When I was creating my fall outlook in September during the calm before the storm (oh, the days of the S&P 500 above 1,200), one of the more alarming quotes I included was the following from Alan Mullaly, CEO of Ford (F):

“Not only is the U.S. in a recession, but the rest of the world is slowing down… I’ve never seen anything quite like it… We think we’re going to be relatively flat through 2009 and we don’t see the start of a recovery… until the latter half of ‘09 and ‘10…And that’s basically moved out a year, year and a half from what everybody thought about four or five months ago.”

Even with Ford’s languishing share, they are still an important proxy for auto demand, particularly in the area of light trucks, and this makes their forecasts worth listening to (even if the company never seems to be able to capitalize on them). A similar case exists for wallboard maker USG, which provides key building materials to both residential and commercial markets, and thus has a finger on the pulse of economically important construction spending. Digesting their earnings release and conference call transcript doesn’t paint a nice picture for cyclical industrial companies, but it’s necessary to understand how the housing bust has come full circle.

To describe my take on what’s happening in a word: acceleration. The spread of the problem has gone from weak demand for USG’s products to an inability to renew financing, and that’s a theme that has been repeated by a diverse group of companies. CEO Bill Foote said, “We are clearly having a new phase of this economic crisis,” as spending declines accelerate in North America and begin to take place abroad. Further, the deepening of the credit crunch seems to have put a stop to what might otherwise have been the tentative formation of a bottom in residential real estate.