And that, of course would not improve the job situation.
Financial companies have already shed jobs in buckets. Led by carmakers, manufacturers trimmed 61,000 positions in August alone - enough jobs to staff a dozen big assembly plants.
Temp companies such as Manpower, which often are the first to feel economic changes, are shrinking. The number of people taking multiple jobs is rising.
And this won't help banking and finance. It's hard to make your mortgage when you don't have a job.
Every slump hits bottom. This one will, too. Watch and hope for a shrinkage in the inventory of homes on the market. A decline from the current 11 months' worth of supply, at prevailing sale rates, will be both a tonic and a symptom of improvement.
Other medicine is already at work.
Energy prices have plunged since their peak in early July. Oil fell to close to $105 a barrel at one point yesterday. That'll help the whole economy but especially car companies and airlines and hotels.
The weak dollar (a result of the mortgage meltdown) has given U.S. exports their healthiest growth in years, although it doesn't seem to be helping factories as much as people hoped. (Much of the gain has come in grains and other agriculture.)
This week's productivity report might have been the best economic news all year.
The United States pumped out more haircuts, banking transactions, trucks and other products per worker last spring than at any time in history, the government said. The productivity increase hit its third-highest quarterly rate in five years.
Rising productivity fuels corporate profits and - in theory, anyway - provides leeway for companies to give workers raises. It releases inflation pressure and gives the Federal Reserve room to cut short-term interest rates - the most potent form of economic CPR.
But even rock-bottom rates won't matter if nobody wants to lend and nobody wants to borrow.
Barack Obama and John McCain both have mortgage rescue plans. Obama's is larger, but even it won't be big enough if what PIMCO's Gross is warning about comes true.
Obama would let the Federal Housing Administration insure refinanced loans for troubled homeowners and appropriate $10 billion to bail out people with mortgage troubles. McCain talks about "government assistance to the banking system" and would allow subprime mortgage holders to modify their loan terms.
Now if everybody could start talking about this instead of candidate "biographies," we'd be closer to solving the problem.
