The gathering gloom

It burns! It burns us! It freezes! It's like October all over again, with the Dow taking a breathtaking swan dive to its lowest since 1997, below where it was when Alan Greenspan gave his famous "irrational exuberance" speech. Merrill Lynch economists have revised their forecast for global growth to -0.4 per cent. Naturally, with the US looking worse and AIG needing a bailout, the dollar is rallying as the panicked herd of global investors reels in their risk. Noriel Roubini, Dr. Doom, is having to mark his Gloom downward, and is now in Hong Kong, where after seeing sharp contractions in Asian trade and economic growth, is warning of a much more severe and longer L-shaped depression. The suicide of Irish developer John O'Dolan, one of the owners of the Ireland island in the World development in Dubai, offers a tragic illustration of how the global financial problems are affecting the otherwise healthy economy of the UAE. A great deal of the ongoing Abu Dhabi Economic Forum has been spent lamenting how the crisis has created a mysterious and impenetrable barrier to credit expansion here. This is suffocating the local economy.

warnold@thenational.ae