Why is the economy bad?

hondreds and hundreds of thousands of people haev lost there jobs, and thousands of stores are going out of buisiness, but why?? why all the sudden is this happening? everyone i ask just says the economy.. but what about the economy?? i think the main reason its so bad is this... all the money that was lost on wall street, all the homes forclosing because of very high rates, the automotive is at an extreme low (expecially ford/gm/crysler) and because all this is happening, its forcing people to spend less at stores. whish then causes a ripple effect which is why all the stores are closing, and why even more people are getting laid off. which then makes even more people get laid off and even more stores close. and thats where were at now. is this correct? is that why the economy is bad? thanks ! :)