Friday, 8.45am local time, as the global financial turmoil continued, a "breaking news" message circulated around the screens in the world's panicking stock exchanges and brokerages. Forwarded from one overheated broker to another, it concerned an alleged statement from the Bank of Jamaica. The message read, in full: "BN -- Central Bank of Jamaica says everyone should just chill out."

Over the past week, we've heard worse advice. Some of what has been going on in the stock markets is simple panic. The politicians press the usual buttons and nothing happens. The problem isn't that we're being overwhelmed by a financial crisis. It's now clear there are at least half a dozen crises, separate and linked. Any one or two would be manageable, even three or four. But things are looking bad.

We have to be slightly crude now. The best description of the core of the problem comes from an American commentator who coined a term now regarded as entirely appropriate -- "Big Shitpile". Being crude, the term doesn't get much play in the newspapers.

It refers to the enormous stinking pile of you-know-what that has built up within the global banking system, constipating everything. It began with subprime mortgages -- loans given at premium rates to people who couldn't afford them. People were offered "teaser" rates, low repayments that later ratcheted up way beyond their means.

Weren't these people irresponsible? Well, I dunno. Recently, a woman named Addie Polk, in Akron, Ohio, shot herself after being repeatedly threatened with foreclosure. Aged 90, she survived the shooting. Turns out that four years ago some smart bastard talked her into taking out a 30-year mortgage.

The banks who sold the bad loans then repackaged them, along with good debts, as "collateralised debt obligations", which were then vouched for by credit agencies and sold on the stock market. And bought by the smart folk at such outfits as Lehman Brothers.

It's now estimated that the Big Shitpile of bad debt amounts to something like $1.4 trillion. And, because the financial markets are global, the you-know-what has spread through banks around the world.

We hear much babble about "confidence" and "trust", about how the problem is all psychological. No it's not -- that's a very real $1.4 trillion heap of crap, the debris of years of greed, debt, bad politics, crooked economics and false accounting.

Big Shitpile is the core problem. The housing bubble (and the bursting thereof) is a separate but linked problem. And the economic downturn is a separate problem.

Then there's a banking liquidity problem. Banks are afraid to loan money to other banks, for normal commercial purposes -- because no one knows who bought which repackaged chunks of Big Shitpile, and which bank might go under tomorrow.

So credit freezes, just as the boom cycle moves to downturn, one problem compounding another, turning downturn to recession. Lending tightens, businesses can't borrow, so they retract, this affects other businesses. Unemployment grows. Depression beckons.

Next problem -- it's becoming clear that many banks are under-capitalised. Lots of loans on their books, assets in name only, the reality being bare cupboards. And perhaps we better not mention the credit card bubble.

In this country we have the added problem of banks that greedily loaned too much money to builders to construct wildly overpriced properties -- around €110bn, and perhaps €20bn of that ain't coming back.

So -- there's the global credit freeze, banking illiquidity, under-capitalisation, economic downturn, a bursting property bubble, a credit card bubble, the home-grown bad-loans-to-builders problem. And, at the core of much of this -- Big Shitpile. Anything else? Well, there's the problem that we simply can't trust many of the usual experts -- they're compromised by the years they spent pimping loans for the banking business. And we can't trust the bankers. When they say they're solvent, that they're not under-capitalised, they might be telling the truth. But many banks have a history of lying. And we can't trust the over-relaxed regulators, who stood by while the problem grew.

For 25 years, we've lived under the Reagan/Thatcher version of undiluted free market capitalism. It's not just politics, it's a culture and a philosophy -- brash, arrogant, intolerant of weakness, often cruel.

Since January 2007, when Big Shitpile emerged, the response has been small-minded, mean and politically correct.

Mired in the swamp of free market orthodoxy, the politicians hauled down all the old off-the-shelf solutions. Deregulate even further! Reduce interest rates! Cut public spending! Cut taxes! One reason the EU response has been so weak is that people like our own home-grown Tory Boy, Charlie McCreevy, have been appointed to a commission to find a solution.

Typically, McCreevy follows US conservatives in arguing for the removal of a rule known as "fair accounting", or "mark to market", in order to further liberate bankers. It's a delusional response. If in doubt, deregulate. One EU politician remarked that appointing McCreevy to find a solution is to put an arsonist in charge of the fire brigade.

George Bush's perpetually frightened-looking Treasury Secretary, Hank Paulson, sought $700bn to prop up the banks. That worked for about 10 minutes, then the panic continued.

To ease his political burden, Gordon Brown decided to take equity in the British banks, in return for recapitalising them. Frightened Hank Paulson followed suit. Paulson didn't originally want such powers (denounced by rightwingers as "socialist") but a clause allowing him to buy equity had been inserted against his will in the legislation (by Democrats Chris Dodd and Barney Frank).

Paulson is so desperate that he now gratefully uses the power.

Here, Brian Lenihan was praised for his "courageous, decisive" leadership. Why? Two weeks ago, as panic rose, Brian asked the banks what they wanted and they told him. Then, he courageously, decisively obeyed, under instruction from Brian Cowen, who hadn't a clue what else to do.

That worked for about five minutes, during which time Mr Lenihan swaggered around, his media cheerleaders gleefully pointing out that the Germans were following his lead (they weren't).

The G7 meeting on Friday produced a risibly weak "Five-point plan". Bankrupt of ideas, the politicians treat the symptoms and pretend not to notice the stink from the immovable $1.4 trillion Big Shitpile at the centre of it all -- the consequence of a quarter century of policy based on greed.

Inevitably, they're hamstrung by the instinctive attempts to get everything back to the way it was, with cheap credit and an ever-expanding economy. Ain't going to happen.

The alleged statement from the Central Bank of Jamaica was a much-needed joke in a grim week. The period we're living through will be interesting to read about in 50 years.

Today, it's somewhat interesting but mostly frightening.

Pensions are diluted, wages held down, jobs under threat, necessary services being cut, creating even more expensive problems in the future.

The banks, millionaire speculators, builders, estate agents and economists who created the problem are trying to fix it without conceding an inch of ground. They have the ear of the politicians. Ditto the regulators who tolerated the various bubbles.

Their solutions will be soft on themselves and very, very hard on the rest of us.

Internationally, with state money buying up "toxic debt", the net effect is that taxpayers are expected to open wide and swallow Big Shitpile. Here at home -- well, here's an example.

For years, the Irish State illegally took money from elderly people in nursing homes. Caught, the state passed a law to legalise the practice. Last week, with no sense of shame or irony, the Government christened the solution "Fair Play".

The same mindset will fashion and cloak next week's bankers and builders Budget.

- Gene Kerrigan