February's collapse of the London-based Peloton hedge fund was a clear indication of the scale of the banking crisis.
Next we saw the further collapse of the Bear Stearns bank, and even the Financial Times declared that "there is a whiff of 1929 about this".
As the crisis gathered, Peloton managers informed investors that its flagship fund, supposedly worth £1 billion, was worthless and it did not know how much its remaining £800 million fund would have left after banks seized and sold its assets.
Peloton cofounder Ron Beller apologised to investors after revealing that he and two partners had lost £60 million: "I just can't come up with the words to express our regret adequately." Indeed.
Unlike others, Peloton made huge profits from the subprime mortgage debacle in the US. Peloton's top manager described proudly how it had gambled on a "'world coming to an end' trade that debt linked to subprime loans would tumble and higher quality securities would rise".
As a result the firm's ABS investment fund rose 87 percent in 2007. EuroHedge magazine awarded the fund best new fixed-income fund. Now, despite investing in high quality mortgages, it's worthless.
It fell victim to its bankers' loss of confidence in its solvency. They demanded it repay some of its loans. As a result, Peloton sold its securities, leading to a fall in its fund's value and more calls from the bankers. So such spirals go on until confidence is restored or, more usually in the present climate, disaster strikes.
As Financial Times associate editor Wolfgang Munchau wrote, "I cannot offer an effective solution... and believe that this crisis will slowly spread from segment to segment of the credit market. It will spill over into the rest of the financial market and to the real economy.
"I suspect we will ultimately end up with some combination of regulatory relief, fiscal bailouts, nationalisations and many, many bankruptcies of financial institutions not too big to fail."
Let's return to Ron Beller and friends, and the link between these financial gymnastics and the people who end up running our schools and government social policy. Beller became famous during the 2004 trial of Goldman Sachs secretary Joyti De-Laurey, who stole £4.3 million from Beller, his wife, Jennifer Moses, and another partner. Intriguingly the three said they had not noticed that the money had disappeared from their bank accounts.
Beller quickly hurled himself back into the financial world and also philanthropic work, including supporting an academy school in Marylebone through Ark, a hedge fund backed charity. Jennifer Moses sits on the board of Ark, which is poised to open another academy in Wembley despite sustained opposition.
Ms Moses has been asked by Gordon Brown to advise on social policy. Her views on how to get people off benefits were reportedly viewed as so tough by Tony Blair that he refused to back her. But her views are unexceptional in Number 10 nowadays.
Perhaps we should leave the last word to Joyti De-Laurey, who was released from jail last summer: "[Beller] has lost a lot of people's money - a lot more than I took from them - and I did three and a half years."