Stabilising markets

YESTERDAY’S news that American consumer sentiment has dropped to its lowest point in more than three decades will do little to lift spirits across a western world battered and bruised by seemingly incessant bad economic news.

However, it is not all doom and gloom. Yesterday’s decision by four European governments — France, Italy, Spain and Belgium — to ban short-selling to try to stabilise markets is not by any means unprecedented but it is unusual.

Allied to German calls for a ban on naked short-selling of stocks, government bonds and credit default swaps, it suggests that the dog might be about to reassert control over its tail.