In yesterday’s Times, controversial columnist Anatole Kaletsky heralded the beginning of financial stabilization. Last week saw sharp rises in stock markets across the world, and for people like Mr Kaletsky, who seem to think the policy errors of Henry Paulson lie behind the economic crisis we are in today, it is simple to see why optimism returned. The new economic team heralded by Barack Obama, means at last the US is set to make the right decisions.

And so that’s it then. The economic crisis that began with the collapse of Lehman Brothers is nearly over now. All it ever needed was sensible economic decisions made by people who knew what they were doing.

The Times man is not alone. Many economic forecasters say Hank’s decision to let Lehman Brothers go under marked the point when the financial scare moved from being a nasty, but not unique, banking crisis to the panic we are seeing now. That is why many economic forecasters didn’t predict the depths of this slowdown – how were they to know Hank would act in such an inappropriate way.

And yet, if those arguments are true, yesterday’s developments seem hard to explain.

Actually, there were four major developments yesterday. The first two will be dealt with here. For the third and fourth see the next two articles below.

The big argument made by those who blame Hank for this crisis, and say the whole thing could have been avoided if Lehman had been saved, was completely blown out of the water yesterday.

First, this is the news from the markets. Last week saw a health crisis across the world. The Dow was up nigh on 800 points last week, and by a staggering 1,123 points from 20 November, that marked a 15 per cent rise. But the experience was similar, although not quite so extreme, across all the world’s leading indices, with the FTSE 100, the DAX, Hang Seng and Nikkei all enjoying strong rallies.

Oil and gold soared too, and with the crisis, some dared to hope the worst was at last over.

Stateside, critics of Hank Paulson got their wish. Citigroup was saved by the Fed; the President Elect hinted the Detroit Three, GM, Ford and Chrysler, would not be allowed to go bust; Mr Obama also talked the talk of big US spending plans to save the economy; and there were hints from the Fed chairman Ben Bernanke that interest rates had further to fall.

So, what a relief.

But further relief came in the form of news on the makeup up of Obama’s economic team.

The new US Treasury Secretary will be Timothy Geithner, who served as understudy to Larry Summers in the Clinton regime. Summers himself will be the new chairman of the National Economic Council and Paul Volcker, the Fed chairman before Greenspan, and who defeated inflation when Reagan was President, will head a new financial stability forum.

So, with three wise men like that at the helm, how can things go wrong? All is well again.

But you see, there are a few flaws with the logic.

For one thing, as was pointed out by John Authers in his excellent Short View video diary on the FT site, the Dow had been trading beneath its 100 day moving average ever since Lehman went under. Even after last week’s crisis it was still below the moving average, and therefore the sharp rises seen last week could easily have been explained away by normal market volatility that you get in a bear market.

But the true fatal flaw in the bulls’ logic comes in the form of a report from the much respected National Bureau of Economic Research (NBER). Recession has more than one definition. Some define a recession as two quarters of negative growth – others say it is determined by a number of factors, including changes in jobs and our expenditure.

There is a third definition: others say it is a recession if the NBER says it is.

And the NBER takes into account industrial production, personal income and wholesale and retail sales.

On the CNN site this morning it says: “Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining.” We are not sure where they got this statement from, but it is a tad arrogant – it is not an error to say two quarters of negative growth make for recession, it is just a slight divergence in opinion.

But the point is this. The NBER says the US has been in recession since December 2007.

So, all of a sudden, all those reports published earlier this year that predicted a slowdown in growth, but dismissed the prospects of recession, now look decidedly iffy.

The argument that the collapse of Lehman caused recession, when NBER said the recession kicked off nine months earlier, suddenly seem daft.

The truth is, the economic crisis we are now seeing was not caused by silly bankers, or errors from an ex-banker turned US Treasury Secretary named Henry Paulson.

The causes of this crisis are more subtle and complex than that, and have their roots in the insane belief that house prices always go up, the emergence of a debt bubble and the way the global economy went out of balance with some countries saving too much and others not enough.

In the US and UK, consumer demand was too high, and this created an unsustainable boom in these two countries. On a global basis, consumer demand was too low – this may well have been caused by global productive capacity rising faster than global demand.

The solutions to this crisis do not lie solely with the odd bail out here and there, and a quick step up in government spending – until the global imbalances can be fixed, the crisis will not come to an end.