These are nervous times for the securities industry. The way things are shaping up in the markets, fourth quarter earnings for the big investment banks are likely to include some nasty surprises.

The shake-out in telecoms and other technology stocks has wiped hundreds of billions off the market capitalisation of the TMT sector. Nasdaq has fallen by about two-fifths from its March peak and there may be worse to come. A string of profit warnings has been emerging from the US. Meanwhile, the credit markets are in a funk, with high-yield telecoms and technology issues the worst hit. Oil prices have been rising. And the risk of war in the Middle East is adding to the nervousness.