Have ever been a fan of the wonderful Asterix comics, you know that the ancient Gauls were a very brave people who didn’t know the meaning of fear. However, there was one thing that they were afraid of, and that was the sky falling on their heads. Of course, the sky actually never fell. But that didn’t stop the Gauls from thinking that it might fall.

I think the world’s financial markets have reached a stage when a lot of people are convinced that the sky is actually falling. The kind of fear and panic one sees around nowadays is unprecedented. Unlike earlier, the fear and panic is coming from some unusual directions.

In a report assessing economic prospects, the World Bank has predicted that the world’s annual economic growth will slow to 0.9%, from 2.5% in the year 2009.

The politicians and bureaucrats of the world are the people who seemed to be genetically engineered to be cheerful about economic prospects. No matter what happens, the official word in most countries is always that things are fine and getting finer. But for the first time in living memory, over the last few months, these professional optimists have changed their tune. And that’s a scary prospect.

In the United States, where the crisis first appeared, the pace and the intensity of the change of tune has been stunning. As recently as September 15th, the accepted wisdom was that erring financial firms should be left to fend for themselves and the crisis would basically work itself out with a little more pain.
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