Up for an early morning post; very bracing. It looks as if it's trying to snow.

No list of contents today as this post will pretty much have one theme.

While we were on holiday we got into the habit of watching the 7 pm news on ABC1. The absolute best time of day for us was sundown (at 6pm) and the hour or so before, so we didn't feel inclined to come in and watch the telly until after dark.

The striking thing about the news in Australia was how little of it was about Europe in general or the UK in particular. Apart from some sports coverage (chiefly the Six Nations), the only item that made it on to Australia's news from home was the run on the shares of HBOS. Incidentally, Rugby Union in Australia seems a much more violent game than it is here. Appalling fouls followed by oh so lame excuses was one of the diverting items on the news.

No news from Britain wasn't a problem but it's absence did make you wonder what we're doing that deserves such comprehensive lack of interest. One of the first items I heard on the news when we got back was about too many fast food outlets being located on children's routes home from school; that sounded like news worthy of being ignored.

Another story to make it on to ABC was the collapse of Bear Stearns. Business coverage was excellent but there was surprisingly little about Hillary and Obama. as it happens the piece of work I was doing last week involved reading about HBOS and Bear Stearns and JP Morgan, its buyer, in several different newspapers.

With the sale of Bear Stearns it looks as if the current credit crisis is beginning to create its own iconic moments. The huge losses suffered by investors such as Joe Lewis, and directors and staff looks likely to become legend. The absence of the Chairman, James Cayne, at a bridge tournament during the crucial days when confidence in the bank tumbled won't be forgotten for a long time. To be fair, Cayne is a world class bridge player and absenting himself from the tournament might have rocked confidence in the bank even more seriously.

The collapse of Bear Stearns was momentous and people in the financial world and beyond may say that, after that, things will not be the same again. But there are more forces at work out of sight to make sure that things will be even less like they once were.**

Late last week Bloomberg TV carried an interview with an expert commentator called Robert Pozen. He said something to the effect that investment industry wouldn't want to get rid of off-balance sheet vehicles entirely. He didn't go as far as to explain what useful part they played in the big scheme of things but presumably it's along the lines that some worthwhile projects get finance because banks know they can sell on some of the risk of making loans to the (worthwhile) projects. As it happens, so far it has been chiefly the infamous sub-prime mortgages that have been helped along by off-balance sheet vehicles but it could have been other types of investment.

Robert Pozen then went on to say that the real problem about these off-balance sheet vehicles (if I understood correctly)was that financial institutions had made undertakings to them in the event that they got into difficulties. When the difficulties arose there were covenants in place that meant that off-balance sheet problems would eventually become on-balance sheet problems. Mr Pozen added that he thought it would be the end of the (northern hemisphere) summer before all or most of these problems were out in the open.

I suppose you might say that these bank undertakings are a kind of a trade secret. Whether or not the secrets are legitimate is beside the point: Investors will only trust keepers of secrets if they believe them to be a) basically trustworthy and, b) basically competent. Clearly, bankers do not score well on either count at the moment.

The reason that financial institutions can keep the lid on these disastrous undertakings to bail out off-balance sheet vehicles seems to be that accounting rules permit them to do so. In ordinary life this would be like a romance and then discovering the man has a partner and five kids that he never let on about, and the man saying that he only ever lets on about his wife and family on the 31st December each year.

This is all very unfair for investors because it means that the bankers have even more of an advantage than before. The only check on bankers exploiting their inside information for their own investment purposes is that they can't trust bankers at other banks. It's well worth keeping a close eye on bank directors trading in their own stock these days.

** It's beginning to look more likely that financial institutions in other parts of the world will steal a march on western institutions over the next two or three years and the balance of economic power will shift more radically than we've all been expecting.