On top of that, President-elect Barack Obama and his wife Michelle made a symbolic night visit to the Lincoln Memorial in Washington last week.

Great presidents, it is said, are made, not born. Like Lincoln with the Civil War to save the union or Franklin Roosevelt with the Great Depression and World War II, to achieve greatness requires a time of great national trial.

The huge and bipartisan enthusiasm for the new president (58 percent of McCain voters told pollsters last week that they wanted Obama to succeed) points to the massive expectations that await his presidency. But it also points to the widespread perception that he faces extraordinary challenges.

The current global financial crisis would seem to qualify as a great national trial, although it is not yet as deep as the recessions of 1981 or 1946. But it certainly is heading that way. The worldwide impact of America's banking crisis could well make the Crash of '08 into our own era's equivalent of the Depression of the 1930s.

We do not yet know how the trials of the economy, both national and global, will unfold. On the one hand, there are signs that the credit crunch may be easing and that bank lending is moving again, albeit sluggishly, and that the housing crisis may be bottoming out.

It should. The key fact to bear in mind is that today's U.S. population of 303 million will be 333 million in 2019 -- a growth of 1 percent in a decade. In 2010 there will be 43.051 million Americans between the ages of 20 and 29, the key cohort for household formation. By 2015 there will be 44.005 million people in that cohort.

This should translate into a need for around 500,000 housing units by 2015 for first-time buyers alone. A broad assessment of changes in the numbers and age distribution and marital-divorce habits of the adult population suggests the growth in the number of households in 2010-2020 should be about 14.4 million to 14.5 million. This is a significant increase on the 12.6 million new households formed in 1995-2005.

That means there is a great deal of pent-up demand coming into the housing market in the medium term.

"The housing problem does not get fixed until we clear the inventory," says Nicolas Retsinas, director of Harvard's Joint Center for Housing Studies and an Obama adviser. He's right, and there are several ways to achieve this.

The first is through economic growth, which is expected to come from the infrastructure investment and stimulus packages. Then there are proposals for tax rebates for buyers, like the National Association of Homebuilders' plan to extend the first-time buyer's tax credit to all buyers, which will be worth $10,000 to a maximum of $22,000.

Lower interest rates should help, and qualified borrowers can now get a fixed-rate 30-year mortgage for as little as 5 percent interest. But they are not easy to obtain. More help should come from the collapse of new construction. Housing starts fell in October to 433,000, their lowest level since records first were kept in 1948. With new household formation running at about 1.3 million to 1.4 million a year, the backlog of unsold homes from the current 11 months could fall to an average six months within two years or less, so long as the foreclosure rate is reduced. That will depend less on market forces than on state and federal action.

But housing is only part of the problem. There is also a vast sum of pent-up losses about to hit the stricken banking system. Goldman Sachs earlier this month estimated the total credit losses from this crisis. They reckoned these would be $1.1 trillion from residential mortgages, $390 billion from corporate loans and bonds, $234 billion from commercial real estate, $226 billion from credit cards, and $133 billion from auto loans.

That makes for a total of close to $2.3 trillion, shared among banks and investors worldwide, so roughly half of the losses will be for U.S. banks, although they likely also will suffer losses on overseas loans.

There is currently a big debate under way among Obama's financial advisers on the best way to tackle this looming new banking crisis. One group, looking back to the way the Resolution Trust Corporation handled the savings and loan crisis of the 1990s, wants to corral all the banks' toxic assets into a new "bad bank." The problem is what price the government should pay for these assets, which are close to worthless now but might recover once the economy turns the corner. Pay too much, and the taxpayer loses out. Pay too little, and the banks will not be helped.

Another group wants to follow the British government model of encouraging the banks to start lending again by offering federal insurance against the loans defaulting. That is not just an open-ended commitment, it is a gamble that the economy will stay healthy enough for most of those loans to be good.

The real problem here is that the banks are torn two ways by the government. On the one hand, the government wants the banks to start lending again; on the other, it insists that the banks build up their capital as a proportion of their loans. The banks cannot do both.

Deciding which course to take, and understanding that each of them is something of a gamble, will be Obama's first big decision. He is likely to have to make it this month. It is likely to be as big a decision as Lincoln's response to the attack on Fort Sumter, or as FDR's departure from the gold standard. If the crisis makes the presidency, Obama is going to be defined by the course of the global economy.

And most of the world, and almost all Americans, are willing him to succeed.

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