This is interesting because retail sales were up more than anticipated in July so consumer confidence might not necessarily reflect what people will do with their money.

Still, it's one more harbinger of doom in a summer of discontent:

Confidence among U.S. consumers plunged to the lowest level in more than two years as Americans' outlooks for employment and incomes soured.

The Conference Board's index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July, figures from the New York-based research group showed today. It was the biggest point drop since October 2008. A separate report showed home prices declined for a ninth month.

Treasury yields dropped on concern consumers will pull back on the spending that makes up about 70 percent of the economy, increasing the risk of a recession. An unemployment rate above 9 percent, partisan bickering over the budget deficit and a volatile stock market weighed on sentiment.

"This paints a picture of underlying demand weakening," said Bricklin Dwyer, an economist at BNP Paribas in New York, whose forecast of 45 was most accurate in a Bloomberg News survey. "Consumers are seeing their wealth deteriorate. We've seen a huge decline continuing in the housing market. They've also been hit on the chin by the equity markets."

A counterintuitive piece of good news; home prices keep falling. Eventually, the market will find its bottom - something that the Obama administration prevented from happening years ago by their amateurish intervention. Once home prices start to recover, the economy is likely to start growing a little better.

Until then, it's going to be a very rough ride with little chance of a soft landing.