[Cyclefrance]

I think we are on a bit of a knife-edge right now. It's a strange situation the like of which I've not witnessed before myself - and I've seen and been in a few recessions (and booms).

I was kind of expecting the fuel hikes we've seen to push the economy downwards for quite some time. The availability of growing markets in India, China and the Far East generally seemed to be able to counter that threat, but as we begin to appreciate the cost associated with these markets' growth (slave labour, pollution, contamination in products and so on) we may see a correction there as we address these issues. This will remove the cushioning effect that these markets have provided. That aside the governments and markets generally are well -prepared (i.e. bank-rolled) to try to stave off any crisis - I guess for them it seems the lesser of two evil decisions - spend to stop a mess or lose (probably) more by letting it run unabated.

Well, that's the idea, anyway, but the trouble with this approach in the past has been that the fundamentals have won every time, and trying to buck these has only resulted in a massive loss/waste of revenue as the recession has still come and it has been deeper as a result of the attempts to delay its arrival.

Certainly, I feel that a correction is due - larger than we've seen so far - and I can't help also feeling that it would be better to take the hit as it comes, as this will undoubtedly cause less pain than that resulting from what has always been a futile fight attempting to delay the day.

It'll be interesting to see how durable the Fed's half-percent interest rate cut is as a solution. There's a lot more bad news to come, I reckon...