The worst contagion in a generation started with credit-fed fever to build and buy homes.
And while it lasted, Atlanta's super-heated housing market gave the regional economy a prosperous glow: There was record home construction, robust consumer spending and jobs by the tens of thousands.
But when the fever broke, it left the region with a cold sweat that now translates into double-digit unemployment.
On Thursday, the Labor Department reported that Georgia's jobless rate had reached 10.1 percent. The rate for metro Atlanta, which accounts for about half the state's economy, typically runs about the same.
"The job losses are just incredibly bad," said Mark Vitner, senior economist for Wells Fargo. "Atlanta has been hit much harder than the nation as a whole."
By this summer, Metro Atlanta had lost more than 6.5 percent of its jobs since late 2007, compared to a 4.4 percent loss nationally.
"In many ways, it has been a 100-year storm —- every sector has been hit," Vitner said. "It started in residential real estate and it spread to everything else."
Construction accounts for 18 percent of job losses, despite being a very small part of the workforce, said Julie L. Hotchkiss, research economist and policy advisor for the Federal Reserve Bank of Atlanta.
But when housing took ill, so did consumer spending. And so did companies that move goods on highways, rail and through Atlanta's huge airport or store them in local warehouses.
From Canadian wood to Chinese light bulbs and anything else related to housing, business has slipped.
Distribution and retail jobs account for one-third of metro Atlanta's losses —- but only one-fifth of the nation's, according to Hotchkiss.
That disparity reflects what has turned out to be a weak underbelly of Georgia's previous economic boom —- heavy reliance on service and retail expansion for job growth.
Georgia's manufacturing base is proportionally smaller than the nation's, and one component —- carpet and flooring production —- is tied to housing.
Since 2007, only five states have lost more jobs than Georgia, according to the Economic Policy Institute.
"The U.S. and 25 states have fewer jobs now than they had nine years ago, in June 2000. This is unprecedented for the U.S. since the mid-1930s," said Charles McMillion, chief economist with MBG Information Services, a research and consulting firm.
Not all the damage is due to housing woes. States with big manufacturing bases have been hard-hit as well. Michigan has the highest jobless rate: 15.2 percent.
At 12 percent or more are Rhode Island, Oregon, South Carolina and Nevada. At 11 percent or more are California, Ohio and North Carolina.
Within states, regions where housing loomed large —- southern California, Phoenix, Las Vegas, and south Florida, among others —- the story has been similar.
Last fall's financial meltdown threatened to shut off credit, as the easy-money arrangements that had supported the housing boom came undone.
Atlanta's layoffs mounted at a frightening pace. Georgia has now lost 1.6 percent of its jobs during the past nine years.
It averaged 33 percent job growth in each previous nine-year period going back to 1939, McMillion said.
Is there still reason for optimism?
Yes, said Donald Grimes, senior research associate at the University of Michigan's Institute for Research on Labor, Employment and the Economy.
The area is the hub of the Southeast, so its logistics and trade sectors will return to health, he said. Atlanta will have hospitals and major universities with large payrolls, entrepreneurs to grow new companies and a quality of life that should keep people moving in, Grimes said.
"My gut tells me that Atlanta will be one of the areas that will recovery reasonably quickly," he said.
Meantime, the job market is expected to get worse.
For jobseekers, in fact, it's already worse than the rate indicates.
The Bureau of Labor Statistics only counts people looking for work as unemployed. In its measure of "under-employment," the BLS adds those who are no longer looking or have taken part-time jobs. That number is about 73 percent higher than the official unemployment rate.
Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, said the labor market will not truly start to recover for more than a year.
He expects unemployment to peak around 11 percent.
It will likely come down slowly, since traditional job-making engines like housing are so badly hobbled, he said.
"It is not unusual to see unemployment rise for some time after the end of a downturn," said fellow economist Roger Tutterow, of Mercer University. "This is probably not the peak for unemployment in Georgia or in the nation."
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