There is a real sense of foreboding about the economy now that Katrina has struck with full force. This storm will be the most devastating ever for the U.S. oil and refining industries.

Our imports increase as long as the economy grows,

This is the latest sign that the economy is slowing down, and because these are labor numbers, they're going to have particular weight with the Fed. This is the kind of news that could take some of the uncertainty out of the markets and get stocks going up again.

Our imports increase as long as the economy grows. But there's certainly a concern that our exports are down despite the fact that Asian and European economies have begun to rebound. Maintaining the high deficit is dangerous because that means a huge debt, and if our creditors lose confidence in the U.S. economy and begin selling dollars, which drives down the value of the currency, that could spark a serious inflation threat.

With borrowing costs on the rise and the wealth effect from real estate assets diminishing, something has to give.

It's fairly safe to say that the trade deficit may have peaked now that oil prices are falling and the U.S. economy is showing signs of slowing down.