Dow’s down a whole lot today. Is the end in sight? Probably not.

Financial sector troubles have started to affect consumption decisions on the part of individuals, with consumer purchases down 1.2% in September. Credit getting tight? No flat screen TV this year.

Why are chances good that the end is nowhere near in sight? Have a look at this awesome graph I found on the internets:

You see where that line starts going crazy? That’s around 1996, when Greenspan made his famous “irrational exuberance” remark. (h/t Yves Smith).

In closing, let me introduce you to another awesome economics term: overshooting.

Fasten your seatbelts, my friends. It’s gonna be a bumpy ride.

I’m so sick of people like Steve Forbes and Larry Kudlow talking nonsense. Megan McArdle to the rescue:

The good news is, the weak dollar isn’t the catastrophe that some people seem to think it is. While it is falling, it will trigger capital outflow, but when it bottoms, US capital markets will become attractive to foreigners.

It’s the most right-on thing I’ve read all day.