KEY POINTS:
All the election euphoria in the world couldn't stop Wall St resuming its slide this week.
While the Americans paused to elect their new President on Wednesday, it felt like the whole world took a break. On the big day - and in the days leading up to
it - it also felt briefly like the credit crisis had abated.
But it hadn't - it has been back with a vengeance in the past two days, Hollywood style, all guns blazing.
On Wall St markets fell 10 per cent in two days. Japan's Nikkei has also dropped about the same amount after some nasty profit announcements from the likes of Toyota.
In Australia two struggling companies finally collapsed, revealing the scale of the debt they had racked up with the big four banks.
Between them investment company Allco Finance and childcare company ABC Learning have left Westpac, ANZ, Commonwealth Bank and National Australia Bank with more than $1 billion of bad debt.
Receivers have revealed that ABC alone had total debts of A$2.2 billion (not all of it with the Aussie banks).
In the UK even a record 1.5 per cent rate cut by the Bank of England couldn't lift the spirits of London brokers and markets kept falling.
In economies around the world the focus has shifted from concerns about the destruction of retirement savings to the destruction of jobs and the havoc that high unemployment can cause.
In short, it still looks pretty grim.
Given the scale of economic problems, Barack Obama faces an enormous task to live up to the expectations. But he can take some comfort from history.
In 1932 Franklin Roosevelt inherited a US economy in far worse shape. Unemployment was sitting at 25 per cent. Inflation would have been a pleasant surprise. The nation had a far worse problem - deflation of more than 10 per cent.
Nearly 40 years later Ronald Reagan also inherited an economy in terrible shape - unemployment was at 7.5 per cent and inflation running hot at 12.6 per cent. Both these Presidents presided over strong recoveries and both are now rated among the best ever by Americans.
Given the cyclic nature of capitalism, it is probably better to inherit the mess. Obama isn't getting control of the economy at its lowest ebb, there is more pain to come, but the bubble has burst. He might just be picking up a bargain.
Liam Dann is the Herald's business editor.
