The credit crisis is continuing to descend into a prolonged depression. Ireland now faces a crisis that is so severe that it is now facing the real possibility that it cannot finance its own debts without major assistance from the rest of the European Union.
Meanwhile in the UK, the nearly 40% devaluation of Sterling may cushion some of the blow, but the implosion of such a huge part of the financial sector in an economy dominated by financial services has clearly been a body blow to the future prosperity of Britain.
In the face of the escalating collapse, the previous slogans of Gordon Brown: "An end to boom and bust", "prudence with a purpose" and so on are now revealed as empty air. Despite the initial burst of activity, the current government response has also been revealed as equally threadbare. Despite every attempt, the Labour government is still sinking deep into the mire.
The return of Peter Mandelson with his trailing miasma of sleezy and unprincipled politics has only served to underline the scale of the crisis, both personal and political that is engulfing the British Prime Minister. As rumours grow of his failing eye-sight the atmosphere around number 10 Downing Street increasingly resembles that of the court of King Lear.
Internationally it has become the conventional wisdom that the "British model" has failed, and even our allies have ceased to be polite to a government that they increasingly regard as finished.
The news for the Labour Party is now extremely bleak. While they continue to retain strong footholds in Scotland and Wales, in many parts of England the greater part of their support in some areas has disappeared completely. The latest run of opinion polls suggest that Labour are facing extinction in the South and risk losing a great belt of seats across the marginal Midlands and in even the north.
Yet these same polls do not show enthusiasm for the Conservatives- although they are managing to keep their poll ratings above the critical 40% mark, deeper analysis of the polling numbers still make for dismaying reading for Conservative strategists: the Conservative support remains soft, and the electorate still seems to doubt Tory skills in the vital area of economic competence.
The Labour party could now be facing the moment of truth. It seems quite possible that a significant chunk of Labour support is leaking over, not just to the Conservatives but also to the Liberal Democrats. The recovery of the Liberal Democrats to levels of around 22% could be potentially devastating for Labour. Were the Lib Dems to start an election campaign at that sort of level, then if they match their traditional increase over the campaign, then they could, not only out poll their previous percentages, but also catch Labour in a fatal pincer that would remove them from power and potentially destroy them as a governing force.