What Happened to Financial Armageddon?

Amidst the somewhat decent economic headlines (excluding unemployment) and a number of relatively robust earnings reports (because it's much easier to make a bunch of money when you fire all those people,) we seem to have forgotten about the economic crisis of two years ago. Certainly the market has bounced back to a level much more tolerable to most investor's stomachs. Sure, Obama is going to "Castigate Wall Street" today and our legislators are going to pass some watered down version of a financial reform bill. Even the SEC is going after Goldman in an extremely complicated case involving CDOs, after failing to go after two obvious monstrous ponzi schemes that they were repeatedly warned about. But really, what happened to the financial armageddon that everyone was talking about? I'm talking about gold-hoarding-living-in-caves style financial armageddon. Has it really been averted?

A few worthy souls are still carrying the armageddon torch. For instance, Marc Faber thinks that our governments will bankrupt and expropriate us and that the whole system will collapse. He believes the crisis has merely been postponed by all the government intervention. Who does this Marc Faber guy think he is? He's the editor of the Gloom, Boom & Doom Report and he's just a savvy investor, that has been shockingly right about alot of stuff. Then there is Louis Bacon, head of Moore Capital that is joining George Soros in his expectation of a breakdown of the European Monetary Union. Also, the FT's chief economics commentator, Martin Wolf, in yesterday's paper discussed the "Challenge of halting the financial doomsday machine," which was accompanied by some fairly sobering graphs showing the explosion in financial sector assets in the UK and US, as well as displaying how much the fate of the financial industry was now concentrated in a few hands.

So which is it? Global economic V-shaped recovery? Or government reinflation by money printing leading to a much bigger bubble which is bound to burst later? I'm currently reading "Lords of Finance", the pulitzer prize winning account of the central bankers whose actions supposedly caused the Great Depression. It should offer some insight into our current situation. The problem is, I keep falling asleep, can't make it past page 237 and not much has happened yet. The good news is that Mr. Bernanke is a student of the Great Depression, and he's supposedly put us on a course to avoid it. The bad news is that his, as well as the other central bankers' actions around the world are unprecedented, and we still have no idea how this story is going to end.