Charles Arthur has come up with an inspired analogy for the sub-prime credit syndrome

But here’s the thing: all the reselling and leveraging of debt, in some cases producing up to $60 of “debt” from $1 of assets (and those assets not always too certain – how much is a house worth? Only what you can get someone to pay for it), was a way of feeding back into the system things that were already contaminated.

Which reminds me of the story that I covered in great detail in the late 1990s and early 2000s: BSE. Cows, fed ground-up cows. Any trace of disease (especially a brain-rotting one, which may have been endemic) gets transmitted throughout the (thundering) herd.

BSE turned out to be very, very hard indeed to eradicate – I’m not sure it’s gone away even now. (I’ll check the stats in a bit.) I think that the financial BSE in the system now is going to prove just as hard to get rid of; only when you flush all the crap that the banks have been feeding each other out of the system can you be sure it’s OK. And how long exactly will that take?