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Thirty hours before the LTCM debacle hit the newswires Bill McDonough, chairman of the New York Fed, warned an audience of credit quants in London of a "situation which I regard by some considerable margin as the most dangerous since the Second World War". Of course the quants saw it as an attack on their credit models, which, obliquely, it was: which modeller had Meriwether on the radar screen? But McDonough may also have been referring to another threat to the US banking system: the move of Herbie, Euromoney's superbanker, who has been under his distant surveillance for nearly 20 years, back to Boot Hill headquarters in Arizona. David Shirreff

The anonymous poet of UBS has been moved to add a coda to his famous Christmas 1997 ballad "Bonus in the bin" (Euromoney, March 1998).

Down but not out

A falling stock market, a dearth of new deals and a faltering privatization programme: on the face of it the Egyptian securities market seems to be in trouble. But look deeper and the picture is not so bleak. Stock prices are holding up better than elsewhere and there is strong government commitment towards broadening and deepening Cairo's capital markets. Philip Moore reports.

Next year, the world economy will shrink. Only Europe will have moderate growth. Wealth destruction will produce a growth recession in the US. Japan will continue to emulate an economic black hole in the middle of a time warp. Emergent economies' growth will be negative.

High-yield bond analysts usually resign themselves to a constant treadmill of visits to engineering firms, chemicals plants and pet food factories as they tirelessly assess the worth of the world's corporates.

Leading banks, academics and regulators spent two days stress-testing themselves and the latest in credit risk models. David Shirreff reports.

We are dominated by ideals: perfect tax systems, monetary discipline, level playing fields and - above all - unambiguous lines of ownership. In the real world, though, financial systems and ownership structures are never quite what they seem. The governance of a US joint-stock company is not that far removed from a Chinese village-owned enterprise. And this may not be the best time to impose our ideals on Asia, argues Harrison Young.

In the west, shrinking government, and regions competing for funds under the euro; in the east, a need to upgrade infrastructure and outshine the sovereign credit. The emerging European municipal bond market looks more attractive than bank debt. Marcus Walker reports.

On 24 September, Deutsche Bank announced it it had bought a stake of 4.5% in Banca Commerciale Italiana (BCI) for L700billion ($420 million).

French banks are starting to restructure and consolidate. But they remain obsessed by the domestic market and are more concerned with market share than return on equity. All that will change with the euro. Rebecca Bream reports.

To lose one fortune, Mr Meriwether, may be regarded as a misfortune. To lose two fortunes looks like carelessness.