cafe: That's inflation. The fed is steering us toward a crash, but will probably keep it to a mere depression.
Even my company seems to have slower sales than usual, and we keep laying people off, so there must be something going on. I have a friend (one of my very few in person) that got laid off from his company a couple months ago and he hasn't found any interest from any employers yet.
Crashing house prices will cause people that bought after the mid-late 90s to see a numerical loss, not even counting inflation. This will ripple through the economy, which has been propped up by debt for the last decade or more. Due to the low risk, they're happy to just walk away, so it's going down faster than anyone could have expected.
The market is vibrating, up steep, down steep... It shows extreme uncertainty.
All the government and the fed has done is make the situation worse. The only fix for this is raising interest rates to the high levels seen in the 80s. It'll cause a rash of collapses among shaky banks that shouldn't be alive anymore, kill the ARM idiots, interest-only idiots, etc. There's a lot of that to shake out in the next 5 years or so. It'll happen anyway, but this corrects the problems faster. The bitter pill we need to fix it.