… expectations that the housing crisis would trigger a collapse of US consumption and employment have, so far, proved wide of the mark. Second, and this is easy to lose sight of, shares and house prices have ended this year considerably higher than they began, despite all the horror stories.

In America, the Dow Jones is 7 per cent higher than 12 months ago, having hit a record as recently as October 9. The FTSE 100 is up 5 per cent and Germany’s DAX has gained no less than 23 per cent and is near its all-time high, having fully recovered the losses of July and August. In Asia, stock markets are all far above levels before the credit crisis, with Hong Kong up 40 per cent on the year and Shanghai up 70 per cent. Only in Japan have asset prices substantially fallen, hardly surprising considering the renewed incompetence of the country’s economic and political management since Junichiro Koizumi resigned as prime minister in 2006.

Property markets, too, have faired much better that one might imagine, at least outside America. Last week, Nationwide said its house-price index fell for a second consecutive month in December and most analysts (including me) expect the market to get a lot worse. But it’s the strength, not weakness, of house prices in 2007 that is most remarkable. Nationwide’s figure is 5 per cent higher than a year ago, even after the recent falls. In London, where prices are falling more steeply than in the rest of the country – and are likely to fall faster in the year ahead – the average house price is still about 10 per cent up on the year.