The world economy is actually in excellent health, notwithstanding occasional warts. The price of oil is near US$100 a barrel because the strongest economic growth I have seen in my lifetime is lifting all commodity prices. The high price constitutes a welcome market warning to consumers to slow consumption, and to producers to increase exploration. Credit markets are okay in most of Asia and Africa. They have been roiled in the U.S. and Europe by the sub-prime mortgage problem. An excellent market invention (securitization of loans) made it possible for poor people to get home loans earlier denied to them. The defaults arising from excessive adventurousness on the part of banks constitute a modest social price for increasing financial access to the poor. The penalty for excesses has been paid by those most culpable, who have the deepest pockets. The U.S. may indeed be slipping into a mild recession, but that is an overdue warning from markets that living beyond your means is not feasible forever, and that Americans need to curb their consumption.

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