With Wall Street banks set to lose Half a Billion Dollars between them, according to the BBC, could the world be set for very rocky times.  If nothing else, individuals and corporations will find it quite a bit harder to borrow than before.

Companies could be caught in a bear hug; their costs, in the shape of credit and ever rising commodity prices, are being pushed up and consumers are running for cover.  We are entering uncharted waters here and Central Banks (so long the heroes) are undecided on how to react.  The US Federal Reserve has cut rates aggressivley but the European Central Bank faces inflationary pressures and a two speed economy in the Eurozone.  The Bank of England, still smarting from a couple of humiliations this year, feels the need to look resolute and may find it hard to cut rates quickly, even if needed.

It may get quite a bit worse before it improves.