Last week David Lemoine, the treasurer of the US state Maine, described a $20m investment by the state in a structured investment vehicle that was later downgraded to junk as a “black swan event”.

The ornithological reference was meant to suggest “an event which is unbelievable until actually seen”, he said. However, black swans have now been found by local government fund managers in at least half a dozen US states. In fact, billions of US taxpayers’ dollars are caught up in investments at the centre of the current credit storm.