What might occupy the rest of the world is the value of paper I.O.U. debts received from America in payment as they contemplate whether America will move the goal posts to crawl out of its worst financial crisis of the last 60 years. The rhetoric of American presidential candidates is a minefield for planners—protectionism, promises to back out of WTO rules, and hints of state intervention in the capital machine, mortgage subsidies and moratoria on private debt are telling signals of potential derailment of the global economy.

Then there is the virtual world of Wall Street. Few have observed that the outflow of “hot money” cash from, say, the Hong Kong Stock Exchange, either originates from Wall Street to cover losses back home, or that Chinese investors are closing the year of the pig before the New Year holidays start in about 10 days.

Wall Street lives in its own make-belief world of mathematical indices, computer-generated “quantum” trades, chart waves and hyper-leveraged finance. It is the only place where one can leverage US$2000 by a multiple of 500 and make a million-dollar bet on government bonds, industrial materials or invented indices, even volatility of other indices—all with a very small margin for error. The antiquated headline is about the value of shares in 30 companies, in a market where thousands of shares are traded. In turn, this headline triggers computer programs to buy and sell. Add this hyperactive world to two other factors of lax controls and policy tools with a massive U.S. trade deficit, and it is easy to see how it is a domestic problem for Americans.

First, it seems that regulators, market supervisors and policy makers where asleep at their desks or they were swamped by mind-numbing “financial products” blended with herd behaviour. A jumble of derivatives distorted lines between investment, insurance and surety (itself a regulated industry), valuations and integrity of structures, the ratings process, and the rules of disclosure. The result is the self-defeating mess today: banks sold incredible amounts of “sub-prime” debt (of more than two million overstretched borrowers) to colleagues on Wall Street after an insurance company assured the buyer, the rating company magically upgraded the “quality” of the credit and another bank acted as a broker and advisor. Everyone in the chain claims to have made a profit in trading a $100 debt, if and when fully paid over the next 30 years, and valued to be worth more than $110 to the final holder. What colour rosy glasses were they wearing, I wonder?

Now that the debtor has defaulted on his mortgage, and the insurer is called upon to make good on its policy, the blame shifts to overstretched insurance companies unable to pay? Or is it the fault of the rating team that was economic with the truth? Was the regulator aware, or in collusion with the players? And how should it all affect a Moroccan or Malaysian shoe maker? Did Wall Street game the U.S. government and presume it would be bailed out? Was there an unwritten promise to return to the “junk bond” era and Resolution Trust Corporation of the Reagan days? Why are New York State regulators are now leaning on banks to bail out those insurance companies? And how does this cross-town bailout in New York help Main Street?

If you speak with two people these days, you might get three different answers. But it seems the game is up and the regulator blinked first: The massive 75 basis-point cut in interest rates by the Federal Reserve was the first installment to bailout of Wall Street (and not Main Street). This move is against the principles and the basic mandate of the Federal Reserve to control inflation on Main Street.

The second lesson is a much more obvious one for the rest of the world. Americans consumed 6.2 percent more than they produced in 2006 and financed their country's trade deficit with debt that sucked in savings from the world. Any enterprise, company, household or club that spends more than it earns is commonly labelled as reckless and financially irresponsible. In a deeper analysis, this is essentially a reminder of the America of 1870s with an unpopular Republican president, soaring oil prices, a devalued dollar, and the opening of American plains to agriculture. The unwinnable faraway war of the Turkish sultans and his Egyptian allies in Crimea ought to be added to this mix to give us a better perspective of today’s problems. Sultan Mejid, his massive foreign debts notwithstanding, spent the rest of his treasure on building the Dolmabache Palace in Constantinople (dare I compare it with the takeover of the Green Zone in Baghdad?). The Sultan had no choice but to mortgage future tax revenues to foreign creditors. Concurrently, the Egyptian Khedive insisted upon the world premiere of Aïda at the Cairo Opera House, which eventually forced Egypt to sell its share of the Suez Canal. Does that serve as a clue? Freedom Fries anyone?

As I wrote in August 2007 it is the tip of a large iceberg. The worries of the rest of the world are not about daily movements of market indices. The real markets will go about their business in other countries. However, the world is wondering if the next American administration will radically junk away globalization. Will America blame WTO for its faulty finances? Can America reformulate its finances and tolerate an extended Japanese-style asset inflation, and rolling recessions from industry-to-industry? Can the mass consumer of the world break its self-crafted political isolation and return to discussion table with the rest of the world? Alternatively, will there be more hot air and talk therapy to keep the self-isolation bubble? In either case, we have to wait for the foam on the proverbial Starbucks triple-dosed cappuccino, and the hype that ensued, to settle down and cool off.