Eleven years ago, Alan Greenspan, then chairman of the Federal Reserve, mused: “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

The answer was we do not; we only discover afterwards. But we do know when exuberance has turned to fear and that is the mood in which many businesses enter 2008.