Welcome to September. The holiday season is winding down: The Americans and Canadians celebrate Labor Day on Monday, and the Japanese will observe Respect for the Aged Day on Monday September 18. But apart from that, and despite minor local holidays (such as Our Lady of Seven Sorrows in Slovakia on the 15th), the world is going back to work this month. The markets will be open, and trading volumes will perk up. Even the Jews have to work harder this year: apart from Yom Kippur, on Monday October 2, the Jewish holidays all fall on weekends. Too bad, then, that the outlook is negative. Leaving aside the looming confrontation with Iran, the recent economic data from the developed world is disappointing in the best case - and highly disturbing in the worst. Let's remember that the global economy has just enjoyed the best period of sustained general growth since the early 1970s. A slowdown was therefore to be expected, although that doesn't make it any the more welcome. The big question is how long and severe this slowdown might turn out to be. It has been clear for at least several months that the US economic expansion is past its peak, with growth set to slow in the second half of this year and into the next. However, the extent to which growth slowed in the second quarter came as a shock - which the slight upward adjustment in revised figures published Wednesday does not really mitigate. Behind the macro numbers is the appalling reality of a real estate market that is not merely no longer booming but seems to be heading into a large black hole. The data regarding housing activity have rapidly mutated from worrying to gloomy to disastrous. The biggest building companies in the US are vying with each other in measuring the severity of the downturn - the worst in "several decades," "40 years" and even "53 years" - depending on who is measuring which indicator. In any event, with the housing prop gone, the entire domestic economy is facing a new and grim reality, with the result that forecasts for growth next year vary between low and negative, with the consensus moving lower over time. This is grim, but not surprising. Until very recently, the hope had been that although the American economy would slow, those of Europe and Japan would continue to improve so that the overall picture would be more balanced. Unfortunately, that is looking far less certain. Recent German data, both sentiment surveys and hard economic numbers, indicate that the expansion there has run its course and is now set to fade. The prospect of a three percent hike in VAT next January is depressing enough, but the upturn may not even last that long. In Japan , too, the data are coming in beneath expectations - whether they relate to inflation or to industrial production. All this may dampen the strong resolve of central banks to tighten monetary policy; but even if it does, the impact of the interest rate rises already made still has to work its way through the system. There remains China, of course. As usual, growth there is very high, and the authorities are making efforts - or at least say they are - to slow the rate of economic expansion. If these efforts succeed over the next year, the outlook for the world's key economies is uniformly negative. Yet even this black cloud has a couple of silver linings: Bond yields are falling in the US and most other developed economies. More important, oil prices have dropped significantly in recent weeks, briefly falling below $70 a barrel this week. Given the prospect of weakening global demand and ample supply, oil prices would surely fall much further; indeed, there are oil analysts sufficiently encouraged by the recent trend to predict a price in the $50s before year-end. But that ignores the small matter of "geo-political concerns," aka Iran. While the northern hemisphere was on vacation, the UN moved steadily toward confronting Iran over its nuclear program. Next week, the Americans and Europeans will demand sanctions, and it is not impossible that Russia and China will acquiesce; if not, the Western countries will probably proceed on their own. Continued high oil prices are the last thing the global economy needs right now, but that may nonetheless be what it will get. What is for sure is that September is going to be a fun month.