I don't buy into the global crash stuff but just a note if this year to date were added to that chart the drop in the Dow would look much steeper. The Dow isn't really the best indicator of the overall economy anyway as it is only the 30 top stocks. The S&P 500 is a better indicator of overall economic activity. Economists however have long measured recessions as beginning with two consecutive quarters of negative economic growth. By this long time standard the current recession began in the 3rd quarter '91.

There is more than one reason for the down turn, but clearly Bush busting the budget caps sky high is one major reason investors have lost confidence. One of the foundations of the strong economic growth of the '90s was the fiscal discipline demonstrated by Clinton and Congress. Unfortunately that discipline is long gone.