On Wednesday, the Dow Jones Industrial Average closed below 8000 for the first time since March 2003, dropping 427.47 points, or 5.1 percent.

Why, you ask? Pick your poison.

• Housing starts dropped for the fourth straight month, signalling that the housing market has yet to stabilize. Housing permits also dropped -- promising further declines to come. (The 4.5 percent drop in housing starts translate to an annual rate of 791,000, the lowest such number since the Commerce Department began keeping records in 1959.)
• The minutes of the last meeting of the Federal Reserve Board of Governors indicated that the Fed is open to another rate cut, pushing the Fed Funds rate down to its lowest point in 50 years, because current economic problems "could persist for some time."
• The CEOs of Ford and GM told the House Financial Services Committee that bankruptcy would mean liquidation of their respective enterprises.
• Citigroup announced it was buying $17.4 billion worth of toxic assets previously squirreled away in "Structured Investment Vehicles," (SIVs) an acknowledgement that the reeling financial giant had no other option but to assume the debt on its own books.
• Consumer prices fell in October at the sharpest pace in 60 years.

So, to recap: The U.S. financial sector, housing industry, and auto industry are on life support, the Federal Reserve is gloomy, and a massive wave of deflation is breaking over the entire economy.

Two questions:

1. Should we be reassured that the Dow is only down to where it was five years ago?

2. Will there be anything left for the Obama administration to try and fix, when it takes over on January 20?