Today’s globalised economy is like a game of consequences – something done in one country has consequences in another, and ditto where different economic sectors are concerned. Failure to see this is why the seriousness of the current economic downturn is being dangerously underestimated.

At each stage of the game in 2018, a widespread view was that the gathering economic downturn would be of limited severity and duration.

Trade wars were containable, there was little fear of currency wars; debt could be managed and slowing corporate earnings would not affect stock prices.

This kind of myopia comes sometimes from plain inexperience or tunnel vision on the part of financial analysts (or their anxiety to preserve their bonuses). But all too often it reflects a failure to see trade, production, sales, profits, investment and confidence as part of a whole.

It was only the slump on Wall Street at the end of 2018 that woke people up to the fact that a crisis might be at hand. For a while, the mood turned from relative indifference to near panic. But views that “the bear market ended on Christmas Eve” and that all was well after all regained ground.

That was nonsense. The 20 per cent drop in share prices which the S&P 500 was registering by then from a September peak could easily reach 40 per cent before bottoming. The question is not how far the index has fallen but what reason there is for it or any other stock index to rise again in current circumstances.

When Donald Trump declared his trade wars there was a general failure to realise how complex the game of consequences in trade has become. It was not just countries or big international trading firms that were being put at risk but myriad smaller firms that feed global supply chains.

It does not require a gargantuan intellect to see that trade wars (however “easy to win” Mr Trump believes them to be) cannot simply be switched on and off. Just as it took months for the impact of the US-China dispute to show through, so any resolution would be slow to offer relief.

It does not require much thought either to grasp that corporate earnings are suffering delayed reaction to the trade slowdown. According to the IMF, “global trade growth has slowed to well below 2017 averages and [data] for new orders point to less buoyant expectations of future activity.”

From there, it does not take a great leap of the imagination to see that the relief rally on Wall Street at Federal Reserve chair Jerome Powell’s pledge to go easy on interest rate hikes for now cannot last. And it is not just the end of US fiscal stimulus that will put stocks back into reverse.

How many analysts have noted that it was a pick up in global trade toward the end of 2016 that set in motion recovery in a global economy that had stayed more or less on the floor since the 2008 global financial crisis? Shortly thereafter, however, Trump trade wars put paid to that recovery.

Trade was the growth engine from 2017 onwards and, now that it has stalled, what other engine is there to take over from trade? Capital investment? No, it is falling. personal consumption? And buoyant US consumption seems unlikely to survive the government shutdown in the US, while it is also declining in China and elsewhere.

Productivity gains? Not when the US is trying to force China back into a pre-industrial state. Turning monetary spigots back on? Don’t even think about it unless in a dire situation where financial collapse threatens. Fiscal stimulus? Just possibly in China – but China can’t save the world again.

It is difficult to see what can prevent the global economy from going “ex-growth” again, at least in the short to medium term. We’re not there yet but the IMF in its latest World Economic Outlook has continued to revise down growth forecasts for both advanced and developing economies.

Meanwhile, what about that other “ghost at the feast” – global debt, which has managed to remain almost invisible (as ghosts will, until they pop up and scare everyone to death)? Again the IMF has taken to issuing ghost warnings again, and the G20 under Japan’s chairmanship intends to highlight the problem this year.

Yes, the Fed’s Mr Powell has bowed to political expediency and slackened off raising interest rates. But the threat now comes from the other end” – i.e. from declining earnings and tax revenues, and that is going to be painful not only for over-indebted corporates but also for governments that are deeply in debt.

It will be astonishing if stock markets survive all this without skidding back below where they fell last Christmas. This will hurt “Davos Man,” who is now rich beyond the dreams of avarice and owns the vast majority of global stocks. But it will also hit the rest of us too. The bear market “ain’t over until it’s over” – and that likely isn’t yet.

Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs

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