The amount of ink that the Financial Times is devoting to the US economic woes should be enough to make not only Ben Bernanke stay awake at night, but everyone else on the planet too, who doesn't want to be part of the meltdown.

This article by Martin Wolf argues what may well happen, and why it is ultimately unlikely. Very sane, very balanced, and very scary. Scary because at the end of the day, regardless of which scenario takes place, there is going to be a lot of pain along the road...

Here is a snippet from the article:

In all, argues Prof Roubini: “Total losses in the financial system will add up to more than $1,000bn and the economic recession will become deeper more protracted and severe.” This, he suggests, is the “nightmare scenario” keeping Ben Bernanke and colleagues at the US Federal Reserve awake. It explains why, having failed to appreciate the dangers for so long, the Fed has lowered rates by 200 basis points this year. This is insurance against a financial meltdown.