Sometimes the stock market can be more revolutionary than any socialist. One of the great redistributions of wealth is taking place before our eyes, without a drop of blood being shed or a single factory being nationalised.
After the steep falls of the past few weeks, share prices have now fallen by one-third since Millennium Eve. About £600bn has been wiped from the value of blue chip companies. The old and well-off are suffering. The young - and maybe even the poor - will eventually benefit.
I lunched the other day with a share trader from a big European investment bank. He expects to be sacked at any moment. Jobs, he says, are going at a phenomenal rate, although few City employers admit the size of the cuts. "I swear to you," he groaned, "I go across the trading floor [one of those typical football pitch-sized plains of dealers] to take a leak and there are fewer screens on the way back than on the way there."
All kinds of reasons are given for the collapse. The mistrust of audited accounts in the wake of Enron and its accountants Andersen, who have just been convicted of obstructing justice by shredding documents. The lack of trust in company managers after Enron, Tyco, Marconi et al. The fear that interest rates are heading back up - which adds to company borrowing costs and makes bonds (lending money to companies) more attractive than equities (taking a share in ownership). Jitters about the weaker insurance companies, which are dumping shares to meet requirements that they hold enough cash to meet their obligations. The role of the hedge fund managers in "shorting" shares - betting that prices will drop by selling shares they don't own in the hope they can buy them back later for less.
All these have played a part. But the truth is that share prices in the 1990s were pushed up much, much too high. Wall Street and, to a lesser extent, the City became a hype machine for flogging equities. Snake oil sellers look positively principled compared with some of the investment analysts who would recommend any old rubbish to clinch their bonuses. Share prices are just coming back to sensible levels. Even now, by any conventional measure of value - such as yields or price/earnings ratios - they are still high.
For those of us outside the Square Mile, the fall in share prices is overall neutral, so long as the long-term prospects for the economy haven't worsened. It is bad news for those who already own assets, but good for those who don't but aspire to (ie, everyone else). Broadly, those over 50, who have done the bulk of their retirement saving, are hurt, while those under 40 should be celebrating. They still have most of their retirement saving ahead of them and can now snap up assets cheaper than otherwise.
Anyone trying to afford a first toehold on the housing ladder would love a steep plunge in property prices. The same is true for people starting to save for a pension. The share market slide is nature's way of redistributing wealth from the haves to the have-nots of the next generation, and it's all done without a penny of inheritance tax being forked out. Now we just need house prices (gently) to go the same way.
Dawn raids by fraud investigators are great fun for all concerned (except those raided, of course). The investigators - accountants who spend most of their lives sweating over company accounts - get to feel like hotshot detectives. The fraud victims feel they are being taken seriously. And we financial journalists get to write nice, colourful stories.
For sheer machismo, the Americans leave us standing. At 6am on 12 June, FBI officials raided the glitzy Manhattan loft apartment of Samuel Waksal, handcuffed him in front of his daughters and led him away. Waksal is accused of insider dealing. He allegedly alerted friends and relations (including his former lover Martha Stewart, the wholesome guru of American good manners) of a setback for the cancer drug he was developing, enabling some of them to bail out before the share price collapsed. Investors without that same inside knowledge have lost $5bn.
Our Serious Fraud Office - though it has greatly improved its conviction rate in recent years - isn't quite in the same league as the FBI. Ajit Patel, the chief executive of Goldshield, one of six drugs companies under investigation for alleged fraud against the NHS, has revealed how its officials tried to raid his home, again choosing 6am to bang on the door.
Alas, the gumshoes had failed to ascertain that Patel had sold up and was living elsewhere. The new owners were not thrilled and the element of surprise was lost.
I leave you with my favourite dawn raid story: the time when SFO investigators arrived at the home of Kevin and Pandora Maxwell in 1992. Picture the scene. Tousled, nightie-clad Pandora from upstairs window: "Piss off, or I'll call the police." Answer from front doorstep: "Madam, we are the police."
