KEY POINTS:
What a week. It hasn't had any key flashpoint - like the high drama of the Lehman Brothers collapse or the day on October 10 when the credit markets froze - but the bad news just kept piling up.
What makes the news of the past seven days
particularly depressing is that it appears to have swamped any hope that we are nearing the bottom of this market meltdown.
Even though some rallied late yesterday, stock markets in the US, Australia and New Zealand all plumbed fresh lows as investors continued to take their money and run.
The renewed vigour of the sell-off was driven by the rapid deterioration of the global economy.
The week started with the G20 meeting in Washington. There were high hopes that the world's markets - showing weak signs of resilience - might be offered another booster shot.
They weren't, at least nothing any time soon. World leaders made some vague plans for new regulation and economic stimulation then agreed to meet again by April to discuss them.
It is now safe to say the meeting - hyped by British Prime Minister Gordon Brown as a Bretton Woods 2 - has disappointed.
On Wall St the S&P 500 has retreated to levels last seen in 1997. That means all the value of not one but two bull markets has been destroyed. The crisis has also spread to the previously resistant IT sector, sparking fears of a new tech wreck.
Then there is the US car industry. This week saw the embarrassing spectacle of the Big 3 bosses reduced to begging before Congress.
In order to up their chances of getting a bailout the chiefs of Ford, GM and Chrysler had to talk up worst case scenarios for their industry and paint a bleak picture of the havoc its collapse would have on the US economy. They succeeded in scaring investors and adding to the climate of fear - but they didn't get a bailout.
Meanwhile the slowdown of the world economy continued unabated.
Recession was confirmed in Hong Kong, Japan and all 15 euro currency nations. New data in Australia made it clear they won't escape the kind of economic contraction New Zealand is already in.
Reports of mass job losses have clogged the business news wires.
In the US the consumer price index showed a record 1 per cent drop for the month of October. You'd think falling prices would be a good thing - especially given the inflation pressure the world was under just weeks ago.
But no, for economists and market commentators all the news did was raise the spectre of a far more demonic economic pressure: deflation.
Falling prices seem like an upside for most of us. Oil dropped below US$50 yesterday and in New Zealand pump prices have shed 70c since their peak earlier this year.
But those that follow markets know that this is too far, too fast - a sign that things are really out of control.
As oil prices fall so too do prices for other commodities. In this country the one that counts is dairy and as Fonterra revealed yesterday the events of the last three weeks alone have cost New Zealand $714 million.
When the price of everything falls everyone is saving money - the problem is that nobody is making any.
Still, the threat of deflation and the reality of it are very different things. Much of this latest slump can be put down to a climate of fear. Let's hope for a new trigger to lift sentiment again. It will come. It is just hard to see when.
* Liam Dann is the Herald's business editor.
