If you follow the news, then surely you're aware that we're in the midst of an epic financial crisis. Perhaps the worst since the Great Depression of the 1930s. Or maybe the Panic of 1819 or even the Tulip Mania of 1637.

How bad is it? Well, never mind that the unemployment rate is a relatively healthy 5 percent, and gross domestic product growth, as far as anybody knows, has yet to tip into a recessionary swoon. If you ask consumers, there's disaster afoot. Consumer confidence is at its lowest level since 1987, and expectations of future economic conditions are at a 35-year low. In other words, the typical American believes we are headed for worse times than the mid-'70s or early '80s, when unemployment approached 10 percent, inflation hit double digits, and wage and price controls seemed like a good idea.

Yahoo CEO Jerry Yang probably feels he dodged a missile by rebuffing Microsoft's takeover attempt and retaining control of his company. But the incoming rounds are only likely to intensify. With the collapse of Microsoft's $48 billion bid for Yahoo, here's what the struggling online giant will have to contend with next:

A shareholder revolt. The Microsoft purchase would have valued Yahoo's shares at $33 each, a hefty premium over the $19 or so they were trading at before the offer. Since Microsoft withdrew, Yahoo stock has fallen from more than $28 to less than $25, and analysts think the shares could drift all the way back down to $20 or less. For somebody who owns, say, 1,000 Yahoo shares, the difference between the Microsoft price and the post-Microsoft price is a loss of about $9,000.

You can buy books, music, TVs, groceries, and just about everything else on the Web these days. Surely all those automotive websites make it easy to buy a car, too. Right?

Not so fast. It turns out that car dealers—who control nearly all new-car purchases—don't really want you to buy cars over the Web. I learned this recently when a friend tried to lease a new crossover. With a busy job and two kids, she's got plenty to worry about besides car shopping and simply wanted a comfortable vehicle at a good price—with no hassle at the dealership. Since I write frequently about cars, I offered to help. Piece of cake, I assured her. Just do it all over the Web.

Had enough airline upheaval? Well, get ready for more. The merger agreement between Delta Air Lines and Northwest Airlines could kick off a wave of consolidation that will directly change the flying experience for millions of travelers.

If regulators approve, the Delta-Northwest deal would combine the second- and fourth-largest U.S. airlines into one megacarrier—with the Delta name—that controls nearly 18 percent of the domestic market. Some analysts think that United and Continental may soon consummate another merger, forming an even bigger carrier with nearly a 20 percent market share. Here are the biggest changes travelers will notice if such deals go through:

Memo to air travelers: Chill out.

Yeah, there's been some unsettling news lately. American, Southwest, Delta, and United have canceled thousands of flights over the past few weeks to conduct emergency inspections, following a Federal Aviation Administration crackdown on safety procedures. Four small carriers recently stopped flying, leaving customers holding worthless tickets. Delays are nearly at record levels, flights are more crowded than ever, and airlines are adding every surcharge they can get away with to help offset soaring fuel costs.

If you've got plans to fly anytime soon, pack extra cash, bring a long book, and wear elbow pads.

Just about every air-travel trend is getting worse, driven largely by soaring jet-fuel prices. To save money, strapped carriers are adding every surcharge they can get away with, raising fares, eliminating perks, and cutting back flights.

When I was getting divorced a few years back, my former wife and I spent most of our time arguing over—what else—the past. The only practical benefit? We became better arguers.

As a nation, we now seem to be having an economic argument about the past. Did a recession begin late last year? Or early this year? Or not at all? I'm not sure what we get out of this, especially since a recession, if we're in one, will be more than six months old by the time we're even sure it exists.

The party's over, the hangover hurts, and woozy consumers are finally asking, "What the heck just happened?"

With 2 million home foreclosures possible over the next two years and the economy stumbling toward recession, it's clear that Washington will enact new reforms meant to curtail reckless lending, attach big-print disclaimers to risky securities, and prevent any more self-triggered implosions in the financial markets. The Federal Reserve has already engineered one Wall Street bailout, something it may have to do again. Congress, the Treasury Department, and other regulators are proposing dozens of new rules. Some of them might work.

Economists will eventually write volumes to explain where the Great Housing Bust of 2008 came from. But for now, a few choice statistics do a pretty handy job. James Barth and several colleagues at the nonprofit Milken Institute have written a number of studies that plumb the causes of the subprime meltdown and the ensuing damage. Some data points that help depict what has happened:

Percentage of all mortgages bundled into securities, 1994: 55.8 percent; 2007: 74.2 percent

This commentary aired on PBS's Nightly Business Report on March 27, 2008:

It's always the little guy who gets fleeced, while the smart money sneaks out the side door.

Right?

Well, not this time. With the subprime crisis metastasizing throughout the financial system, we're seeing something that's as reassuring as it is troubling: Wall Street is taking its lumps along with everybody else.

Expect to hear a lot more from Tata Group, the big Indian conglomerate that just bought Jaguar and Land Rover from Ford.

The sale of two iconic luxury brands to an Indian automaker known for commercial trucks and the diminutive Nano—a $2,500 "world car" that's 2 feet shorter than a Mini Cooper—might seem surprising. But the $2.3 billion deal has been in the works for months, and it fits clearly into an ambitious expansion plan meant to make Tata one of the world's leading brands in a number of marquee industries.

Is it a deft financial move? Or a nauseating corporate handout?

The Federal Reserve's intervention in the collapse of investment bank Bear Stearns has clearly calmed financial markets that recently seemed on the verge of panic. Now comes the backlash. Some populist critics are asking why the feds can bail out Wall Street but not Main Street. And the die-hard free marketeers who run the Wall Street Journal's editorial page have decried Fed policymakers as "pushovers," arguing that the Fed's action enriches JPMorgan Chase, which is buying Bear Stearns, at taxpayer expense.

How to characterize the Fed's action is a matter of ideology more than anything else. But there's certainly some benefit to the public from the Fed's intervention. Here are some of the basic facts, which tend to get overlooked as the rhetoric heats up:

Do government regulators jam to E Street Radio? Or crank up Liquid Metal? Or snicker at Howard Stern?

Maybe so. It took the Justice Department a year to officially ascertain what many consumers already know, but its ruling on satellite radio is evidence of a pretty hip attitude toward music and technology. By approving a proposed merger between the two big satellite radio operators, XM and Sirius—which both lose money, even though listeners love them—Justice may help secure an important source of music and other entertainment that's now threatened by mounting losses.

Here's one of those complex economic truisms the financial press assumes everybody understands: A big reason oil and gas prices are hitting record highs is that the dollar is hitting record lows. Got it? The world's petroprinces evidently do. The limp dollar has prompted a bickerfest between President Bush, who's been urging the OPEC oil nations to produce more oil so prices will fall, and OPEC leaders, who say the problem isn't limited production but the weak dollar and economic woes in the United States.

Makes perfect sense—as long as you have a Ph.D. in economics. For those who don't, I asked Kristin Forbes, a professor at MIT's Sloan School of Management and former member of the White House's Council of Economic Advisers, to help explain how exchange rates affect gas prices:

Now that oil prices have crested another heady threshold—settling above $100 per barrel, for the time being—it's time for motorists to start contemplating another once-implausible scenario: pump prices of $4 per gallon.

Just a few years ago, auto-industry futurists thought that $3 gas would be a game-changer, unnerving consumers and forcing dramatic changes in their choice of cars and driving behavior. Since then, gas prices have spiked above $3 several times, but they've usually drifted back down. Until now. Since last summer, gas prices have steadily ticked upward, to about $3.20. And with the spring and summer driving seasons approaching, many analysts think increased demand and other factors could drive pump prices higher still. "Four-dollar gas is possible, maybe even probable," says Bill Reinert, national manager for advanced technology at Toyota. "We could even see $5 gas."