All waiting for a plan from Greenspan

Bonds down, equities down, dollar down, Italian government down and finally - Irish interest rates down . . . investors were reeling by close of business on Friday. Until last week, government bonds had been the safe haven that the "flight to quality" people settled in while all around them was crumbling. This time, no one was safe.

It was like the final moments of a disaster movie where the special effects grow ever more spectacular before Our Hero appears to rescue mankind. Only who is the White Knight of the financial services Armageddon? Chairman of the US Federal Reserve, Alan Greenspan, (Bruce Willis in a slightly older role?) has been the concerned guy in the background predicting the annihilation of mankind. Now everyone has turned to him, looking for words of wisdom that they will actually believe this time. There's an unspoken belief that somehow Alan is going to do something, anything to make things all right again - though let's face it, a quick fix is out of the question. Still, it's an interesting point that, having made pots of money in the bull market, people want to be bailed out as soon as things turn around. However, the investment community is waiting for "A Plan" from Greenspan and the Fed and is anxiously surveying the debris of the markets in the meantime. (Once the Plan doesn't involve a sweat-stained and torn combat-green Tshirt I don't mind.)

However, Alan has "never seen anything like this before" which is always a little bit worrying when you're waiting for A Plan to be revealed. And as cannons sound to the left and the right Mr Greenspan warns "this thing hasn't come to an end yet".

Leaving space for Meltdown 2, just as you thought it was safe to get back in the market. The main villains of the piece continue to be the Japanese whose inability to sort out their financial mess sparked off the crisis in the first place. However, the government and opposition have (finally) agreed on a second round of legislation which should assure the approval of laws to recapitalise and/or nationalise failing banks.

The rescue fund totals around 60 trillion yen ($510 billion [£336 billion]) which should pay for some fairly decent special effects. It certainly overwhelms the $150 billion that the US government needed to ride to the rescue of the savings and loans banks back in the 1980s. Although the market is relieved that the Japanese are finally getting something done, initial enthusiasm will surely wane as it always does.

However, Long Term Capital Management (LTCM) - the US hedge fund - continues to be the villain closer to home. Ever since it made a late guest appearance, it has really captured the imagination of the public and the cash of a number of banks who wish they'd known better. (Including the Bank of Italy - the Italian central bank, which had actually invested with LTCM!).

The terror concerning LTCM is that people don't really know what positions they hold and when those positions might be liquidated. So everyone is worried that any move in the market could be due to a fire-sale of LTCM assets.

What's left? Well, cash - when you sell everything you've suddenly got a lot of cash. Only problem with lots of cash is that you've got to keep it in the interbank market. And investors hate the banks at the moment too. After all, it was the banks that lent money to Asia, Russia, and Latin America. And the banks have lost money to LTCM. So your risk management gurus don't want too much money lying around with the banks right now.

Personally, I still like jewellery. That's not an investment choice, though, it's more of a weakness. Diamond and gold prices haven't exactly set the world alight either, but at least they look a lot more attractive hanging around your neck than a US Treasury Bond. I hope Greenspan does have a plan, but I'm not holding my breath.

Back home, the long-awaited interest rate cuts were pushed off the front pages by the sight of dirty linen being washed in public as potential tax bills hit the headlines. I remember the outrage that was generated when DIRT tax was first implemented and the number of people who wanted to know if Belfast was considered to be outside the State as far as the tax was concerned. What can I say about tax that hasn't been said already?

The Central Bank must be getting tired of being in the public eye. The general public always assumes that the Bank is supposed to look after the interests of the consumer, but, of course, the Central Bank is more concerned with the stability of the financial system. And tending both the concerns of the public and the stability of the banking system don't necessarily go hand-in-hand all the time. Ask the Fed. . .

I continue to try out the airlines to and from London. Last week, it was British Midland which uses an Airbus for the trip. The Airbus certainly seems to have a lot more room than the Boeings, although I'm not sure about the overhead lockers - there was the usual attempt by fellow passengers to squeeze large bags into small spaces. I sat smugly with my small bag stowed under the seat in front of me in accordance with instructions and secure in the knowledge that my luggage was in the hold. Actually it wasn't, it was still at Heathrow but it was promptly delivered by British Midland later that evening so it wasn't that much of an inconvenience. Actually, given the weight of the bag, it was something of a blessing!

Anyway the flight was fine and Heathrow was its usual chaotic self, but what really intrigued me about the British Midland experience was its Irish language announcements. The English announcements are done by a man with a mid-Atlantic accent and are taped which is more convenient than being spoken by someone who's desperately trying to keep their balance as the plane trundles along the runway. The Irish announcements are also done by a man with a mid-Atlantic accent but it's the weirdest thing I've ever heard! I suppose there's no reason why you can't have an anodyne Irish accent but it's surreal.

Mind you, the mid-Atlantic English doesn't much sound like English either so it didn't make much difference. To keep things truly international, though, we were served with Italian chicken on tomato bread which wouldn't be traditional fare in the Gaeltacht. Neither would hedge funds, I suppose, but they're having an impact all the same.