Its 12 months since Lehman Brothers failed, triggering the worst stage of the global financial crisis.
That saw world markets taken to the brink of collapse and the global economy slump into its first contraction since the 1930s with an intensity not seen in many economies for decades.
Thanks to the blow to confidence, US shares had their worst bear market since the 1930s and Australian shares had their worst slump since the 1970s.
But despite fears of a re-run of the Great Depression, the AMP’s Chief Economist, Dr Shane Oliver says the world has pulled back from the brink and is now in far better shape.
And Australia has managed to duck significant economic damage.
Money markets are almost back to normal, credit is starting to flow again (but demand is very weak), share markets have recovered most of their post Lehman’s collapse and economic indicators virtually everywhere are rebounding almost as quickly as they fell.
But with gold at 18-month highs, US stocks rising off recessionary lows and a rally in US bonds sending yields on some debt to the lowest since July, Dr Oliver says the investment climate is anything but typical.
The global contraction saw interest rates around the world cut to very low levels, in some cases, record lows (in the UK, US and Japan and Europe) as central banks, including the US Federal Reserve, took extraordinary measures, flooding markets with liquidity and buying the debt of their own government in a bid to keep the various financial systems working.
Private sector debt was supported, banks taken over in some countries, recapitalised in others and entire financial systems guaranteed by nervous governments.
But as economies now recover, that extra liquidity has to find a home and those record low rate have to rise back to something approaching normality.
Dr Oliver says the big question is how long the atypical investment climate will remain.
Much, he says, depends on when central banks end those extraordinary actions, known as quantitative easing (QE), and why they end it.
"To be sure various issues and uncertainties remain – unemployment is still high and/or rising, consumer spending will be constrained by high debt levels and falls in asset values and the fiscal and monetary stimulus will eventually need to be unwound.
"But the outlook is far brighter than was the case just six months ago.
"There are numerous lessons from the events of the past year.
"At a macroeconomic level it reminded us that there is still a business cycle, but that government policy makers have a set of tools they can use to stabilize it.
"In other words monetary and fiscal stimulus does work.
"It also highlighted the importance of sound regulation of the financial system, which partly explains why Australia has faired far better than the US.
"For investors the key lessons are: that periods of high returns are often followed by poor returns, higher returns always come with higher risk, be wary of financial engineering and products that are too hard to understand, be wary of having too much debt, and don’t think that having a well diversified portfolio of growth assets will necessarily protect you in a severe panic," he wrote Friday.
The head of the International Monetary Fund warned at the weekend that the global economic crisis isn’t over yet, despite positive signals from some of the world’s major economies.
IMF Managing Director Dominique Strauss-Kahn was quoted as saying in an interview with German weekly Der Spiegel: "In the minds of too many – not only regular people but also top politicians – the financial crisis is already behind us.
"That way of thinking is dangerous," he was quoted as saying. "The global economic crisis continues despite the fact that Germany and France saw some positive growth figures for the last quarter."
The US has seen some extraordinary measures and a surge in deficit spending and debt issuance, and we got a further confirmation of that late last week.
Figures out Friday showed the US Government has its 11th straight monthly deficit in August with a shortfall of $US111.40 billion.
With one month to go in the 2009 fiscal year, which ends September 30, the deficit stood at a record $US1.378 trillion, versus a same year-ago deficit of $US500.53 billion.
The White House budget office has forecast a $US1.58 trillion deficit for the full 2009 fiscal year; that suggests September (normally a surplus month) will see a deficit of more than $US200 billion.
A September deficit would mark a record 12 consecutive months of deficits.
US markets shrugged off that news, but also ignored better than expected news on an improving outlook for consumer sentiment.
After five up days, it was an example of what some analysts called "rally fatigue".
The Dow lost 22.07 points, or 0.23%, at 9,605.41; the Standard & Poor’s 500 Index shed just 1.41 points, or 0.14%, at 1,042.73 and Nasdaq fell 3.12 points, or 0.15%, to 2,080.90.
For the week, the Dow was up 1.7%, the S&P was up 2.6% and the Nasdaq was up 3.1%.
So solid gains overall, but the close for the Dow was also the close back in 2001 on September 10, the day before September 11 and those terrible events.
After US markets closed, three more banks failed to take the total so far to 92. The largest was the $US7 billion in assets Corus Bank from Chicago.
It was destroyed by poor property loans.
In Australia
