The markets have been so transfixed by the horror show unfolding through subprime and collateralised debt obligations, they have not been focused on the banks’ other crisis: leveraged loans. Optimists thought that once the loan pipeline slipped below $150bn, debt investors would be cheered by hopes of a logjam clearing and would pile in again. Wrong.

It has been a terrible period for leveraged loan prices – worse than for high-yield bonds despite the unsecured nature of the latter. Some of the reasons may be “technical”, but somehow, that tag no longer has the comforting ring of a short-term blip. “Technical” factors can hang around long enough to inflict more damage on Wall Street through further write-downs – which in some cases could apply to lending commitments still off-balance sheet.