With Greece and Ireland in economic shreds, while Portugal, Spain, and perhaps even Italy head south, only one nation can save Europe from financial Armageddon: a highly reluctant Germany. The ironies—like the fact that bankers from Düsseldorf were the ultimate patsies in Wall Street’s con game—pile up quickly as Michael Lewis investigates German attitudes toward money, excrement, and the country’s Nazi past, all of which help explain its peculiar new status.

Our analysis casts doubt on the Tea Party’s “origin story.” Early on, Tea Partiers were often described as nonpartisan political neophytes. Actually, the Tea Party’s supporters today were highly partisan Republicans long before the Tea Party was born, and were more likely than others to have contacted government officials. In fact, past Republican affiliation is the single strongest predictor of Tea Party support today.

As the economy worsens, President Obama and his senior aides are considering whether to adopt a more combative approach on economic issues, seeking to highlight substantive differences with Republicans in Congress and on the campaign trail rather than continuing to pursue elusive compromises, advisers to the president say.

Across the board it's difficult to fathom any of the six Republicans on the committee agreeing to significant new revenues. All of them have signed Grover Norquist's anti-tax pledge. None of the Senators participated in the bipartisan Gang of Six talks, which resulted in a plan that called for higher revenues. And many of them have helped lead the GOP fight against increasing taxes in any deficit package -- part of a broader bid to force Democrats to agree to significant cuts to entitlement programs.

When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even the usually impervious upper middle class had seen a decade of stagnant or declining investment, with the stock market dropping in value with no end in sight. Hope was as scarce as credit.

The stock market is in the midst of its biggest retreat since the financial crisis.

The Dow Jones industrial average plunged as many as 400 points Thursday afternoon. It is now down more than 1,200 points since July 21.Thursday's losses turned the blue-chip stock index negative for the year.

The Standard & Poor's 500 index is down 3 percent, bringing it nearly 11 percent below its recent high of 1,363 reached on April 29. A decline of 10 percent or more is considered to be a market correction.

U.S. House Majority Leader Eric Cantor (R., Va.) on Wednesday suggested that Republicans will continue a push to overhaul programs such as Medicare, saying in an interview that "promises have been made that frankly are not going to be kept for many" and that younger Americans will have to adjust.

“If the final bill is passed by establishment Republicans and House Democrats and does not include a balanced budget amendment as a requirement, it will be completely unacceptable and will be seen as a violation of the mandate that the tea party and likeminded people gave Republicans in 2010,” said Ryan Hecker, the leader of a crowd-sourced tea party effort called the Contract from America.

By Ross Douthat

The negotiations over the debt ceiling, the Republican Party had everything mapped out except the endgame.

For months, Republican leaders used all the tools at their disposal — the anti-spending intensity of their base, the White House’s desire for a deal, the specter of dire consequences if the debt ceiling wasn’t raised — to leverage their way into a favorable position. Despite controlling just one house of Congress, they spent the spring and summer setting the agenda for the country: not whether to cut spending, but how deeply and how fast.

The real problem, analysts say, is that municipal government debt in China has begun casting a large shadow over the nation’s growth picture. If instead of investing in growth, China had to start spending money to gird the banks against municipal defaults, some experts see a possibility of China eventually lapsing into a long period of Japan-like stagnation.

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

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