s a global problem.  Probably after a few days, when the dust (settles), people will be able to see the economy itself and decide whether what’s happening in the U.S. should affect other countries.”

Ester Levanon, Tel Aviv Stock Exchange CEO

'It Caves In on Itself'

“If the weakness in the financial system begins to impede the ability for good-quality borrowers to borrow money, then deals don’t get done, expansions that were planned don’t happen, companies begin to horde capital, they put off hiring, they put off expanding, and it just caves in on itself.”

Mark Vitner, Wachovia Corporation

'We're Not Out of the Woods'

“The AIG rescue plan is basically firefighters…putting the fire out at AIG so it doesn’t spread to other homeowners, but we’re not out of the woods yet…Continue to be very careful with your financial stock selection (and) remain underweighted in that sector.  There are going to be continued problems, continued fallout.”

Benjamin Halliburton, Tradition Capital Management

'We Need Better Financing'

“For small businesses, for consumers, for the housing market, it’s not as bad as it appears on Wall Street right now, but still we need better financing, because the economy is actually positioned for a cyclical rebound.  If you look at the housing starts number, it’s very low, but it should bounce.  If you look at vehicle sales, they’re very low, but they should bounce also.  Same thing with inventories, but you need to finance a cyclical rebound. 

David Kelly, JPMorgan Funds

'Fundamental Shift in Values'

“The stock market continues, and investors continue, to want to believe that what they’ve seen in the past over the last 20 years is what they’re going to see in the future.  It isn’t so…Take the bond market, we’ve got a fundamental shift in values there, we’ve got a fundamental shift in the equity values.  I think we’re headed down a ways before we bumble on.”

Don Putnam, Grail Partners Managing Partner

AIG 'Not a Huge Help'

“The AIG issue may help a little bit, because it reduces uncertainty, but it’s not going to be a huge help.”

Mohamed El-Erian, Pimco Co-CIO & Co-CEO

More from CNBC.com:

• Spreading Financial Crisis Spooks Global Markets
• Pimco's El-Erian: AIG Deal "Not a Huge Help"
• Worst of Crisis Ahead, Mor Banks May Hit Trouble: IMF