OVER THE CLIFF….From the Wall Street Journal today:

U.S. Warning Signs Point Toward a Deep Recession

The U.S. has suffered recessions only twice in the past quarter century and both were short and mild. There are good reasons to fear that the looming recession, if it arrives, could be worse.

Housing is in the midst of its worst downturn since at least the 1970s. That has led to a meltdown in the mortgage market….[etc. etc.]

From the New York Times:

Stocks Plunge in Europe and Asia on U.S. Recession Fear

Global stock markets plunged on Monday as fears spread that the turmoil in United States mortgage markets is spreading. Indexes in Europe fell as much as 7 percent after a huge selloff in Asia.

“There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London said by telephone.

The ability of the financial industry to panic is truly extraordinary. It’s not that they’re necessarily wrong, just that as recently as a few weeks ago most of them were arguing that as bad as the subprime debacle was, it was probably relatively contained and would lead to a slowdown at worst. A month later they’re jumping out of windows.

So as long as we’re at it, here’s some more bad news: a quick Nexis search shows that in November there were about 500 references to “recession” each week. In December it was up to over 1,000. So far in January, it’s been over 2,000 each week. If you believe in the newspaper theory of predicting recessions, then there’s not much question that we’re headed straight into one.