Calculated Risk posted a series of very ominous graphs on Saturday showing just how bad things are in this recession. Almost as startling as the depth of our current troubles is how far above normal things were two years ago.
As I have argued before, the reason why this is a global recession--and not confined primarily to the U.S.--is the same reason that allowed the bubble to get so big. The financial instruments that were based on the U.S. real estate market got stamped AAA by S&P and Moody's and went around the world as low-risk, high-return investments. This further fueled the bubble while broadening the scope of what would turn out to be the biggest world economic downturn since the 1930s.
As I have argued before, the reason why this is a global recession--and not confined primarily to the U.S.--is the same reason that allowed the bubble to get so big. The financial instruments that were based on the U.S. real estate market got stamped AAA by S&P and Moody's and went around the world as low-risk, high-return investments. This further fueled the bubble while broadening the scope of what would turn out to be the biggest world economic downturn since the 1930s.
Looks like a little bit of cliff diving...