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Interestiung that you should mention Goldmans. There was a very interesting conversation on the Today programme at about 8:45 with a former employee of Goldmans. He was saying that they massively shorted on the mortgage market, just as Poulson had. Only they went big.

Now what shorting involves is selling something which you haven't got, to some body who thinks that the price will rise, rather than fall. Now in order to short you have to deliver something to the purchaser to show that they are the new beneficial owner, a piece of paper. So, the short seller must have borrowed the 'paper' from somebody else, to make delivery to the purchaser. It is no wonder that the mortgage market in America failed, as did AIG, who of course sponsored Manchester United.

Now the point is that once the price starts to fall then the original holder has probably lent some money to somebody else, or borrowed against their original holding, so they would have used the original piece of paper as collateral, but the short seller keeps driving the porice down, because now there are forced sellers, they need to raise money, the shorter keeps selling, driving the price down, and the buyers who thought that the prices would keep rising now begin to get nervous, look at their investment returns are falling, and that they are having to set more and more aside for contingency, and the market smells forced sellers, so they short as well. The vicious circle continues, just as it did with the banking shares in our market.

The problem is the same with inflation and interest rates, on government bonds. They have been buying in older issues with high interest rates and issuing new bonds with lower yields, which they banks have had to purchase, and now the vice is about to close. Higher yields mean falling prices, and the banks balance sheets will look worse, and so they will have to cash in the bonds, unless they treat them as cash. However, the prices will continue to fall, and as Goldman are now saying that the bull market is due to collapse, then there will be another wall of money hitting the market in something else.

Let us not hope that the media are not part of another big game, where Goldman short the market in commodities, and that they now need sellers so that the prices fall, so that they can again make a killing on the market. They would not have shorted now, they would have shorted some time ago, and now, snap. The vice closes, we are all in the grip of misery, and destitution is just around