The hour before dawn ?

It is stating the obvious to say these are extraordinary times in both in London and across the world.

It is far less obvious whether this current crisis is ending or just beginning.

Yesterday the Royal Bank of Scotland Group lost 40 % of its value. Today at one point it regained much of this while HBOS rose 60 % before falling back later. That banks with stable Scottish heritage should be fluctuating in price like fruit in a wholesale greengrocer underlines the depths of this crisis.

The solution from London at least is to "part nationalise" (in the words of the FT) all the major banks. While that may bring some relief to share holders and those seeking to borrow money it is doubtful that this is a real solution. Not least it represents a suspension of free market principles and as this crisis is now largely about confidence it does little to inspire that. It also increases the tax payer's exposure. While the banks seem more than happy to accept state support it seems more doubtful that they will accept the other aspects of state ownership. The tabloids are already rumbling with calls for cuts to bonuses, control over penalty charges and cuts to mortgage rate. Whether the banks will find the taste of a public bail out so sweet in the long term seems doubtful.

A temporary suspension of taxation would have cost less and would have been better for the real economy than throwing "good money after bad" in the banking system.

Like any crisis the hour before dawn is always the darkest of the night. What is unclear to me today is whether this is a dawn or just a flickering candle lit at enormous expense.

That the city which has one of the oldest stock markets in the world is today "celebrating" a partial nationalisation of its banks suggests the coming of dawn is uncertain. London is where Karl Marx is buried. I hope it does not prove to be the grave of contemporary free market capitalism which despite its many faults has brought prosperity and benefits to so many around the world.

A part of me remains optimistic. Even at its worst this is another 1929. Even 1929 passed and a dawn came. Let us at least hope the dawn to this crisis comes a little quicker than then.