In my Any Other Business column in the magazine this week I warn that the overheating of the Shanghai stock market looks highly likely to lead to a local crash – swiftly followed by a wobble on major western markets. Though I’m not expecting the wobble to be a catastrophic one, I find myself moving towards the gloomier end of the spectrum of my usual don’t-panic-it’ll-be-all-right view of stock market behaviour. Two items in today’s Daily Telegraph reinforce this. First, the ex Fed chairman Alan Greenspan says the Shanghai bubble is ‘clearly unsustainable’ and points towards ‘a dramatic contraction at some point’ – which by his standards of impenetrably oblique market commentary is the equivalent of a tabloid headline screaming ‘World To End Tomorrow’. And second, weather forecasters are predicting a 75 per cent chance of a worse-than-usual hurricane season from June to November in the Gulf of Mexico – and if they’re right, Wall St investors will be discombobulated even before the oil refineries are disrupted and the billion-dollar insurance claims start rolling in.
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