In geological terms, an aftershock is a smaller tremor that happens a short period after an earthquake has struck. Every so often, however, the aftershock is bigger than the original earthquake and, as a result, the original earthquake has to be renamed the foreshock. The world's financial system in 2008 was characterised by a series of foreshocks. Just when investors thought they had been hit by the biggest financial tsunami of modern times, another wave arrived that was even bigger. After the collapse in September of Lehman Brothers, one of Wall Street's oldest and most revered institutions, one shell-shocked market participant told a correspondent: "Every time we think we've seen the light at the end of the tunnel, it just turns out to be another train coming." But Lehman Brothers' collapse was just the beginning. It set in motion a series of events that eventually led to the nationalisation, or part-nationalisation, of some of the world's most powerful financial institutions. Thinking the unthinkable has become an everyday occurrence for financial forecasters.
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