The worst week for stock markets since the crash of 1987. Or since the 1970s slump? Or even before then, since the 1930s? It has certainly been awful. Some $6,200bn was wiped off the value of the world’s stock markets last week as a Category 5 Credit Cyclone smashed around the globe. Many markets simply battened down the hatches and didn’t open. What has been going on?

The simplest answer is: distressed selling. Hedge fund redemptions prompted one round of sales. Steep losses in the leveraged loan market, related to Icelandic banks, piled on further pressure. Then there were fears about whether $450bn of credit default swaps taken out to insure Lehman bonds would settle on Friday afternoon. Distress spread from there. Even gold was not immune. Bargains have been spurned – the S&P 500 is now trading on 9 times forward earnings, its cheapest level since 1985. But those deals are going to remain on the table until investors are clearer what the rules are – let alone valuations.