The price of oil has declined a little, a threatened banking crisis has not developed, the US Federal Reserve is keeping cool, and the Dow Jones has rallied.

Could it be that we have dodged the bullet on the recession?

No.

Structural problems in the world economy remain, combined with the cyclical need to revalue some overpriced assets.

The good news is that many of these problems will probably work themselves out over the next few months – so long as governments do not panic.

The bad news is that governments are showing every sign of panicking. The collapse of the world trade talks, and the worryingly protectionist tone in the US Presidential and Congressional elections, together represent a greater threat to world business than the “credit crunch”.

This is but the eye of the hurricane – the patch of fair weather in the middle of the whirlwind.

Entrepreneurs should not rush out of their storm shelters. Heads down. The worst is yet to come.