So what is the state of the U.S. economy right now, given that shares are down around 20pc from October peaks?

Car sales are at a 10-year low, with General Motors’ shares selling at levels last experienced in the 1950s. GM, Ford and Chrysler may just be running into liquidity crises as cash flow fades, according to Wall Street sources.

With the climate change bandwagon running strongly, it will take time to shut down the 4×4 factories and increase output at plants producing smaller cars. Profits will fall as a result.

Housing starts have fallen by half from their January 2006 peak. The National Association of Home Builders’ index is at an all-time low. Inventories of unsold houses remain high, with foreclosures rising.

Most of the foreclosures and price falls are centered in California, Nevada (especially Las Vegas) and Florida.

Average prices in Manhattan continue to rise, driven in part by Europeans and others. Considering that a euro buys around $1.60 worth of property in New York, this must be a bonanza for cash-rich Europeans.

Last week’s jobs report was generally in line with expectations, essentially bad, but not cliff-falling territory.

Non-farm payrolls dropped by 62,000 in June, and earlier reports of lost jobs were revised upward by 52,000.

Since December, non-farm payrolls are down by 438,000. The unemployment rate remains at 5.5pc, not particularly high by historic standards.

A mixed picture then. Not as healthy as one might expect, but not the worst-case scenario either.

However, with the credit crunch bill now forecast to reach $1.6trillion, the outlook may be blacker than many realize.

A version of this article appeared in Syntagma recently.

Gold rushes come and go in the world’s innovation capital, California. But when they go … they really go.

The City of Vallejo in California has filed for Chapter 9 bankruptcy, making history it seems. Half Moon Bay, home to some internet digerati, may well be next. According to John Moorlach, Orange County board chief, “This is the tip of the iceberg: everybody is going to line up for Chapter 9 in California.”

What can it mean to people on the ground when their city goes belly up? What of their assets, houses etcetera? It will be interesting to watch this pan out.

According to Goldman Sachs and Lehman Brothers American house prices are likely to fall 25pc from peak to trough. With between 10m and 12m households in negative equity already, there’s still a way to go.

Shares across the developed world are set for big falls too. Albert Edward Société Générale’s global strategist says, “Nowhere and nothing will be immune. We are on the cusp of an equity meltdown that will slash and shred portfolios. We see a global recession unfolding. Liquidity will drain away and crush the twin emerging market and commodity bubbles. The recent hope that ‘the worst might be over’ is truly staggering. Profits are disintegrating.”

Ambrose Evans Pritchard of the Telegraph (UK) — ever the Cassandra — says pointedly, “Britain, Europe, Japan, and China will go down before America comes back up. This is turning into a synchronised bust, after all. The Global Slump of 2008-09 is under way.”

The Bank of England and the European Central Bank are still stubbornly refusing to cut rates because of inflation fears, which will be the least of our miseries in the next two years and should abate soon as global demand falls off the much-imagined cliff.

It’s probably true that Ben Bernanke’s Federal Reserve has saved the U.S. and other countries from another Great Depression. But nothing can stop a slump now because it’s already happening.

In the U.S. and Britain a recession is defined as when the data records two consecutive quarters of negative growth. So we can only call it a recession when we’re six months in — and then it’s usually already over.

It’s said that this definition was deliberately put about by advisers to President Johnson in the 1960s to allow him wriggle room when events were not neat and symmetrical — which is the the most likely case.

For example, if within a six-month period one month bucks the trend and shows a slight positive number, it can’t be a recession no matter how bad conditions are across the economy. And the quarters down have to synch with the “official” quarters from January through December. Different combinations of months don’t count apparently, even though they could skew the result.

However, we know that because of population and productivity growth, the U.S. needs to expand by about 2.5pc just to keep unemployment from rising.

We should forget the official definition because even flat growth is negative for the economy and almost everybody in it, and that means less than 2.5pc.

Everything points to conditions being much worse than that right now.

We could just as easily define it as six months of high gold prices — just like the present.

Ronald Reagan had a stab with, “A recession is when your neighbor loses his job.”

Ominously he added, “A depression is when you lose your’s.”

Syntagma Media is now relaunching Moneyizor.com as a tracker of the hottest topic of the moment in U.S financial circles : macroeconomics. Think “credit crunch”, “global financial meltdown”, “economy falling off a cliff”, “new Great Depression”, and your adrenalin may just kick in.

The financial news from Wall Street and Main Street has been so alarming since last summer, Moneyizor has been changed from a magazine-type portal to become a vehicle for this crucial topic.

“On the day when the UK’s biggest mortgage lender, the Halifax, reported a staggering 2.5pc drop in house prices in March alone, the IMF warns governments, central banks and regulators that they now face a test of their mettle unique in modern times.”

Make sure you keep up to date on Credit Crunch technicalities with Moneyizor.