The financial markets, credit markets, labor markets and housing market have all reported negative news recently. All that ugly news was wrapped-up with a bow and presented alongside a Consumer Confidence Index that showed its biggest drop since the aftermath of Hurricane Katrina in 2005.

"A softening in business conditions and labor market conditions has curbed consumers' confidence this month," said Lynn Franco, director of The Conference Board Consumer Research Center. "In addition, the volatility in financial markets and continued subprime housing woes may have played a role in dampening consumers' spirits."

In the financial markets, stocks retreated and added to the volatility as traders reacted to the news from the credit and housing markets and await the Fed’s next move.  From the Washington Post,

"It's pretty miserable," Mark A. Coffelt, chief investment officer of Empiric Funds, said after the morning slide in stocks. "I think the market is slowing coming to the realization that the Fed is not going to cut in September and they hate to believe it." 

Credit markets suffered amid renewed concerns surrounding the fallout from the sub-prime-mortgage crisis and a liquidity crisis at Countrywide Financial Corporation (NSYE: CFC), the nations’ largest consumer mortgage lender. The credit market’s attempt to toughen its lending standards to consumers added to housing prices falling dramatically. According to USA Today,

“U.S. home prices fell 3.2% in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the group said Tuesday.”

Not convinced that things have been better?

Check out these additional data points at reported in the San Jose Mercury News.

“The Present Situation index, which measures how shoppers feel now about economic conditions, decreased to 130.3 in August from 138.3 in July.

The Expectations Index, which measures shoppers' outlook for the next six months, fell to 88.2 from 94.4.

Consumers' assessment of the labor market only weakened slightly. Those saying jobs are "hard to get" increased to 19.7 percent in August from 18.7 percent. Those saying jobs are plentiful fell to 27.5 percent from 30.0 percent in July and those saying jobs are not so plentiful rose to 52.8 percent from 51.3 percent.”

Complicated? It sure is. All major pieces of the economy are interconnected and in some cases reliant on each other. A decline in one sector often ripples to other areas.

All major stock market indices were down. The Dow, NASDAQ and S&P 500 were off between 2 and 3 percent today. At Google Finance, the sector summary lists 12 industry sectors indices of the economy (each index made up of the stocks of several companies). All sectors were down from yesterday.

Buckle your seatbelt.