The heavy sharemarket falls in the past 24 hours have pushed the markets back down to levels last seen in September last year.

But since September, the earnings outlook for companies around the world has generally improved: this market correction is, in other words, one driven largely by a deterioration in sentiment, not a change in fundamentals.

The sovereign debt concerns that triggered it were predictable from the moment the world’s governments opened their cheque books and began writing blank cheques to save the global financial system.

The big question, not answerable at this time, is whether the renewed fears about debt - debt on government balance sheets this time, rather than debt held by private sector banks and the companies they lend to - are justified.

The markets have always expected the climb out of the global financial crisis to be gradual, and for company earnings to follow the recovery, rather than lead it.