This is indeed the hurricane season. Over the past two weeks, the world has watched a huge financial storm drive the grandest vessels in the US fleet on to the rocks. The government has, in effect, nationalised Fannie Mae, Freddie Mac and AIG. It has let Lehman sink. A terrified Merrill Lynch then flew into the haven offered by Bank of America. The storm has even battered mighty Morgan Stanley and Goldman Sachs. This cannot go on. A government rescue is on the way.

At the beginning of this financial storm, a little over a year ago, many hoped that the private sector could rescue itself, with help from lower interest rates and easy liquidity from central banks. The failure of Bear Stearns then showed that one-off official interventions were also necessary, to save systemically significant institutions, among whom numbered investment banks.