Back in February when all this credit crunch talk seemed like some fairly abstract, far fetched nightmare, we wrote about an article called Nouriel Roubini’s Twelve Steps to Financial Disaster, partly because like, Yves at Naked Capitalism, we quite enjoy those kind of apocalyptic economics lessons and partly because it felt important to try and better understand the likely outcomes of the financial upheavals which were dominating the headlines at the time. This week, perhaps unsurprisingly it’s HL’s most read article and horrifyingly enough, as Brad Setser pointed out yesterday, we’ve pretty much reached step 12.

Nobody knows what comes next-we are (and have been for sometime) in expectional and unknown waters, the affects of which will be felt for years and years to come by everyone of us. As Paul Krugman notes;

Angela Merkel has revealed her deep limitations…..Her comments echo word for word the “we’re alright Jack” attitudes of Euro-pols during the first US banking crises in 1930-1931, until the storm hit Europe and the entire cast was swept away by furious electorates, or simply shot.

It’s the stuff of revolutions and wars and Neil Young songs.

(but not necessarily in that order)

To quote the mighty Canadian prophet;

Don’t let it bring you down
It’s only castles burning,
Just find someone who’s turning
And you will come around.