I know I've been on this topic before, but I still can't believe that "strategists," analysts, investors, and the media were so quick to accept the Pollyannaish delusion that the rest of the world would be relatively unaffected by a downturn in the United States.
They went along with this canard even though U.S. gross domestic product is nearly three times that of the world's second biggest economy, Japan, and quadruple the output of China (which was just declared the world's third largest economy).
Some might even say that the ignorance reflected in that belief was almost on a par with the once popular notion that the U.S. would avoid recession in the face of losses of trillions of dollars of housing and equity wealth and the worst financial crisis since the Great Depression.
Regardless, the headline accompanying the following report by the Telegraph's Ambrose Evans-Pritchard, "OECD Warns Over Growth in China, Germany and Russia as Downturn Goes Global," should come as no surprise to loyal readers of the Financial Armageddon blog.
China, Germany and Russia are showing the fastest pace of deterioration among large economies as the entire global system succumbs to a "deep slowdown", according to the Organisation for Economic Co-operation and Development.
The warning came as China's Banking Commission said it would prove "exceptionally difficult" to meet the country's 8pc growth target for 2009, the level seen as crucial to prevent unemployment from rising and setting off civic unrest. "The downside risk to the Chinese economy is even worse than expected," said the chief regulator, Liu Mingkang.
The OECD's gauge of "Leading Indicators" – which gives warning of trend changes a few months in advance – shows an abrupt rupture in Asia and among commodity producers, with the most damage surfacing in countries with an export surplus that depend on sending goods abroad.
The index for Russia has seen the sharpest slide, falling 4.3 in November, China fell 3.1 and Germany was down 2.0, the worst performer in the G5 bloc for the third month in a row.