Who said the high-end would hold up best?

Upmarket Sloane Square department store has been the worst performing outlet in the John Lewis group this year

"The crisis of confidence among City bankers and dealers is hammering sales at upmarket Sloane Square department store Peter Jones...Last week, according to new figures released by the company, sales were down more than 19%. Over the first seven weeks of the group's new financial year sales at the store, which recently had a £100m refit, have been down 11% on last year's levels...The store is in the heart of Kensington and Chelsea. It is the wealthiest residential area in the UK and home to thousands of City workers and West End-based hedge fund managers. The John Lewis department store chain [is] regarded as a bellwether for the retail sector."

Yikes! Sounds like the rich boy's wives are getting their credit cards cut up. Hardly surprising the top end of the market is getting hurt first, given the speed of layoffs in the City. I fully expect it to filter down through the rest of the economy pretty quickly.

Over in the housing sector, the public are pretty quickly coming round to the idea that the end is nigh. On the front cover of every London commuters favourite morning read, The Metro, was splashed "Britain faces worse housing crash than US". While the story didn't particularly have any pressing details, the fact that UK household debt is running at 175 per cent of disposable income, compared with only 128 per cent in the States, suggests the headline could be right (although personally I think the recourse lending here will stop the UK falling as hard as the US, as I point the finger at the crazy non-recourse nature of most mortgages out there for the speed and depth of the crash). It will certainly add to the reports on the BBC News every night this week talking about mortgage lenders withdrawing a significant number of their mortgage offerings, and anecdotal evidence points to rates being priced such that no-one will take them up on them. Sounds like the banks are about a year late to deal with the problem, and even today you can still find 95% mortgages (have a browse at www.moneysupermarket.com to see rates, although I believe it's getting difficult to actually get them).

Elsewhere, the top dogs of the 5 biggest banks are meeting Mervyn King, BoE governor, today, begging for more money. Well, they've already had £10bn this week, how much more do they need? Well savers (like me) can expect another kick in the teeth pretty soon, as 2 of the 9 on the Bank of England MPC voted to cut rates at the last meeting, so I fully expect they'll be cutting by the next one, as the general economic newsflow is only going to get worse, as is the housing market (inflation is creeping up, but central bankers don't seem fussed about that these days).

And finally, and probably the reason that FTSE futures were off so much early this morning, one of London's leading brokers, is raising margin limits dramatically:

MF Global informed clients yesterday that the "margin" on contract for differences (CFDs) was increasing on certain stocks from 25pc to 90pc. The clients have been given until this morning to put up the extra cash or close positions.

Looks like leverage continues to be unwound with great speed.