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Perhaps the most remarkable aspect of these extraordinary times is the pace of the adjustment. Redrow, the builder, this week announced that its year-on-year house sales have fallen by 45%, while figures for the housing market yesterday revealed that prices declined by 15% in the year to October.
According to the Society of Motor Manufacturers and Traders, new car sales to private individuals were down by 28.8% year on year in October, and adrift by 23% overall. ITV executive chairman Michael Grade, meanwhile, said he expects a 9% drop in advertising revenues in the last three months of this year. And Marks & Spencer said this week that its food sales had fallen by 5%.
ArcelorMittal, one of the world's largest steel companies, has announced temporary cuts in production of up to 30%. The oil price has more than halved from its summer peak of $147, and other commodities from foodstuffs to metals have followed it down.
The Baltic Dry Index, which maps the cost of shipping bulk cargo such as iron ore, wheat and coal round the world has plummeted from 11,793 in May to 826, which means that cargoes that then cost $100 a tonne to ship, now cost less than $10 a tonne. A 170,000-tonne bulk carrier that cost $234,000 a day to charter in summer could be had at the beginning of this week for just $5611 - which, to save you doing the sums, is a drop of almost 98%.
Needless to say, the value of ships has plunged with that index. Only hedge funds seem to be sinking faster - and possibly private equity. The fact that the second-hand value of private equity-related debt is 80p in the pound or lower in current London trading means as a generalisation that in almost any of the recent big buyouts where there was four or more times gearing, the equity has been wiped out.
All this adds up to a stunning dislocation. It is hugely scary on one level, but on another it is positive because the credit crunch, while it appears to be the problem, is in fact the solution.
For years, the global economy has demanded an ever-larger fix of debt in order to maintain the appearance of growth, and now it is being forced to wean itself off its addiction - to go cold turkey. It is a horrible shock, but the faster it readjusts to the new reality, the quicker the economy will find a new base and create the conditions for eventual recovery.
Ironically, the one place in which the adjustments have been less savage than they should be is banking, where managements and the governments that have refinanced them seem to be preoccupied with maintaining the status quo rather than recognising the full reality of the write-offs that need to be made.
The trouble is many still think this is a pill that is just to big for them to swallow. It may therefore be time for further fresh thinking. One of the insufficiently explored aspects of the banking problem is the close similarity, albeit on a far bigger scale, with the Lloyd's of London insurance market spiral of the late 1980s.
Lloyd's appeared to be growing much faster than the overall insurance market throughout that decade, and this success was put down to its entrepreneurial skill, its innovation and success in developing new ways of trading.
In particular, to make use of surplus capital that was in excess of what was needed for the underlying market, specialist syndicates had developed which insured other syndicates. As long as there were no underlying losses, these new syndicates showed good profits. Their success then sucked in even more capital.
However, when the losses emerged, they funnelled into these new syndicates, which were then found to have been underpricing the risk for some years, had in fact not been profitable at all, and could not cope with the losses.
As counterparties to all the other syndicates, their collapse sparked off spirals of claims and counterclaims that threatened to bring down the whole market. Lloyd's would not have survived, but for one thing. The objective had to be to keep the market open so it could trade through the problem, so it became essential to separate the new capital needed to support new business going forward from contamination by the old capital that had been rendered toxic by the unquantifiable losses on things like pollution and asbestosis.
Eventually it was agree to bundle all the old policies, the capital and the claims, into a vehicle, which later became known as Equitas, where it was possible to discount the liabilities, allowing for time.
In this way, the vast capital deficit could be set aside and run for the long term, working progressively through the problems (it is still there in fact) while the current trading could continue, and attract fresh capital.
Obviously to try to do something similar with the toxic assets held by our banks would be a mammoth undertaking - although in relative scale, probably no greater than Equitas was at the time. But ultimately is may be what is needed.
