This year marks the centenary of an early classic of American finance: Fifty Years on Wall Street, by Henry Clews, a self-made speculative tycoon turned éminence grise. It is bookended by calamities. Clews first strolled the street during the Western Blizzard of 1857, when stock prices halved in a few days thanks to a crisis of confidence over the terms of trade; his 1000-page reminiscence closes with the Bankers' Panic of 1907, following the downfall of the Knickerbocker Trust Company and the near-bankruptcy of New York City.

Clews' tone when describing the latter scapegrace is disarmingly optimistic - he sounds, in fact, almost relieved. He had, it transpired, been fretting about the economy for some time: investors had been glutted with "watered" stock of dubious value; financial maladministration and price manipulation had become the New York Stock Exchange's predominant ends. Clews considers it a splendid development that the "outside public have lost the faith that they had in many of the stock-market leaders, the men who were once followed blindly in their schemes of inflation and regarded as omnipotent in their execution". Awareness of the depths of Wall Street's decadence, he concludes, will be entirely therapeutic.

The revelations of fraud, chicanery and excessive capitalisation that have been made in the courts and elsewhere, have undeceived even the dullest and most credulous believers in the schemes and schemers that took the country by storm in the days of Wall Street's wild and pyrotechnical speculation. Out of evil cometh good, and this change from blind credulity and inordinate inflation to discriminating distrust and severe contraction has exerted a wholesome effect in paving the way to a sounder, safer and generally better state of things both in and out of Wall Street.

A wealthy man, of course, can afford high-sounding sentiments. But Clews had some personal experience of the "wholesome effects" he foresaw: his reputation as the Sage of Wall Street derived partly from his having bounced back after personal ruin in the Credit Mobilier scandal of 1873. And surely part of the disbelief and dread accompanying the current sub-prime crisis has been the sheer unfamiliarity of a general broad-based bear market, from which no asset class appears immune.

The inauguration of the modern gilded age is usually dated, inauspiciously, to a Friday the thirteenth, in August 1982, when the US Federal Reserve cut short-term interest rates by 0.5%. The Dow Jones Industrial Average had closed the previous evening at 776.92; in October last year, it peaked at 14,163.53. There have been shocks between times: endogenous, like Black Monday, in October 1987, and the puncturing of the Internet Bubble, in April 2000; and exogenous, like the first Gulf War and September 11. But to have tangible experience of a certifiable financial crisis, you need to have been a market professional for more than a quarter-century - and how many of those are there in the neophilial securities industry?

The foreboding was evinced by the first and most pointless response to September's turmoil: the sudden draconian restrictions on short selling; that is, investing in such a way as to profit from the market falling. It was as though pessimism itself could be forbidden, or at least that it should not be permitted to lead on to profit. A generally rising equity market has become so integral to the backdrop of capitalism that a long-term dislocation seems to imperil the whole project; to bet against it bordered on the treasonable.