These are difficult times . As one seasoned American observer said last week: "Things are ugly out there, very ugly." It is impossible to disagree.

Almost three months from the start of the global credit crunch that followed the slowdown in the US housing market and the resultant sub-prime mortgage crisis, the phoney war looks well and truly over.

The expected departure of Charles Prince from the helm of Citigroup, the world's largest bank, after the company said it had written down or lost $6.5bn (£3.1bn), comes hot on the heels of the ousting of Merrill Lynch boss Stan O'Neal for $8.4bn of losses there. Big banks, huge losses. All is not well.

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