World Credit Crisis: More Than August Blues

Can we file the August sub-prime mortgage meltdown as another episode of Manias, Panics and Crashes – to use the title of Charles Kindleberger’s book? After all, the world economy is reasonably healthy, and the hard landing of the United States economy that some commentators have been predicting for years has so far failed to materialise. Is this right? Can the fact that short term conditions allow relatively easy adjustments make us oblivious to structural issues? Are we really aware of what is going on and can we control global financial markets?