Sitting at dinner Wednesday night we noticed fewer people at our favorite go-to restaurant in San Francisco. Was it just a dead Wednesday? Were people at home enjoying the new fall TV season? Or, is the economy getting to people? Tough to say.

Last Friday we splurged at a more upscale restaurant and it was packed. Of course that was before Monday's wild ride on Wall Street, before Iceland announced it may go bankrupt, and before the Dow plunged 700 points on Thursday and kept falling on Friday. What a difference a few days can make.

Feeling overwhelmed?

The headlines keep flying and they are ugly. If you're like us, you're probably feeling a little overwhelmed by all of it—that it's tough to grasp the gravity of the situation. So, focus on the basics to help keep it in perspective: 

• The stock market is down around 40% from last October. In one year the Dow Jones Industrial Average has lost about $8 trillion. In the last six years it's gone from 7,500 points to 14,164 back to about 8,500 points. If the Dow drops another 1,000 points, it will have wiped out six years of gains in the stock market.
  
• Since July of last year, retirement plans—such as 401(k)s—have lost $2 trillion. Some estimates show individual accounts are down about 20% on average. Unfortunately, 401(k)s are the main source of retirement savings for Americans, whose personal savings usually amount to 1% of income or less. (The median U.S. household income is $50,000.)
  
• Consumers are already spending less and likely to keep reining it in, even as we head into the holiday season, which is typically a big boom time for retailers. This doesn’t bode well for the economy.
  
• As we've been explaining, the credit markets are still stuck, meaning businesses can't get loans, which means some companies won't be able to make payroll. Many companies take out small loans to pay their employees. If they can't get the loan and can't make payroll AND consumers aren't buying their products, people will lose jobs. When people lose jobs, they can’t buy things, meaning the economy doesn't grow. If it doesn't grow for two consecutive quarters, technically it's a recession. It's a vicious cycle.

The big picture

The million dollar question is when will this scary time end? Most economists say the U.S. is already in a recession. The moves the Federal government has made (cutting interest rates, buying up those bad mortgages), are meant to stop the economy from slipping into full-blown depression. Some economists now think we’ll need another stimulus plan (we already got a check from the government this year) to get the economy moving again.

The presidential candidates are offering up their ideas, as we saw in the last debate. In fact we wanted to get into the various economic policies being proposed by John McCain and Barack Obama, but we need more space than we allow ourselves in these weekly posts! We’ll break that down next week.

We’re going to live blog the debate on Wednesday and hope you’ll chime in with your thoughts on www.discussiondivas.com.