The expression "to head south" or "to go south" is an American idiomatic expression meaning to fail, lose value, or go wrong. The expression originates from a combination of visual conventions involving graphs and maps. The term is frequently use in business and technical discussion.
The first recorded use of the expression "to head south" appeared in 1974, but in a context that makes it clear that the expression was already a well-known one in financial circles to indicate a decline in the stock market. Use of the term seems to have spread from business into technical discourse, and it began to become very common in the early 1990s, perhaps as part of the general spread of computer jargon into everyday speech. "Head south" was used to describe any failure or collapse, whether in a computer system, a business model, or even a social situation. "Things were going fine until his ex-girlfriend turned up," a speaker might say, "and that's when everything started to head south."
The origin of the phrase "head south" seems to lie in the traditions of visual representation. In a chart or graph, a decrease or decline is often represented by a downward trend. For instance, if sales of a product decrease, the line showing sales will begin to move downward. This practice ties in with traditional symbolic systems which associate downward movement with negative experiences: consider, for instance, the symbolic directions in the expression the "rise and fall" of someone or something.
In cartography, south is traditionally represented as down relative to the orientation of the reader. As a result, "south" became a slang term for "down." Since "down" was associated with negative experiences, the same applied to "south." The result was that "to head south" or "to go south" became a term for declines in market figures, and from there developed into a term for any kind of catastrophe.
A similar expression, "to go west" or "to head west," existed in British slang in the 20th century, particularly in the years between the First and Second World Wars. It does not seem to be related to the expression "to head south," but may refer to the ancient belief that the spirits of the dead migrated to the west, in the direction of the setting sun. It may also be connected with the idea of a wounded or dead soldier in the First World War being shipped from France westward back to Britain.