Just a few notes...Jeff told me that Italy outlawed extreme skinniness...there are food shortage riots erupting globally...American farmers (or industrial agribusiness) are growing corn for biofuel (ethanol), although I have not seen one fueling station pumping ethanol or any ethanol-powered vehicles...in fact, many farmers are growing corn instead of soybeans which means there is also a cooking oil shortage globally...
Let's get down to brass tacks. It seems like the economy is declining rapidly. In fact, you might say that if the economy were a person, the entire body is in septic shock. I just read that retailers, especially stolid, popular ones (like Linens 'n Things, which I never heard of but read about yesterday also, which had been a major acquisition of some fuckhead private equity person who bought it by accessing debt then piling it onto the retail store which was second in revenue only to Bed Bath & Beyond. Now this fuckhead can't pay the debt costs so it's teetering on the edge of bankruptcy.) Too many parentheses. Whatever.
The problem with problems in retail for instance is that they're like the center of an umbrella with many spokes attached to them for dear life. Vendors, like fabric suppliers and manufacturers of chairs, blenders, aluminum siding (no, wait, that's not right), 600-thread Egyptian cotton sheets and many others are very worried they won't get paid so they stop shipping product. Bankers and other financiers see the piled up debt on top of Linens 'N Things straining like a flimsy rooftop covered with snow and they pull out their support. The decline escalates until the store careens into bankruptcy.
In the meantime, inflation pressures are piling up. Consumers are pulling back on their spending because unemployment is growing. That is just common sense. I don't need to see the jimmied figures because I see the headlines: Bear Stearns goes under, blah blah files for bankruptcy. Of course the bodies lie on the sidewalk. Everyone at Bear is sitting around waiting for the axe to fall. They might as well pack up and leave. The first thing that usually occurs when there are declining revenues is that people are laid off. Labor is the highest cost of a business (for the most part) so to fire people is the fastest way to stem the bleeding.
Of course what has captured the headlines for the past few months is the deflation in the housing sector, or (to be as euphemism-free as possible), falling housing prices. Economic news is more dire daily and what passed for optimism is also declining (like saying, it's sure that we'll be peering at a bottom any time now).
So now you can try to stack up the problems according to which is more appalling or cataclysmic (I love using thesaurus.reference.com): Declining wealth due to falling housing prices; negative equity (loans worth more than the collateral they're built on); no savings (part of our economy, a big part, was generated by rampant consumer spending); lots of debt everywhere, individual and corporate; rising unemployment; hideously high food prices globally leading to unrest and the toppling of a government (Haiti); the gated communities of hedge funds and auction-rate securities (gated in the sense that no investor can get their money out); horrifying price increases in prescription drugs, $5-a-gallon gasoline, $10-a-gallon milk; $4 a dozen eggs...how is it that everything collapsed at the same time?