I hate to say I told you so, but I did rather tell you so. At the start of last week I suggested here that there were reasons to worry about stock markets, and the financial system generally. At that time the FTSE 100 Index, the generally used measure, was at about 6,527. Last night it closed at about 6,212.
A fall of about five per cent in ten working days does not take us into Wall Street Crash territory, but it does suggest plenty of others shared my concerns. The past few days have seen something close to panic. Not that panic is unusual on the markets.
The way stock markets work is that people who suspect their shares are overvalued continue to hold them anyway. This is because they are afraid that, if they sell too early, they will miss out on further rises. They then dump them in an insane scramble when bad news comes along. This is what drives markets. Fear and greed.
I suggested that shares were being held up because people were forced to invest there for any kind of income, there being no ways of generating a return on your savings anywhere else. Meanwhile, there were signs that sophisticated investors, the big banks and other financial institutions, were so disenchanted with the geopolitical/global economic situation that they were preferring to stuff their cash into safe havens, government bonds, even if these were actually losing them money year on year.
What has happened is that most of the negative factors known then have got worse. Ebola, worse. IS and the Middle East, worse. The US economy, worse. The eurozone, worse, with the three biggest economies, Germany, France and Italy, all apparently going into reverse, for different reasons.
The falling oil price, which is at a level that would have been astonishing a month ago, should be good news, if we as consumers and our basic industries have to pay less for fuel. Except that the price is falling, despite international tensions that would normally force it up, because of global economic weakness, particularly in China.
The other day the UK inflation figures came in well below what was expected. Again, this would once have been good news. Now it is seen as a negative, because it suggests our economy is stagnating.
I suspect the markets will stabilise at around this level, if a little lower. But it leaves an awful lot of clever and highly paid City analysts, many of whom saw that FTSE 100 figure at 7,200 or 7,400 by the end of this year, looking very silly indeed.