Ritholtz quotes from a recent quarterly statement by Hologic, a manufacturer of diagnostic and medical imaging systems and surgical products:

"This year will be challenging for our entire industry, as many drivers of our business remain uncertain," said Jack Cumming, Chairman and Chief Executive Officer. "The severe and rapid economic downturn, result[ed] in a decline in hospital spending ... we witnessed an unprecedented decline in demand for capital equipment at the end of the quarter ... Hospital systems across the country have responded to tightening access to capital by restricting capital expenditures, implementing tight spending controls and reducing personnel." (emphasis added by Ritholtz)

I had doubts about the onset of deflation, because it appeared to me that prices were merely falling off absurd early-2008 highs that were fueled by hot money rushing out of collapsing derivatives markets and into commodities, beginning in summer 2007.

A collapse in capital goods orders is what I thought would signal the onset of deflation in this environment - and I was NOT expecting to find it in medical equipment of all places.

I don't need any more convincing, thank you.