The world has experienced shock, denial, and – as businesses beg for public funds – negotiation. Regulatory soul-searching reflects the guilt while public anger has landed on the heads of politicians in Iceland and Latvia. This brings us to depression. Stock markets in the US and Europe set new lows this week, with the Dow now down 18 per cent this year and the FTSE 14 per cent. The US government will spend almost twice what it receives in tax receipts this year, attempting to stimulate an economy that, according to Friday’s data, shrank by 6.3 per cent in the fourth quarter, a far larger downwards revision than expected. With tottering eastern European economies throwing an emerging markets crisis into the financial and real economy turmoil and trade levels collapsing in Asia, investors are not yet ready to move on to acceptance.

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