Remember those halcyon days around this time a year ago when Federal Reserve chairman Ben Bernanke and Treasury Secretary Hank Paulson were telling us that the subprime meltdown was "contained"? Today, the International Monetary Fund conceded that there is now a 1-in-4 chance of a global recession occurring in the next 12 months. (Although their best bet is that global economic growth merely declines to 3.7 percent in 2008, down from 4.9 percent in 2007.)

But on Page 23 of the IMF's newly released 303-page World Economic Outlook you can read the following reassuring words:

The financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression, inflicting heavy damage on markets and institutions at the core of the financial system. The turmoil was initiated by rapidly rising defaults on subprime mortgages in the context of a major U.S. housing correction (and the consequent blowout in spreads on securities backed by such mortgages, including on collateralized debt obligations structured to attract high credit ratings.) However, the fallout rapidly spread through an excessively leveraged financial system to curtail liquidity in the interbank market, to weaken capital adequacy and force the emergency resolution of major financial intermediaries, to deeply disrupt structured credit markets, and to prompt a repricing of risk across a broad range of instruments...

Italics mine, mine, mine. I will also note that the phrase "since the Great Depression" appeared at least twice in Kevin Phillips' new book, "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism," which I read today and will be reviewing for Salon next week, and which reads almost as if someone had taken the last 18 months of HTWW posts, mixed them with a KitchenAid, and then baked a tasty cake.