Cross-posted at River Twice Research.

So the United States lost to Brazil in the final of the FIFA Confederations cup, in that thrilling but painful tale of two halves, with the U.S. up 2-0 only to see Brazil roar back (or rather dance and prance and glide with balletic ferocity) and win 3-2. All I can say is, thank god.

For the past sixty years, the powerhouses of international soccer (a.k.a. football) either have been empires past their prime and on the decline or countries that dream fruitlessly of empire - England, France, Italy, Germany, Argentina, Brazil, and Spain. To bestride the world as a soccer power is to not bestride it as an economic or military power. In its period of global hegemony, the United States was manifestly not a global powerhouse in soccer. It was mighty in everything but the sport that is played by more people in every corner of the world than any other. And so if the United States had magically defied the odds and the gods and beaten Brazil, it would have been the final sign that American is indeed in decline.

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Cross-posted at River Twice Research.

President Obama's speech in Cairo last week as well as the candid and heated debates in Iran during its contentious presidential election provide yet another opportunity to revisit the sterile images of Islam that dominate the discussion both in the West and throughout the Muslim world as well. That discussion is framed by Muslim terrorists or extremists on the one hand squaring off against secular but resentful populations on the other. That is one facet of a kaleidoscope, a potent one but in no way the only one.

If there's any doubt on that score, a new documentary focusing on the career of Senegalese singer Youssou N'Dour should dispel it utterly. "I Bring What I Love" is an elegiac, beautiful film, years in the making, and it will start playing in New York this week and then in Los Angeles and elsewhere. Like all documentaries, it will be dwarfed by the summer blockbusters that surround it, but this film deserves an audience.

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Each month, the Federal Reserve releases its latest minutes of its last meeting along with its projections of economic activity (www.federalreserve.gov). The minutes just released indicate that its prior forecasts have been tweaked a bit, with update projections for unemployment over the next two years, GDP growth, and inflation. As new data become available, the hundreds of economists at the Fed revise and recalculate numbers, which means that any forecast rarely lasts more than a few months.

And yet, the Fed's forecasts - along with the World Bank, the International Monetary Fund, the Office of Management and Budget, the Congressional Budget Office and various others - are used to frame every single meaningful discussion about the economy. They become the fodder for media reports, for budgetary decisions made by companies, and for individuals who digest the sound-bites - "Fed predicts unemployment will level off at 9% next year" - that shapes their sentiment. Investors also turn to these signposts as markers to navigate a complex world.

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Everyday, my mailbox gets inundated with reports from strategists and economists. Two years ago, most were predicting a fairly rosy scenario for the global economy - and to be fair, so was I. Today, most are predicting a dire future of negative growth and economies mired in a deep and intractable recession. The predictions of the past were mostly wrong; there is little reason to believe that today's forecasts will be much better.

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The incoming Obama administration will face formidable challenges, but global economic collapse is no longer imminent. That may be small short-term comfort to the markets and Main Street. But having stared down the abyss, governments around the world appear determined to address root issues. The G-20 gathering of the world's major powers in Washington on Nov. 15 was only the beginning of a long and constructive process of revising the global system.

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So here we are once again on the precipice, at least in terms of global stock markets and credit markets. Another bout of nail-biting panic is hardly unexpected, though it's always surprising when otherwise sane people veer sharply into hysteria. It's a good, albeit painful, reminder that the bonds of what we call civilization are always more tenuous than we would like to believe, that things like "value" and "worth" and "the economy" are ultimately the products of human beings simply agreeing on a set of rules. Stocks, bonds, gold, silver, none have any intrinsic value, nor do Gucci handbags, Deere lawnmowers, and GM trucks (in case anyone was wondering about that one). We act as if they do, because it gives us some sense of an orderly world, and because the alternative is just too unsettling to live with on a daily basis.

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Cross-posted at River Twice Research. Please note that this article first appeared in the October 18, 2008 edition of Newsweek.

You've heard the story. On the heels of tumbling shares and dire warnings from the U.S. president, as well as business and government officials across the globe, the British prime minister says, "The world economy is facing its greatest risk in decades." To halt the slide, he calls for a global response to prevent the crisis from spiraling out of control.

Sounds familiar, yes? Yet the prime minister described above is not Gordon Brown, the current occupant of 10 Downing Street, but rather Tony Blair in 1998, responding to the Asian crisis that had been accelerating since the collapse of the Thai currency many months before. There were many financial crises in the 20th century, several of which triggered panic that the system was on the brink of collapse: the oil shocks of the 1970s, the stock-market crash of 1987 and the collapse of the Mexican peso in 1994 all come to mind. But the Asian crisis was particularly acute. Throughout the fall of 1997 and into the spring of 1998, the Clinton administration held numerous meetings with various heads of state throughout Asia and Europe to work on a coordinated response. Eventually, the pieces came together, and the spiral was halted, but not quickly and not without considerable inertia.

Contrast that with what took place last week: over the course of one weekend, finance ministers of the G7, a club of the world's largest economies, sized up the extent of the financial crisis. They recognized that the credit system had simply ceased to function. Led in part by U.S. Treasury Secretary Henry Paulson, and also by European leaders including Gordon Brown of the U.K. and Nicolas Sarkozy of France, as well as IMF head Dominique Strauss-Kahn, they worked throughout the weekend to make a series of rolling announcements on Monday, Oct. 13. First, more than $3 trillion of funds would be committed to shore up banks and jump-start a frozen system. In addition, trillions of dollars of deposits would be guaranteed by governments around the world. China's central bank maintained its commitment to purchase U.S. Treasuries, a controversial issue for the presidential election, but an imperative part of a functioning global financial system. All this followed a global, coordinated rate cut by more than a dozen central banks.

For a look at the rest of this article as well as additional blogs and other writings of mine, feel free to visit River Twice Research.

Soon enough, America's financial crisis will wind down -- maybe in a month, maybe in a year. Yet regardless of when, this crisis marks the beginning of a new era for the U.S. For more than six decades, from the end of World War II in 1945 until now, the U.S. was the hub of global capital and capitalism. In the years to come, it will remain a vital center, but not the center.

In 1945, after an exhausting three decades of exertion against Germany, the United Kingdom emerged militarily victorious only to see itself economically exhausted. A year later, it was bankrupt, unable to find capital and on the verge of collapse. It had nowhere to turn but the U.S., which then dictated terms that amounted to a withdrawal of Great Britain from the world stage. The U.S. is not yet in the position of Great Britain, and our creditors in China are not yet as we were then. But absent a more humble and realistic attitude toward capital in Washington, that is the path we're headed down.