In effect, the entire economy is going through a process of reevaluating "the greatest story never told" and are discovering it wasn't that good a deal to begin with.

Stewart is really great for getting an understanding of what's going on. Lot's of charts to show you visually what's going on along with simple explanations for what they mean, and then a straightforward tying up of the whole thing. I don't have a degree in economics, but I know the subject well enough to identify bogus arguments, and this isn't that. His prior articles do a good job explaining many parts of the current problems in nice digestible chunks.

Hale "Bonddad" Stewart: The Illusion of the Bush Economy's Growth is Revealed

Today's declines in Asia were even more severe than those yesterday, and several markets hit multiyear lows. Indian shares plunged so quickly -- nearly 11 percent -- that its stock markets halted trading soon after opening. In South Korea, volatile futures prices prompted the main Kospi market to briefly suspend program selling orders at midday. The Australian market suffered its worst one-day fall ever, while Japan's Nikkei fell 5.65 percent to its lowest point since 2005. It is down nearly 18 percent this year.

In Hong Kong, the Hang Seng index was down 8.65 percent today, after dropping 5.49 percent yesterday. It's off 19 percent this year and is 30 percent lower than a peak in late October.

"This is an expression of panic -- really nothing less than panic about prospects for the U.S. economy," said Stephen Green, senior economist with Standard Chartered Bank.

Free-fall. On October 9, 2007, the Dow closed at 14,164.53, it's all time high. This morning, the Dow opened at 11,830.88. That's down 17% in the last 14 weeks. Without this morning's move by the Fed, we probably would have been looking at the same things the overseas markets saw in the past two days, and given the problems in the US economy (the subprime disaster and the credit card crunch just for starters) this is going to get a hell of a lot worse before it gets better.

But don't take my word for it, here's Mort Zuckerman of U.S. News and World Report, "You’ve heard me say here I think we are facing the worst financial crunch and crisis since the Great Depression." The full text of that can be found here. And he's just the tip of the iceberg.

Fed Cuts Key Interest Rate as Asian Markets Drop for Second Day

Since the start of the year, Japan's Nikkei index has declined 13 percent, while Hong Kong's blue-chip index is down more than 14 percent. Even China's Shanghai index _ which nearly doubled last year _ has fallen 6.6 percent over the same period and nearly 20 percent from its all-time closing high on Oct. 16.

As previously noted, 1-800-RUN is now in effect. It's time to party like it's 1929.

Stock Markets Plunge Worldwide - Business on The Huffington Post

Workers' wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the fourth decline in the past five years. The lagging wage gains are cited as a chief reason many workers have growing anxiety about their economic futures.

We're making less money. This isn't much of a shock to most people, but it sure seems to be to the people making money policy.

Gas, Food Spur Inflation Jump in 2007 - Business on The Huffington Post

Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor.

That's Billion, with a B. 1-800-RUN.

Giant Write-Down Is Seen for Merrill - New York Times

The Local Government Investment Pool had $3.5 billion of withdrawals today alone, putting assets at $15 billion, said Coleman Stipanovich, executive director of the State Board of Administration, at a special meeting held to address the crisis. The board manages the fund along with other short-term investments and the state's $137 billion pension fund.

``If we don't do something quickly, we're not going to have an investment pool,'' Stipanovich said at the meeting, held at the state capitol in Tallahassee. The fund was the largest of its kind, managing $27 billion before this month's withdrawals.

Thus begins 1-800-RUN

Bloomberg.com: Worldwide

The Fed's half-point interest rate cut last week to 4.75 percent came in response to market turbulence in the U.S. and elsewhere in the fallout from a subprime mortgage crisis. Investors this week will be looking for signs that U.S. inflation is under control. The market is also hoping that readings this week on U.S. durable goods demand, the housing market and consumer spending power will show that the U.S. economy isn't heading for recession.

Many analysts see more U.S. rate cuts ahead -- which could further weaken the U.S. currency, as investments denominated in dollars become less attractive.

This is actually going to continue to worse. The housing market shows no signs of improvement, the subprime balloon has burst and is looking worse daily, and the upshot of the whole thing is, as W said a few months ago, more people than ever own their own homes, and more people than ever are having their mortgages on those homes foreclosed.

Couple this with the actual decline in real wages (previously noted here) and we're looking at a disastrous confluence.

New Week, New Low for Dollar: Financial News - Yahoo! Finance

Wall Street has been pummeled as a deepening credit crunch spooked the market, and led to unease about potential losses at financial firms and funds. The Federal Reserve, which has injected some $64 billion of liquidity into the U.S. banking system since Thursday, said it stood ready to act again should market conditions warrant.

Oops. Yep, more people than ever own there own homes, and now more people than ever are going to have them foreclosed.

Stocks End Down on Credit, Consumer Woes - The Huffington Post

Virgin has previously said it intends to take delivery of all six of the $300 million Airbus A380 planes it has on order, but would not see its first one until 2013 due to problems the planemaker has encountered in wiring the mammoth planes.

Something that matters to businesses is being able to get what they want when they want it. When you're talking about an airplane, that means you're looking a ways out, but six years before the first might show up? Airbus is looking at some very serious problems.

UPS cancels A380 in new blow for Airbus | Reuters

Wage stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years. Earnings for workers with four-year degrees fell 5.2% from 2000 to 2004 when adjusted for inflation, according to White House economists.

Yep! The economy is booming and we're all better off. Unless we aren't. And it turns out, we aren't.

That Raise Might Take 4 Years to Earn as Well - Los Angeles Times