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Gone is the era of great moderation. The worldwide unprecedented rapid expansion in output with low inflation of the last seven years is history. The party is over and 2009 promises to be a gloomy year. The rapid worsening of the financial crisis following the collapse of Lehman Brothers in September has accelerated the global slowdown. International institutions like the IMF, the OECD or the European Commission can no longer keep up with the onslaught of negative news and keep revising their official forecasts downward. Rating agencies woke up to the underlying risks and are busy downgrading the vulnerable countries. The slowdown affects everyone, the developed world, BRICs, oil producing countries, developing countries. No one seems able to avoid the slowdown, not even countries that in the past followed prudent policies with fiscal and current account surpluses, as they would be hard pressed to find willing buyers for their exports.