Fell off the cliff a couple of years ago, now most of the way down...

The economics blog CalculatedRisk has some interesting thoughts. I'm not enough of an economist to say anything about this, but it's intriguing....

....I'm frequently asked if I'm more concerned today than I was in 2005. There are reasons for concern: the credit markets have seized up, many financial institutions are insolvent, consumer spending and investment in commercial real estate is starting to decline, export growth appears to be slowing, the unemployment rate is rising ... and the economy is clearly in a recession.

There are huge and scary downside risks today, but I'm actually more sanguine now than I was in 2005. If you think back to 2005, we were standing at the precipice, and there was no where to go but over the cliff.

Here is a look at some of the data. Where would you rather be?...

He has a number of charts showing things that have declined since 2005. Housing starts for instance are less than half of what they were in 2005/6. New home sales are down even more.

His point is that adjustment was badly needed from the overheated situation of a few years ago. But that we are already a fair ways toward the bottom. Let's hope so...