US payroll data from last week seems to have sealed the recession-is-here judgement amongst many popular-press quoted pundits.

Outside the White House and other optimists-by-interest bastions this is not news. Yet it has taken time for the dismal indicators (Exhibit 1) to erode the wall of confidence banks and their cheerleaders must, by definition, maintain: Mr Paulson, US Secretary of the Treasury, is now visibly shifting tone in his recent calls to finance houses to "pro-actively" raise capital in order to buttress balance sheets.

Exhibit 1: Dismal Matrix

And there sits the main problem. The yield curve looks great thanks to frenzied Fed action; but one has to go back to February1982 and the savings and loans crisis to find a wider Aaa vs US 10 year constant maturity spread than what was recorded last month. The next most recent 'wideness' episode was in November 1970 during the Penn Central Railroad failure (Daddy of Northern Rock, if you like, but dealt with far better).

Now there are shades of both eras - plus expensive energy. Same old stories, different twist.

How bad will the pain be? Cannot say but previous drops in the S&P500 (not all of them recession related) offer a very broad indication of what fright can do.

Exhibit 2: Prior SPX frights