The financial world doesn't feel very festive right now. Today's headlines are full of doom and gloom including significant falls in UK house prices.
It may be the festive season but on the economic front there's not very much to be cheerful about right now.
In fact, looking at the main headlines on the Bloomberg screen this morning, I detected something of a sea-change in the overall mood. While most days bring a mixture of both good and bad, today's news was almost unremitting doom and gloom.
What am I talking about?
Top of the list for most Brits was the dramatic fall in house prices reported by property monitor Rightmove
(LSE: RMV)
. November saw a 3.2% decline in the average UK asking price, according to the latest survey from the nation's most-used housing web site, the largest drop since agent-listing records began in 2002.
Home values slipped in 9 out of the 10 regions of England and Wales surveyed by Rightmove, with the biggest decline seen London where the average worth fell over £28,000 on the month. All 32 areas of the capital saw sliding values.
OK, some of us here at The Fool have been cautious for some time. Though it's alarming how fast sentiment has swung. In the autumn there were plenty of optimists out there, and even last month the vested interests were denying the likelihood of a house price collapse. But when does a sharp decline turn into a crash?
The next nasty on my screen, at least at first glance, seems more for the macro-economists.
The slowest monthly expansion for more than two years was recorded by Europe's manufacturing and service industries, reports today's Royal Bank of Scotland
(LSE: RBS)
composite business index. Worse than expected, the numbers follow previous news that in Germany, investor confidence has plunged to its lowest level in almost 15 years, while French business sentiment slid to an 11-month low in November.
But in context with another of Bloomberg's cheerful headlines: "Stagflation may return as Price Pressures meet Credit Squeeze", a less than jolly picture is emerging.
Global growth rates over the back-end of 2007 and into the first quarter of next year may be the slowest in five years, forecast the economists at JP Morgan Chase & Co.
Bad enough. But even worse tidings are in the pipeline. At the same time, say the analysts, inflation may increase at its fastest pace in a decade.
Again, this won't be a great surprise to regular readers. We've been warning for several months that boomtime is over.
The worst US housing slump in 16 years is joining forces with the sub-prime war zone to blitz growth in the world's largest economy as the banks have started closing the credit cashpoints.
And several recent business surveys have cautioned that rising food and energy costs are forcing up manufactured goods prices.
So the spectre of stagflation, that painful mix of stagnating economies and rising inflation, is on the verge of haunting consumers, industrialists, politicians and investors alike.
A combination that stock markets loathe. As you've probably read enough depressing stuff for now, I'll close with a final headline.
"Wall Street sees 20% M&A slump as Suspect Credit hurts LBOs".
Translated into English, that means that the Mergers and Acquisition business, the lifeblood of investment bankers, is being bashed by higher loan costs. The interest rates at which bankers are prepared to lend cash to fund Leveraged Buy-Outs, i.e. debt financed company acquisitions, have more than doubled since June to the highest level in four years.
That's already slashed the number of takeovers by one third over the last five months, and is likely to knock on the head many of next year's mooted deals.
Don't forget that the surge in corporate activity was a major factor behind the run up in share prices from 2003 to the middle of this year.
But with consumer spending credit crunched, business confidence deteriorating and central banks constrained by inflation fears, the bull market has hit the buffers. High flying shares look ripe for a fall.
2008 promises to be a very Unhappy New Year.
