One economist, last week, summed it up this way: "The financial system is more fragile now than most of us have ever seen it."
You know the story. Asia in depression. Japan in recession. Russia melting. A bucket of cold water tossed on a sizzling Wall Street. To quote our favorite witch: "What a world, what a world."
We're definitely not in Oz anymore, Toto. The giddy days are gone. Last July, anyone predicting the Dow Jones would finish 1998 at 8000 would have been branded a pessimist. Now such a forecast bears a tone between hype and hopeful.
Investors accustomed to double-digit gains got a double-digit whammy last quarter. The mutual fund numbers, from Lipper Analytical Services, read like the thermometer in a Siberian winter:
* Stock funds: -15.02%
* Growth funds: -13.44%
* Small cap funds: -21.52%
* Financial services: -19.07%
* Technology: -10.88%
* European funds: -17.27%
And the numbers would have looked worse if the quarter had finished a day later, catching the 210-point Dow downdraft on Oct. 1.
Fortunately, no one seems to be wearing emerald glasses, a distinct and important difference between now and the end of that other great bull market, the one that finished so unpleasantly in 1929.
Alan Greenspan, last month, virtually announced that the Federal Reserve would lower interest rates a week before the event happened.
Mr. Greenspan rarely telegraphs his moves and has never jawboned the stock market higher.
And a world leader has finally stepped up with some world leadership to help navigate the eggshells.
President Clinton last week launched an effort to rally the still-solvent nations of the world around an emergency fund to refloat some of the globe's sinking economies.
Whether his plan itself floats remains to be seen, but everyone seems aware that drastic action is needed - everyone except the Japanese government, dragging its heels on economic reform, and House Republicans, determined to keep the nation focused on Clinton's troubles.
The key problem is in the term noted at the top of this column - "financial system."
We may have left Oz, but we're also not in Kansas, anymore. Economies are no longer just local, they belong to a global financial system.
The term tossed around increasingly is "the architecture of the global financial structure."
And unfortunately we don't know what all the subcontractors are up to in this grand architectural scheme.
How many of us thought Greenwich, Conn., sat at the center of this global financial system? We found out last week that one of its corporate citizens, hedge-fund Long Term Capital Management, almost took out one of the cornerstones.
Greenspan, a man not given to hyperbole, said last week that there could be "hundreds" more such problems tucked away in the architectural underpinnings.
The remaining props under this architecture rest on Brazil and Japan. If Brazil, well along the path to economic reform, can withstand the spreading currency crisis, the rest of Latin America should stand solid.
And if Japan can at least begin the first step along the 1,000-mile journey to reform, as it seemed ready to do last week, economists say Asia will likely back away from the next precipice.
For mutual-fund investors, Jon Decker's article (Page B3) on bonds is important reading. And glance through the Hillary Chura stories, even the one on the "S" word (Page B4).
This is not a time to panic, but neither is it a time to be complacent.