SHORT TAKES ON THE DRIFTING WRECKAGE - AT 10:45 P.M. ET:

ASIAN MARKETS - Asian markets are sliding right now, partly as a reaction to the downgrading of America's credit rating.  It is the fifth straight session of loss on the Asian markets.  Everyone, of course, is anticipating the opening of the American stock market tomorrow morning.  At the same time, European bankers are strangling to save the economies of Spain and Italy, which are in desperate trouble.  The current saying is, "Spain is too big to fail, and Italy is too big to save."  You may be sure that there will be attempts in America tomorrow to stabilize the markets and prevent a Dow dive.  We can predict nothing.

INCREDIBLE – Saudi Arabia is withdrawing its ambassador to Syria in protest against the government crackdown on dissenters...just as the United States is sending its ambassador back to Damascus.  Can't we coordinate with our presumed allies?  By sending our ambassador back we once again show weakness in the face of another dictatorship, while even Saudi Arabia, not regularly known as one of the great backers of democracy, is taking a stronger stand against the Syrian regime. 

THE NEXT NIGHTMARE – Some economists are warning that, if we go into a second recession, it could be worse than the Great Recession that President Obama faced when he took office.  Their argument is that the economy is far weaker than it was then, and that we have fewer resources to fight economic decline.  We might also add to that the psychological factor of discouragement.   Our economic crisis began with the collapse of September, 2008.  We live in a fast-moving, impatient age.  If we go down again, the discouragement could be so great that it perpetuates the very problems we're trying to solve.

August 7, 2011