House prices are moving from the loft to the basement. Last year's "crisis", with an estimated shortfall of 4m homes, has morphed into a very different kind of problem: plenty of properties on the market but no buyers. The prospect of negative equity is biting into consumer confidence.
The last time it felt like this was the early 1990s, when the Lawson boom turned to bust, and the go-go years of Thatcherism were brought to an uncomfortable end. The loadsamoney culture of that time, brilliantly spoofed by Harry Enfield, was stripped bare by a horrific rise in repossessions.
Many businesses, too, were left high and dry. Having enjoyed a golden period of deregulation, lower taxes and a reduction of union power, second-rate managers fell into the trap of mistaking themselves for genuine tycoons. Their boats bobbed happily at high tide, but finished up stranded when water levels dropped.
The other memorable feature of 1990-91 - a classic sign that the good times were over - was the emergence of spectacular frauds. Easy money has the capacity to hide a multitude of sins. It makes more difficult the task of distinguishing between wealth creators and charlatans.
During the years of plenty, snouts are often buried so deeply in the trough that they are incapable of sniffing out rotten fruit. Only when the swill is exhausted does the stink from corruption become unmissable. That's what happened 17-18 years ago, and, I fear, is about to occur again.
Among the most stunning cases in 1990-91 were Asil Nadir's pyramid of debt at Polly Peck, Robert Maxwell's pension theft from The Mirror, and a hive of criminality, including money-laundering, bribery and terrorism, that masqueraded as a finance house, called the Bank of Credit and Commerce International. In each case, warnings from sceptical investors, analysts and reporters were either ignored or suppressed - until it was too late.
History tells us that at the end of a borrowing binge, when the cash has run out but the bills are still mounting, some ordinary folk are seduced by the apparent quick-fix of "victimless" crime (there is, of course, no such thing). Examples include dodgy insurance claims, which according to the Association of British Insurers are costing the industry about £1.6bn a year, and fraudulent applications for credit cards and mortgages.
In America, where the credit crunch is more advanced than in Britain, there have been 50,000 cases of suspected mortgage
fraud this year. Many of them became evident only after the borrower had gone bust.
More interesting, and potentially devastating, is the jumbo corporate fraud, as managers, desperate to sustain the impression of success, resort to book-cooking. They don't set out to cheat, but slide into malfeasance as fictitious transactions become ever bigger to cover up previous mistakes. This, in effect, is the allegation against Jerome Kerviel, the trader at Societe Generale, who is accused of losing €4.9bn.
Hard times are back, and so are the fraudsters
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