A General Motors executive once said that he thought “what was good for the country was good for General Motors and vice versa”. Does it follow that the US as a whole would benefit from the robust treatment now being handed out to GM?

It does not look as though the market sees it that way. The midnight news that the US government would not extend GM and Chrysler the $21.6bn in funds that they were requesting and would instead give them a tight deadline to avoid bankruptcy brought a sharp end to the March rally.

At mid-session in New York, US stocks were down 6 per cent from their peak last week. Commodities, as measured by the Dow Jones-AIG index, were also down about 6 per cent after their recent rally. Emerging markets did worse. Volatility rose, as did the dollar.