Keep an eye on the ball

From the Dallas Fed, an interesting chart: International Economic Update, October 2008 - Globalization & Monetary Policy Institute - FRB Dallas

It shows what can clearly be seen as the start of the crisis (or when people noticed), but more worrisome is the aggravation that has occurred since the fall of Lehman.

I also should remind people against designing policy based on daily fluctuations of financial markets. It is tempting because detailed information on the health of financial markets is difficult to parse (which is why we let "the market" interpret it for us). So lets not be overly optimist, and rather be sober and professional in addressing the weaknesses that exist. /lecture

PS: can we please focus more on the crisis in the real economy? The consumer sector (~70% of US GDP) fell by 3.1%!! And as the rest of the world follows suit, what do you think will happen to US exports (the sole good news in the past few NIPA tables)?