A new potential crisis in Greece makes our stock market worries about oil prices here in Canada seem trifling.
That said, trouble in Greece and a reawakening of economic distress in Japan remind us that the deep wounds of the 2008 economic crisis may have been bandaged, but the healing process is far from complete. We could still face unpleasant surprises.
This week's financial headlines sound like a recap of the horror stories of the last six years. Greek shares plunged 13 per cent on threat of turmoil. Gold begins to rise (a bad sign unless you own a lot). Shanghai stocks take their biggest plunge in five years. Japan's economy shrinks nearly two per cent, much worse that previous estimates.
In Greece, the stock market had its worst day in 27 years as Prime Minister Antonis Samaras played chicken with the opposition Syriza party in a move that could see the government fall. Syriza represents Greeks who are still bitter about the austerity forced on the country to protect bondholders and keep Greece in the Eurozone.
All of a sudden, it seemed nothing had changed since I wrote about a crumbing Greece at the heart of a crumbling Europe four years ago. Suddenly Greek default and a Euro exit were back on the table.
It reminded me of Thomas Piketty's warning that if inequality persisted "some countries will choose to turn against globalization" by voting for anti-capitalist governments.
In Japan, the situation is in some ways far more complicated. But once again the country's latest troubles take me back more than four years to when I contrasted the strategies of Japan and Ireland on how to deal with a shrinking economy. Japan's plan was to spend its way to economic health. Ireland's route was austerity.
So far it appears Ireland is winning that bet. As Japan sinks further into the mire, the rating agency S&P has once again upped Ireland's credit rating. The Irish economy is expected to grow at a rate of nearly four per cent between now and 2016.
The Irish case might be a lesson in favour of taking your knocks now rather than putting off a resolution till later. But that is exactly the opposite of what most of the world has done.
For the most part, the fix for the world economy was a patch job. China, Europe and the United States flooded the world with money. Countries like Canada pulled out the stops to provide the booming Chinese economy with more and more commodities.
Now we are seeing signs that the patches are leaking. In some places the bandaged wounds are festering.
The rush to produce commodities created a glut. The austerity forced upon the countries of southern Europe has not led to the kind of success that the Irish forced upon themselves. A brazen attempt to shock Japanese consumers out of frugality by dumping even more cash into the Japanese economy and then taking it back in taxes seems to have fooled no one.
With an election under way there, the opposition doesn't seem to have any better ideas, and the government is expected to be re-elected.
Yesterday chief economist at the bank HSBC, with the same name as a famous horror author, Stephen King, revealed some scary prospects of his own, issuing The Top 10 Risks for 2015.
Among the scariest, a hard landing for China, a sudden rise in U.S. interest rates, another new attempt to fix the Japanese economy that goes terribly wrong — all created by the unresolved problems of our last financial crisis.
"We have done our best to come up with tales of the unexpected, ideas not yet on the radar screen or views that the consensus has largely ignored," King says in the introduction to the report. But with the document already in the pipeline for a Tuesday publication date, even HSBC gloomsters did not include new fears of a Euro area disintegration threatened by a Greek presidential election.
Fortunately this is not Murphy's world where everything that can go wrong will go wrong. The Greek market response to the threat of Syriza may concentrate the voters' minds. China along with Fed chair Janet Yellen may be able to finesse a reduction in stimulus. Japan may finally turn its economy around, though that could be the toughest challenge of all.
Despite the commodity crash, there are early signs that Canada can join the U.S. in nudging the North American industrial economy back into gear. If we can accomplish that, it will be our turn to carry the load, giving the rest of the world a little more time to heal.