Brad DeLong brings good news:

As long as imbalances of world trade and capital flows unwind slowly and smoothly, the magnitude of any global economic distress should be relatively small… The prospect of a truly hard landing — one where global investors wake up one morning, suddenly realize the US current accounts cannot be sustained, dump dollars and crash the global economy — is becoming less likely with each passing day.

And warnings:

Under two scenarios — both concerning China — the unwinding of global imbalances could cause regional if not global depression… Today, the principal source of international economic disorder is made in China, owing to factions inside its government that hope to avoid a more rapid appreciation of the yuan’s value.

Via Thoma.