To judge by the reactions of some, financial markets have gone completely off the charts. Goldman Sachs says its quantitative funds experienced “things that were twenty-five standard deviation moves”. Leveraged buy-out activity, from the auction of Cadbury’s drinks unit to the sale of TXU, is said to be at risk. Kohlberg Kravis Roberts and Blackstone have lowered their expectations for the LBO market. Meanwhile, banks have been hoarding cash, prompting the European Central Bank’s biggest ever intervention.

Yet the uncomfortable fact is that by any historical standard, nothing that serious has happened. For example, in the second-last week of July, US junk debt yields jumped by 50 basis points using Lehman Brothers’ index. But since the end of 1986, a weekly rise or fall of at least 50 basis points has been seen no fewer than 37 times. Also, the idea that equity volatility is unprecedented is dubious. The S&P 500 index has lost 6 per cent in four weeks. An equivalent move in either direction has been seen 123 times since 1986.