I'm sorry BA! You are in a real pickle. Because, as you have discovered, you can't try to talk him out of this. He'll think you are just trying to cheer him up, or you are the one who doesn't see reality, or come up with some other reason to justify the way he feels. I think that he is to the point where if you said the sky was blue, he would insist it was green!
His mental state has gone well beyond this engineer's ability to analyze! He needs something, but I have no idea what it is. I can see that he is hurting, and it is taking you, and to some extent your kids, down with him.
