We now have different worries about the global economy than we did a year ago, but that should not make us optimistic. Some big industrial economies are showing signs of recovery, but the long-term build-up of almost insoluble problems is getting more dramatic.

Instead of banking problems, markets are worried by the fiscal fragility of the states that stepped in to prop up tottering banks. Credit spreads on government debt are widening. National bankruptcies are conceivable.