Matthew Lynn

The queues haven’t started forming outside branches in Frankfurt or Cologne yet. Even so, it is hard not to suspect that something is badly amiss at Deutsche Bank, Germany’s and indeed Europe’s mightiest financial institution, and the rock on which that economy is founded. The shares have been in freefall, and executives have been wheeled out to try and reassure everyone that all is well. For Deutsche to be in trouble is bad enough. But here’s the real problem. If Deutsche does go down, it is taking the euro down with it. Why? Because if Germany bails it out, the contrast with the punishment metered out to Greek banks will be too painful to contemplate. And yet, were it to be allowed to fail, it would be catastrophic for the German economy.

If anyone is feeling pleased about the slide on the stock-market today, it is probably Andrew Roberts, the RBS analyst who hit the headlines this week with a note advising everyone to ‘sell everything’. Probably rather sooner than he expected, and before any of his clients even had time to panic properly, prices have started to collapse. Almost every day, there are hefty three digits falls, and pictures editors are running out of their stock photos of despairing traders looking glumly into their Bloomberg terminals. The numbers suggest that a bear market, usually defined as a 20 percent drop off the highs, is now very close. China’s Shenzhen index is already there. The FTSE is down from just shy of 7,000 in July to 5,780 now.

The iPhone had not yet been launched. Sven-Goran Eriksson was still managing the England football team. A 17-year-old Taylor Swift had just had her first hit. Plenty has changed since June 2006, but one thing has remained remarkably constant - the cost of money. In the nine years since then, the Federal Reserve has cut interest rates, but until yesterday it had never raised them. With the exception of one misjudged rate rise from the European Central Bank, which was quickly reversed, neither has any other country. For almost an entire decade, money has been remarkably cheap by any historical standards. By that measure alone, yesterday's decision from the Fed to finally raise rates is a big deal.

Turn-up. Eat lunch. Swap a few pleasantries with the other people in the room, leave interest rates on hold, and then collect a cheque on the way out. I am starting to wonder why I can’t have a job on the Bank of England’s Monetary Policy Committee. It certainly doesn’t look terribly difficult. This week, the Bank is making a change to its usual routine. Instead of just announcing the latest monthly decision on rates, it is also releasing a vast amount of fresh information on the economy, in a move that the media have already dubbed ‘Super Thursday’, presumably on the grounds that unlike plain old ordinary Thursdays, City journalists and economic pundits will have lots of new data and forecasts to play around with.

Ten years ago, the Greek minister Yainnos Papantoniou came to London to give a talk at the London School of Economic on the country’s first four years as a member of the euro. A skilled, pro European technocrat, Papantoniou had, more than anyone else, steered his country through dogged German resistance into the single currency. Papantoniou boasted that a history of weak growth and chaotic government had been swept aside, and that Greece was now the equal of Germany and France. What lay ahead, he argued was 'a new dynamic phase for the Greek economy, based on knowledge and modern structures'. A 'bolstering of national self-confidence' would be the natural result. It was an articulate exposition of the view of a whole generation of Mediterranean politicians, eurocrats and bankers.

It was 2 May 1997. Not only was most of the country celebrating the election of a bright young Kennedy-esque Prime Minister called Tony Blair, so too, perhaps more surprisingly, were the champagne-swilling Thatcherites of the City of London. As the government took office, the FTSE 100 index climbed up to 4,455, and it was to carry on rising over the next few months, reaching 5,193 by the year’s end. Indeed, for much of its first term, Britain’s last Labour government was accompanied by a raging bull market, as the dotcom bubble reached its peak. Will history repeat itself? In May, we may well see another newly elected Labour prime minister, Ed Miliband. Unlike his predecessor Blair, Red Ed seems rather more committed to old-fashioned socialism.

Teenagers have never exactly been short of things to complain about to their parents. You didn’t give them enough support, sent them to the wrong schools, stopped them going to the right parties, or didn’t get them the latest iPhone. But Generation Rent, perhaps stirred up by too much time spent reading Ed Miliband’s Twitter feed, are likely to be especially aggrieved. To add to the traditional litany of charges from the younger generation against the older can be added one that might even have a kernel of truth in it — you stole our future. There is a case to be made that the big divide in British society, as indeed in most developed economies, is not between classes, races, religions or regions, but between generations.

It might not be something you want to mention in the Half Moon Inn in Balcombe, or around any of the other communities where people are getting anxious about shale gas explorers ripping up the countryside with their drills and pipelines. But if shale is the tremendous source of wealth that David Cameron insists it can be for this country, how do you go about investing it? After all, if there are fortunes to be made, there is no reason not to claim your share. There is no longer any question that shale gas is a major industry. In the US, where it is most advanced, it is already worth $76 billion annually, according to its trade association, and by the end of next year that will have grown to $118 billion.

There are few things most of us enjoy more than watching the value of our houses rocket. Every homeowner will have felt the pulse of excitement that comes from a mental calculation of how much has been added to their net worth by the latest bulletin from Rightmove or the Halifax. Yet fast forward two or three years and the same news could make our hearts sink — because by then a mansion tax could well have been introduced, and rising prices will take many middle-class owners over the threshold. The mansion tax bandwagon has been rolling for several years, pushed enthusiastically by business secretary Vince Cable and his Lib Dem colleagues. The idea is that any home worth more than £2 million would be taxed at an annual rate of 1 per cent of its value above the threshold.

The weather might not be what it once was, and the football season might start so quickly it feels like it has hardly been away, but there is one thing everyone can surely agree on about August. Nothing of any importance happens. As we head into the dog days of summer, everyone can sling their feet up on the desk and relax. All the people who really matter — the ones running the big corporations, the banks or the government — are off sunning themselves by a pool somewhere. As for the office, it’s about as busy as a job centre in downtown Athens. The only people left are the post boy and the interns busy updating their Facebook pages. It’s impossible to imagine anything of significance happening.

No Bank of England governor has ever been installed in office with quite so much advance hype as Mark Carney. When he moves from running to the Bank of Canada to his new office in Threadneedle Street, expectations will be running high. Carney arrives with a reputation as a master of economic strategy, a man who can single-handedly steer an economy through the most treacherous of waters, and get a country growing again with a few deft strokes of monetary magic. Certainly, George Osborne has invested his hopes in him. During Carney’s time as governor in Canada, the country was ‘acknowledged to have weathered the economic storm better than any other major western economy’, he said on announcing the appointment.

Josef Ackermann is something of a rarity in big business these days. Speculating last month on the possibility of a woman one day joining his board, the Deutsche Bank chief executive remarked that she might make it ‘more colourful and prettier’. Despite howls of outrage from the sisterhood — or the Schwesternschaft, as they are somewhat scarily called in Germany — what was interesting about the banker’s casual sexism was how odd it sounded rather than how ordinary. Most CEOs these days would rather boast about how their factories pumped millions of tonnes of CO2 into the atmosphere than make any remark that could be construed as disparaging to women.

Iceland is recovering from its financial shock – without the aid of a bank bailout It’s been a good week for the admittedly small band of people who get excited about the decisions made by central banks. In America, the Federal Reserve embarked on a second great round of printing money. In this country, the Bank of England abandoned any idea of controlling inflation, leaving interest rates at a three-century low despite having missed its inflation target for seven months. But by far the most interesting decision was made a long way to the north, in a country which people usually only pay attention to when its banks or volcanoes blow up, bringing either the financial or air traffic system grinding to a halt.