The US is a rounding error away from a bear market. At Monday’s close, after a wild trading day, the S&P 500 was 19.99 per cent below its peak, set last October. The definition of a bear market, to the extent that it matters, is a 20 per cent fall.

Monday demonstrated that market psychology is dominated by two fears: the dangers of an attack on Iran and of the collapse of a US regional bank. Thanks to prediction markets and credit derivatives, we can quantify those fears.