I told a friend of mine the other day that the economy is looking really, really bad. "You should be okay - you don't work in banking." was the response. No, I don't. And I actually think my own job is safe outside of a worldwide economic meltdown - a scenario I no longer think is beyond belief.
The DOW went through a 400 point gyration today as traders try to figure out what is going on. We have the Fed lending to non-banking institutions for the first time in decades. The dollar has cratered, and may crater more. Many currencies that are pegged to it are starting to drop their pegs and there is talk about the dollar losing is status as a worldwide currency. We have oil at over $100 a barrel, as much as from dollar deflation as anything else, along with gold being over $1,000.
A couple of years ago economists were crowing about the "unlinked world economy", meaning that the old phrase "America gets an economic cold and the rest of the world gets the flu" no longer held. We started to see several months ago that this adage is still true, and the U.S. seems to be coming down with a flu, not a cold. If this is the case, what is going to happen to the rest of the world economy?
Via Gongol comes an interesting link showing graphically the ballooning mortgage and write-down crises that started the all the dominoes. Did I see it? In a way. When I heard radio commercials offering mortgages with no proof of income, I knew things were peaking. I just didn't know how hard it would fall.