The worst is over. At least in the Northern Hemisphere. Yesterday marked the earth's greatest tilt away the sun, leaving the northern latitudes in darkness for much of the day.

Here in Paris, for example, it was practically dark at 4PM yesterday…at 9AM this morning, it is still dark.

But the world turns. Around and around it goes. It never seems to stop. Oh…we're getting dizzy!

And while it is dark and cold today…lo! Soon it will be sunny and warm. Beginning today, the daylight will last a little longer every day. Gradually, we will tip back into the sun's favor.

In the meantime, we can't remember such a foreboding Christmas season. Factories all around the world are shutting down. People are losing their jobs. Banks are repossessing houses. Prices are being cut.

Just this morning, we turned to Elizabeth: "We're going to have to shift to Plan B next year."

"Plan B?"

"Yes…we've got to cut back on our expenses. Plan A is where we go along as we have been. Plan B is where you have to get rid of some of your horses. And then, there's Plan C…."

"Plan C?"

"Yes, in Plan C we eat the horses."

In California, joblessness has reached a 14-year high - at 8.4%. European car sales have plunged. HSBC says it needs more money. Louis Vuitton cancelled a new flagship store in Tokyo. Traffic at Gatwick Airport in London is down 13% from the year before.

These are just today's headlines. Every day is about the same - more cutbacks…more bankruptcies…more trouble.

The Dow fell 25 points on Friday. Oil closed the day about $42. And the 10-year T-note rose to yield all of 2.12%. People are eager to put their money in Treasury paper - even at these tiny yields. They may not make any money, they reason, but at least they won't lose any. (We predict that they will lose a lot of their money; when…we can't say.)

And we will venture another guess. When next it is sunny and warm outside in Paris and New York, the financial crisis will still be with us. That's right; market cycles last longer than planetary cycles. The bull market in stocks began when it was sunny and hot, August 1982. Since then, the earth has made its way around the sun 26 times…and the Dow rose almost 20 times.

You don't think that such a huge, generational bull market will be corrected in a single year, do you? You don't think that the correction will only take the Dow down about 45%, do you? You don't think people will be able to stick with Plan A, do you?

We don't. The worst is still ahead. Here's why:

When the boom began, people were slow to get in the spirit of it. They remembered the '70s and fretted. As the Dow rose from 800 to 1,800 they thought they saw a crash around every corner. Then, in October of '87, the Dow hit 2,700 and crashed - down 507 points in a single day. Investors thought the bull market was over. Instead, it continued.

By December, 1996, the Dow had reached 6,437. Alan Greenspan, as witless at the beginning of his career as at the end of it, pronounced this the result of "irrational exuberance."

But the boom continued. And gradually, people came to accept that stocks would always go up "in the long run," and that houses always went up all the time. Oh yes, and jobs were always available…and so was credit. At the beginning of the boom, people saved about 10% of their incomes. But as their faith in the boom grew their savings diminished. There was no longer any need to save money for a rainy day - because it never rained.

And if they did need money, they could always draw on someone else's savings! Stocking money began to seem as old-fashioned as canning tomatoes. Why bother? You can get all the fresh tomatoes you want at the supermarket. And, until recently, you could get all the cash you needed from credit cards and home equity lines.

The saving rate fell to zero.

Then, of course, it started to rain. And now, the lack of savings is becoming a serious crisis at the household level. Gone are the smiley faces at the home-equity loan departments. Nor are there more credit cards arriving in the mail.

A little insight from Durham University in Britain: You might have thought that in the Bubble Epoch people used their credit for extraordinary expenses…such as adding on to their houses or taking a once-in-a-lifetime vacation. If that were the case, they could now merely forego the unusual expense. Their lives may not be so much fun…but at least they would be solvent. Not so. It turns out that borrowers got used to living on home equity withdrawals. They counted on the money to fill in the gaps in their household budgets.

James Saft: "It seems that even during boom times in Britain people were not borrowing against their houses simply to buy BMWs or to pay for vacations, but often to keep their households running during tough times."

In short, they used borrowing in place of savings - for when they got sick, lost their jobs, or had some other crisis.

Now, cometh another crisis - the worldwide financial crisis - and they have to move to Plan B. But how? They have no savings. They can no longer borrow. What do they do if they lose their jobs?

"You can always get a job flipping burgers," was the poor cousin of "stocks always go up over the long run." Both these fantasies depended on a boom. The boom gone…so are the jobs… Soon, they will have a crazed look in their eyes…and a carving knife in their hands. Look out, Flicka! Look out, Mr. Ed!

*** The more the average householder is pinched, the more he resents Wall Street. The press no longer reports the latest news on executive compensation with admiration…now it is outrage that readers want to feel. A group of 600 executives in the financial industry - the same executives who are now getting bailed out with taxpayers' money - pocketed $1.6 billion last year. The banks did the same thing as ordinary households. Rather than save money, they spent it. The typical household bought a big-screen TV. The banks paid off their top employees, giving the average banker a compensation of $2.6 million.

"The bankers get bailed out; we get sold out," said one unemployed autoworker.

*** We have only seen the beginning of this crisis. So far, consumers have put off buying things they could easily delay - such as new cars and new houses. Next year, without jobs, they will cut back further. Consumer prices will fall - simply because consumers will buy less of them.

Then, the call will go out to stop bailing out Wall Street and begin bailing out the consumer. Some form of direct giveaway to households is almost inevitable. Perhaps more "rebate" checks will be sent out. How much? Hard to say…but this is what gives us confidence in the feds. If they really, really want to cause consumer prices to rise - they can always bring over Gideon Gono as a consultant…and add zeros.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.