Well, it happened. The economy fell off a cliff in September, and those who tried to stop it found themselves reaching out to catch a falling knife. The IMF has sharply reduced its global growth forecasts since the financial market meltdown.
Maybe Mervyn King is right that if Lehman's hadn't collapsed there would have been some other trigger, but the crisis of confidence certainly took hold at the same time. The US and the UK are now certainly in recession, and there are other places, too, like Ireland and Iceland, where the economy is contracting sharply. Hungary and Ukraine have gone bust. New Zealand was technically the first to get the red card - appropriately, as the sun rises there first. But until now there has been a hope that China and other emerging markets would take the strain, and prevent a global recession. The optimists argue that the Chinese economy, in particular, is decoupled from the West, and will sail on regardless.
So this month I went on an exhaust- ive and exhausting search for good news on MT's behalf. After all, we don't want to wallow unnecessarily in Spenglerian gloom, causing our worst fears to be realised.