Just how messy is this all going to get?

If you are anything like me, you scour the headlines for hints that we might be on the way out of this mess.

I study the sharemarket trying to work out if it is a dead cat bounce or is the cat even dead? I study bank reports, economists research, employment figures – anything that might give a hint about when the economy might start to recover.  

Unfortunately indicators show that we are smack bang in the maelstrom – and worse, we don’t know how long it is going to last.

That is such an uncomfortable place to be for an entrepreneur. How the hell do you do forward planning in the middle of this chaos?

One certainty is that things are going to get worse. Treasurer Wayne Swan is not telling anyone anything they don’t already know when he says it will be “virtually impossible” for the Australian economy to avoid contracting further.

The one bright spot is the growing consensus among the US and trading partners, that the toxic assets in the financial system must be dealt with urgently. The US banks are estimated to be holding $2 trillion in troubled assets, mainly home mortgages.

The US Government is conducting stress tests on the banks to determine their level of stability while working out a plan to provide hundreds of billions of dollars worth of cheap loans to private investors to get credit moving again and stabiles the banking system.

The idea is to lend money to investors who want to buy the toxic assets that the banks want to sell. Another part of the plan is to sign up investment managers to public-private partnerships and provide dollar for dollar funding for asset purchases.

Another good sign is the growing pressure from European Union leaders to put in place a regulatory framework to deal with the international financial system.

Prime Minister Kevin Rudd is off to a series of meetings with the US, British and European leaders, which will include meeting with the G20 to develop a co-ordinated response to the financial crisis.

The next month could be crucial to restoring a reasonable degree of financial stability, which could get the global credit markets ticking again. Now that would be a positive indicator that could get us all hoping.