British shares put up a resilient performance yesterday after a disastrous session in Tokyo, a bad fit of nerves on Wall street and a farewell warning from Sir Andrew Large, shortly retiring as deputy governor of the Bank of England, that markets round the world are too high and "frothy".
It was just the sort of scenario which could have produced a major readjustment.
But the 100-share Footsie index held its nerve, finishing 35.3 points or 0.6 per cent down at 5,663.7 after recovering from a 64-point loss early on, hitting its lowest level since January 3. The FTSE-250 index slipped 34.8 points to 8846.8.
The worry was that it all might have been a dress rehearsal for the real thing.
The Tokyo market had to close 20 minutes early when its computer failed to cope with a flood of panicky "sell" orders after a raid on the offices of Livedoor, an aggressive and widely followed internet company and allegations that it had falsified its accounts.
The Nikkei 225 index, which touched a five-year high last week crashed 465 points, or three per cent. That took its loss this week to 6.8 per cent - equivalent, according to one calculation, to the gross national product of Sweden.
Wall Street's problem was more mundane - unexpectedly weak quarterly results from Intel, the world's biggest maker of computer chips and the internet portal Yahoo.
Much attention focused on Sir Andrew Large, who expressed fears that both banks and investors may be under-estimating risks in the financial system.
He said: "It seems to me, based on my experience, that we are in a position that feels frothy."
This followed a speech last week by Mervyn King, the Bank's Governor, questioning whether today's low inflation and low interest rates round the world can persist.
Some City analysts likened his stance to Alan Greenspan's famous remark in 1996 about Wall Street's "irrational exuberance" - which the US market shrugged aside and went on booming for nearly four years before the technology bubble burst.
Sir Andrew said he had spent much of his three-and-a-half years at the Bank in charge of financial stability improving preparations for coping with the aftermath of a disaster.
That didn't mean a disaster was necessarily going to happen, he stressed.
"The more people that are aware of the reality the more the market is capable of adjusting so as to reduce the likelihood that something nasty will happen."
He added: "All I do know is that there is a non-zero risk of (a financial crisis) and I think that all we can do and should do is to be prepared for such a thing to happen."
He felt lucky to have escaped a serious financial crisis while a deputy governor at the Bank.
Sir Andrew's voluntary retirement, a year before the end of his five-year contract, removes the most persistent opponent of ultra-low interest rates from the Bank's Monetary Policy Committee.
Sentiment wasn't helped by horrible unemployment figures which increased by more than 100,000 to reach the highest level in three years.
That prompted TUC chief economist Ian Brinkley to urge the MPC to cut interest rates further when it meets next month.