Recession - Is the world is falling apart ?

I was just going through my past post almost 2.5 years ago about Indian Stock Market ->
http://nitinjain.blogspot.com/2006_05_01_archive.html
As on date Indian indices and even global indices are at pretty much the same level as they were around that time ( May 2006). At that time almost every asset class was rising including salaries, inflation, GDP growth rate etc AND NOW everything is falling !! It all started in 2nd week of Jan 2008 when global indicies started falling and were never able to achieve those levels. It has almost been a year now and still global leaders, politicians, analysts are debating - Are we in recession ? US fed is taking several measures including spending huge tax payer( not only of US but global tax payers, oil buyers etc) money for saving age old US corporations from overnight collapse !! A Socialist effort to save the capitalist !! What an irony....

Back home our fin min/ RBI to is doing its bit to infuse liquidity in the system by reducing interest rates, forcing PSU banks to lower home loan rates, provding tax SOPs to exporters and what not without caring about the fiscal deficit...

Somehow I tend to disbelive that the Market is always right ! I havent seen that in recent past... Most of the time market was moving in one direction irrationally ( be it crude, gold, BRIC stock markets, steel, cement etc) without any kind of consolidation...why cant world leaders, world media, market analyst simply accept the fact that yes we are in recession....and it will take some time to recover....and take some transparent, bold steps to improve the situation in long term rather than worrying about immediate elections, next quarter results, montly IIP numbers or weekly jobless claims !!