(FORTUNE Magazine) – The bad news comes out of New England like a throbbing headache, in waves. Massachusetts, in particular, is suffering from a horrendous post-boom aftershock. Losses in key industries -- computers, real estate, and banking -- and poor prospects in others have stripped the celebrated ''Massachusetts Miracle'' of its bloom.

Troubled by outdated products or strategies, Wang Laboratories, Prime Computer, and Data General, long pillars of the Boston-area high-tech community, are cleaning house with massive layoffs. Wang is cutting its work force by 9,000, to 22,500. Prime will dismiss 2,500 employees, 21% of the total. Data General will shed 2,200, or 16%, of its workers. Warns Barry Willman, an analyst with Wertheim Schroder: ''This is not the end. These companies could still find themselves downsizing even further in 1990.'' Beyond high tech, GM earlier this year closed a plant in Framingham, Massachusetts, and put 3,300 people out of work. The rest of the Northeast is in sad shape too. Banks and the real estate industry are under pressure from overbuilding in the condo market. Bank of Boston's problem loan portfolio -- which includes the region, Texas, and Florida -- has grown by $578 million, or 47%, in the past year, and will continue to grow. Bank of New England, which plans to lay off 800 people, is also exposed in the Northeast's real estate market. Assets acquired through foreclosures have jumped tenfold in a year to $229 million. Bad loans will continue to surface for some time at other banks. Says James McDermott, an analyst with Keefe Bruyette & Woods: ''The fourth quarter is going to be messy.'' Sluggish growth in the service industries and possible cutbacks in government employment -- Massachusetts, which has a vastly overstaffed state bureaucracy, is facing a huge deficit -- could further damage the real estate market. The region's 4% unemployment rate is sure to catch up with the national average of 5.2%. Home foreclosures are rising in the once torrid resale market. Says Margie Minkler, a Boston-area appraiser: ''What scares me are those people who bought a home two years ago. Their company has laid them off, and they're not going to get the money they put into it.''