Bank worries bring echoes of 2008
Just five days ago, international investors were considering the possibility that the US government might default on its debt. That fear, always distant, has now gone away. But it has been replaced by a lurking fear that world could be heading into another credit crunch.
We debated all this on the Today programme this morning, with former Italian Prime Minister Romano Prodi and the EU commissioner for monetary affairs, Olli Rehn.
Yesterday's fall in the US wiped out all of the stock price gains that American investors have enjoyed this year - that's $700bn in savings and investments in US equities, wiped out in a single day.
Asian markets have now lost most of their rise in 2011 as well - and European markets this morning are already down more than 3%.
Fears about the US recovery are a key part of the story - but it's the risks to European banks from the eurozone crisis that are causing most concern, and the comparisons with the summer and early autumn of 2008.
Robert Peston's latest post reminds us how that crisis started.
Policymakers have a better understanding now than they did then, of how easily funding problems for one country's banks can turn global. That ought to make it easier to prevent a repeat.
Most big banks are also now in a much better position to deal with a crisis than they were in 2007 or 2008. But governments - especially European ones - will have a battle to convince investors that the same applies to them.
Evan Davis asked Romano Prodi this morning whether Italy's problems were real - or a matter of confidence. The nub, of course, is that the euro is facing a crisis of both.
The immediate problem is that markets lack confidence that the European Central Bank (ECB) or any other European institution will provide the ultimate backstop for the eurosystem. If they had that confidence, such a backstop would not be needed and the crisis would not have happened.
But - as I described in my last post - the lack of market confidence has a real cause.
In reality, neither the ECB nor anyone else can credibly take responsibility for the single currency in the markets, or at least not yet. Because the 17 governments that decided to adopt the euro will not - and maybe cannot - promise that their taxpayers are willing to pay the consequences.