The Wheels are Starting to Come Off

In truth, if you’ve been reading this blog, and the websites and books recommended here, you know this whole thing started years ago, lug-nuts beginning to loosen and slowly rotate without any change being noted by the vast majority of Americans. But, it’s hard to ignore the problem now.

The credit crisis has flared and is now building again in intensity. The stock market, when it opens today (in about an hour from this writing) will almost certainly crash, possibly big.

The European and Japanese stock markets have “been mauled,” on what could very well be known in the years that come as “Black Friday,” or maybe “Bloody Friday.” Whatever the case, it won’t be pretty.

This week has seen a LOT of building bad news. Unemployment projections are looking bad. The snowball of advertising cancellations for November and December, where advertisers cancel already placed advertising orders with radio and television stations and newspapers. Massive layoff talk has been out in the open this week. Despite the fact that oil prices are tumbling, and with them, the price of gas at the pump, economic activity is quickly winding down.

Also out in the open in the news this week, has been talk of state and local tax shortfalls. When there’s lower economic activity, tax revenues fall, and so the amount of money states and cities have to spend on services falls pretty fast. This causes more layoffs, and since in many areas, states and cities are high headcount employers, the problem spirals and can crash pretty quickly.

Which it is most certainly doing.

Posted in Economy
Tags: Depression, Economy, Financial Crisis, Recession, Unemployment