WHEN a canary stops singing, it is worth a sidelong glance. When whole flocks of birds keel over, it is time to be alarmed. The warning signs in the financial markets and the global economy are mounting. The early omens could perhaps be dismissed; falling commodity prices were a response to increased supply in oil or the equivalent of a tax cut for western consumers. Subdued inflation was just a consequence of lower commodity prices. Sluggish trade growth could be explained by a change in China's manufacturing strategy; building more goods from scratch rather than assembling components made from abroad. Falling Chinese share prices in August were simply the bursting of an earlier bubble. But it is nearly the end of September and more bad news seems to be announced every day. Chinese industrial profits dropped 8.8% year-on-year in August. Cheap Chinese steel was blamed for the closure of a steel plant in the north-east of England. Falling commodity prices are causing headaches for miners such as Glencore; S&P's global mining index is down 64% since April 2011. Plunging mining shares are dragging down equity indices. Other sectors have been dragged into the slump; the US biotech sector, one of the hottest sectors of early 2015, has lost all its gains for the year. Analysts are downgrading their forecasts for US operating profits for the first time since 2009, according to SocGen; in the past, such downgrades have been associated with recessions.

In another bad sign, corporate bond spreads (the excess rate paid by companies to reflect the risk of default) have been rising again. Spreads are not back up to their levels of 2012, let alone 2008, but the direction is worrying. The problems are unsurprisingly concentrated in the mining and energy sectors; the distress ratio (the proportion of bonds with a spread of 10 percentage points over Treasuries) for US high-yield bonds has risen to 15.7%, the highest level in four years. Defaults haven't risen significantly yet, but they seem likely to. A Japanese shipping group, Daiichi Chuo, has filed for bankruptcy today; its revenues have been hit by falling Chinese demand for raw materials.

Perhaps the global economy will recover; China may not be as weak as the bears fear and America had a great second quarter. But another sign of market distress is that inflation expectations five years out (from 2020 to 2025) have taken a recent hit. The markets are not expecting a return to normal even under the second term of the next American president. In India, the one BRIC that seemed to be escaping the downturn, the central bank has cut interest rates by half a percentage point, lowered its growth forecast and proclaimed that

more domestic demand is needed to substitute for weakening global demand

It all seems to be a very odd time for the Fed to be thinking of pushing up rates.