As we go to press the financial panic that made the headlines across the world in August seems to have subsided.
The message now from many of those who panicked is that nothing was or is amiss. After all, they say, the panic was only in the financial sector, not "the real economy". But it was not so simple.
It resulted from old fashioned financial chicanery. Banks, hedge funds and wealthy individuals (you had to invest a minimum of $5 million to take part) set out to make easy profits by providing mortgages at high interest rates to Americans too poor to borrow from the usual sources. As this "subprime mortgage market" boomed, financial interests across the world clamoured to take part, borrowing billions from each other to get a share of the action. There was hardly a respectable bank in the world not involved.
Then a slide in house prices and a slowdown in the US economy suddenly combined to make the poor too poor to keep up with their mortgage repayments. Bankers, hedge funds and rich parasites could not extract from them the money they needed to pay back other bankers, hedge funds and rich parasites.
Two hedge funds connected to a major US bank came close to going bust, as did two state banks in Germany. For a day or two it looked as if the whole process of borrowing and lending which keeps businesses going might grind to a halt, since no financier was certain whether any other had the funds to repay any debts. This was the "credit crunch".
Then on 18 August an emergency meeting of the US Federal Reserve Bank agreed to provide extra support to those in most trouble (those financiers, or course, not the poor mortgage borrowers), and everything suddenly seemed all right.
Except what happened was not some accident. It was a rerun in slightly different conditions of the stock exchange panic of 1987 and the collapse of the hedge fund Long Term Capital Management in 1998.
On those occasions the actions of the US Fed were enough to prevent a more immediate general crisis - only for it to return with a vengeance on both occasions within two and half years. This was because the financial chicanery was a reflection of more fundamental imbalances within the world system which could not be ignored for ever.
The imbalances this time are much more serious than a decade or two ago. The world economy was only able to recover from the recession of 2001-2002 because of US consumers and the US government borrowing massively to spend well beyond their incomes, by a total of around $400 billion a year. But a point was bound to arise when such a balancing act could not work any more.
The fear on 17 August was that this point had already been reached. The action of the US Fed the next day postponed the day of reckoning, but no one knows for how long. Meanwhile, more than a million working class Americans face the loss of their homes this year.