December 20, 2007 | posted by Michael Baxter in Banking, credit crunch |

When one of the leading investment banks in the world reveals its first quarterly loss in 72 years, you know there must be trouble afoot. That’s what happened yesterday, but relax. China, with all its spare cash, came riding in over the hill, saving the day, as the business world’s equivalent of the US cavalry prepared to patch up Fort Wall Street.

Mind you, it was not just in China where the cavalry is preparing to gallop to the rescue. India too had its horsemen ride out, carrying their message of hope as they prepare to save our bacon, or to be precise: Jaguar’s bacon.

As for the central banks, it seems to be a case of ‘read my lips.’ “We are worried about inflation,” which of course is code for “no more rate cuts.” Yet the markets are reading something quite different. Mind you, the Bank of England has turned tail, and is suddenly looking like a rate-cutting enthusiast of the first degree.

When Mervyn King and chums let that visage of caring about inflation slip, they took the pound with them, which sunk below $2 for the first time since June.

But, perhaps something more significant than all that happened yesterday. We all know the world has its fair share of environmental problems to worry about, but while delegates were still returning from Bali, the EU has gone along and agreed to something that could have future generations curse us over their dinner of imitation fish and chips. Yesterday, European fisheries ministers finally bowed to the pressures of short-termism in a move so astonishing that all of a sudden the roller coaster ride that was this year’s stock market seems like a paragon of stability.