Here's my latest summery.
We are now into phase two of the crunch. Basically phase one was the credit crisis which swept the western world, behind the scenes. The quick action - compared to 1929 - of funds injection and backing, caught the wave just as it was about to toss the world into an abyss.
That crisis is essentially over, unfortunately however a deeper layer is creeping forward - the hidden derivatives crisis. Will that break? No one is sure - maybe, maybe not.
Phase two happened like this. US stock markets rebounded on the news that all major governments had stepped up to guarantee the banks, and inject fiscal stimulus packages. That lasted as I watched, about two to three days. Then US investors looked around, and all of a sudden (?? stupid people) recalled that US was heading into a recession before all this happened. Main Street was not only crumbling, but the Financial Crisis had exacerbated the decline. They sold stocks again. And they have been selling ever since.
This second wave is now beginning to break on the developing world economies. Most of them, including some of the vulnerable second tier countries like the Baltic states and Iceland, do not have the reserves to step in and halt the slide. This covers Africa, South America, Asia and East Europe.
It appears that the 'new power' countries, China, India and Brazil, have the stability to withstand the worst of this second wave, but the rest collapsed last week.
The comment from the experts is that if this hasn't affected you yet, it will soon.
Some curious details:
In Australia, BHP Billiton and RIO are very upbeat about their future resources business with Asia. ANZ bank is confident that Australian banks and property values will hold. Local supermarket giant Woolworths is showing a record profit.
This is all tied to the question of whether Asia will crumble at last, after withstanding the first wave. Most commentators seem to think only the big two, India and China, will escape, and the rest will crash.
Vast sums of money are racing for cover across the world. Where to? To the big economies, and away from the small - 'big is safe' is the mantra. The biggest is US bonds market which is why the US dollar has risen. But many sober analysts are rolling their eyes at this - USA is on the brink of national bankruptcy. Those bonds may soon become worthless. The problem for large investors is where to park trillions of dollars of cash - huge amounts can be lost in an hour by being in the wrong place.
Jahn is correct about inflation solving some problems, but at a cost, and no country want to go that way. The problem is that no one can work out whether this downturn will be accompanied by inflation of deflation. This is a mystery right now, and it does make a big difference.
On the moral side, we have Gordon Brown and Sarkozy stepping forward in a bold leadership move, to initiate a new global financial and business paradigm. But is it really new? More to the point, are they putting forward a drastic revolution or a patch-up job?
It's a patch-up job.
Reason is, that despite all the hoopla, the pain is insufficient to leverage big changes. The old guard are still entrenched, and so is their philosophy. A little regulation and a little centralisation - that should fix things and then we'll be back to business as usual.
Witness the sneaky assault by the US on the credibility of Dominique Strauss-Kahn, the IMF boss - highlighting an internal investigation about his affair. That man has been too vocal recently, and needs to be put in his place - recall what happened to Joseph Stiglitz.
Witness the scandal of the huge bonuses and payouts in the Wall Street banking sector, of over $70bn! - money coming straight from taxpayers funds into the pockets of bank employees. Why? Because they don't get it - they believe this is a short hiccup in the gravy train, which will soon be back to normal.
The changes being evoked by this roll of crisis, are just too dramatic for anyone to contemplate. For God's sake, I haven't even heard anyone mention the Tobin tax yet.
I feel the human race is now entering a valley which will change the face of our species for many centuries to come. This will reveal itself over the next 50 years, and possibly in a much shorter time than that. Personally I do hope the global economy doesn't collapse in a pile of shit, because gradual change is more effective and lasting than violent change - on a social scale that is.