It's Still the Economy, Stupid

Remember that phrase?

Well, it still applies: perhaps more so now than ever.

Consider the latest GDP report:

Economy Sputters With 0.6 Percent Growth
Thursday March 27, 9:18 am ET

By Jeannine Aversa, AP Economics Writer

Economy Nearly Sputtered Out at End of 2007, Probably Faring Worse Now

WASHINGTON (AP) -- The economy nearly sputtered out at the end of the year and is probably faring even worse now amid continuing housing, credit and financial crises.

The Commerce Department reported Thursday that gross domestic product increased at a feeble 0.6 percent annual rate in the October-to-December quarter. The reading -- unchanged from a previous estimate a month ago -- provided stark evidence of just how much the economy has weakened.

Or this:

Equity Loans as Next Round in Credit Crisis

By VIKAS BAJAJ, New York Times
Published: March 27, 2008

Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed — sometimes heavily — against the roofs over their heads.

Now the bill is coming due. As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis.

Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back.

Or this:

Wall Street to shed 20,000 jobs as crunch hits

By Tom Leonard in New York
Last Updated: 12:24am GMT 27/03/2008

New York is expected to lose more than 20,000 financial sector jobs by the end of next year as Wall Street is hit heavily by the credit crunch, according to a new report.

The city's Independent Budget Office estimated that profits for 2007 will sink by more than 80pc to the lowest level since 1994, due largely to the effects of the sub-prime mortgage crisis.

The agency predicted the financial activities sector will shed 12,600 jobs in 2008, 2.7pc more compared with last year. The figure includes 5,300 jobs in the securities industry.

There have been a lot of diaries here at dkos about the economy recently. And a lot about the troubles on Wall Street.

The bad news, unfortunately, does not appear to be going away.