Consider the following:
Stock markets have fallen worldwide amid concerns about the effect of higher global interest rates on company profits, takeovers and loan defaults.
The US Dow Jones index lost 311.5 points, or 2.3%, to 13,473.57, while the S&P 500 shed 2.3% to 1482.66.
In London, the FTSE 100 closed 203.1 points, or 3.2%, lower at 6251.20.
Many indexes have been trading at their highest levels in recent years, buoyed by low rates that fuelled high levels of consumer and corporate spending.
The concerns are nothing new, and analysts and investors have been warning that a number of factors are combining to create worrying conditions for equity and credit markets.
Over the past few years there has been a boom in company profits, house price increases, and mergers and acquisitions.
Driving this have been low interest rates that have made it cheap for companies and consumers to borrow cash and finance purchases.
That period of cheap cash now seems to been coming to an end with central banks worldwide, including the Bank of England, raising their main rates to slow stubbornly high inflation.
At the same time, oil prices have climbed raising fears that inflation could also pick up again because of the higher energy costs.
Everyone is looking anxiously at the US economy, in particular the housing market.
Sales of existing homes in the US during June fell to the slowest pace since November 2002, giving no sign of an end to the housing slump.
Sales fell 3.8% in June to a seasonally adjusted annual rate of 5.75 million homes.
Figures from the National Association of Realtors also showed that the median price paid for a home rose 0.3% compared with June 2006 to $230,100.
It is the first such increase in average prices for 11 months.
“The past few months have indicated that a bottom has not been reached, which is negative for the economy,” said Richard Dekaser, chief economist at National City Corp in Cleveland.
Workers World has a good article on the crisis:
On July 24 the largest mortgage company in the U.S., Countrywide Financial Corp., reported that its second-quarter losses were much worse than expected and that problems in the subprime mortgage sector reported earlier were now spreading into the prime mortgage market.
Prime mortgages are those loans made to borrowers with solid credit histories. Delinquencies in this area are rising, indicating that the much-discussed problems in the subprime sector were just the first phase of a larger capitalist crisis.
I am reluctant to predict anything from this latest news, like the total collapse of the US economy, as we have been here before. Recall that in 2002, plans were afoot to invade Iraq. And now, five years later, with Blair gone and Bush at his least popular, what chance another war in the Middle East?
Perhaps the prostpects of war are becoming less likely:
Iranian foreign minister Manouchehr Mottaki said Iran would consider meeting the US at deputy foreign minister level, if the US suggested it.
The US and Iranian ambassadors to Baghdad met on Tuesday.
It was only the second direct meeting between officials of this level in almost three decades.
At the meeting, both sides blamed each other for the violence in Iraq.
The US accused Iran of increasing its support for militia groups in Iraq in recent months, but Iran has denied this and said Iraqis were “victimised by terror and the presence of foreign forces”.
However, the two sides did agree to form a security committee, with Iraq, to focus on containing Sunni insurgents.
It would be hard to justify an attack on Iran, let alone a full-scale invasion, so the Empire will stick with rhetoric. What chance a well-timed terrorist attack in the US, with Iran being blamed?