The credit crunch is still serving up new shocks. Investor confidence, already undermined, is now being totally eroded. No sooner are we thinking that the banks have made the necessary writedowns in respect of their subprime risks, than yet another player takes us by surprise by announcing billions of non-performing loans, or even insolvency.

The banks are calling for capital themselves and are becoming very reluctant to lend, thereby weakening the economy. Hedge funds financed by loans are also getting into difficulties.