Margareta Pagano: Financial experts are eating humble pie – as well as cheap risotto

In these frugal days, buying Tesco's mushroom risotto for £1.99 rather than paying double at Marks & Spencer looks a good deal. Even the better-off are now going to cheaper shops to save on food now that petrol costs as much as gold. It's this change in behaviour that is hurting Marks & Spencer so badly and which prompted last week's profit warning. And it's why Sir Stuart Rose is going to have to pull off the performance of his life when he appears at the Royal Festival Hall this Wednesday.

Sir Stuart is used to being a star but he will have to be more a penitent choirboy to convince the 2,000 or so shareholders who will be at the annual meeting to confirm his appointment as chairman and chief executive. Four of the retailer's biggest investors are still threatening to vote against him taking the dual crown. While they are unlikely to muster a big enough majority to overturn the board's recommendation, their disapproval leaves a nasty taste. Sir Stuart will find it easier to persuade his adoring army of smaller investors that he's still up to the job, but I suspect even they will want a better answer to why their shares have now collapsed to 227p.

Sir Stuart must say whether he was caught napping and simply didn't react fast enough to the new attitude among his customers. If this is not the case, the alternative can only be that the downturn has happened so unexpectedly that the stores were not able to switch to cheaper products. Neither scenario properly explains the sudden sacking of his food guru, Steve Esom, who was being groomed as one of his potential successors. It also looks rather brutal, selfish even.

But Sir Stuart was not the only UK boss to find himself in the harsh glare of the spotlight last week, and there will be more bloodletting over the months to come. Others who have been exposed include Sly Bailey of Trinity Mirror, who was also forced to issue a profits warning; Peter Redfern of Taylor Wimpey, who is still trying to put together a rescue; Mark Clare of Barratt; and Rod Kent of Bradford & Bingley, who has now launched his third rescue package.

Some of these must take the blame for reckless strategies – at Trinity Mirror where Bailey spent cash on share buybacks, and at Bradford & Bingley where management chased buy-to-let customers at the top of the cycle. Others, though, such as the housebuilders, are more the victims of the credit crunch and the collapse of lending by the big banks to the corporate sector.

The most astonishing thing about last week's horrors in the equity markets is that it has taken so many of the cleverest market pundits so long to cotton on to what has really been happening to corporate Britain. Even a few months ago, some of our top financial experts were still suggesting that the credit crunch was not going to hit the "real economy" – that the banking crisis was a separate liquidity issue. But finally they have woken up, driving down the FTSE 100 last week into technical bear territory – a fall of 20 per cent from its peak last summer.

One analyst who did see as early as last October how bad things were going to get was Lorna Tilbian of Numis, one of the City's brightest. Back then Tilbian was warning that most of the UK's media companies were going to get caught out by lower advertising revenues as the cycle turned down. Mind you, this doesn't make Tilbian feel particularly pleased with herself – more like one of le tricoteuse, the women who knitted by the guillotine during the French Revolution. She predicts many more companies will crash, and more heads will roll.

Yell, or the Yellow Submarine as she dubs it, is one that looks really precarious with £3.8bn of debt (it's worth £500m), and even ITV is looking rather weak. As Tilbian says, there is no magic wand that will wipe out the debt which has been piled high over the past few years of boom. After a bull market that has lasted the best part of 15 years, we are entering totally new territory. There will be some technical rallies – some are predicting that we will see a bounceback over the next few weeks. But looking further ahead, we are in for at least two years of harder times.

Sovereign wealth funds of our own, as championed by the odd couple

Nicolas Sarkozy, the French President, and Labour's maverick MP, Frank Field, both share a new-found passion for sovereign wealth funds. Last week Sarkozy expressed his feelings when he announced that France's biggest financial institution, the Caisse des Dépôts et Consignations, which has assets of more than €400bn (£317bn), would become a sovereign fund, although republican fund might be more apt.

Sarkozy has yet to reveal more of his plans for the CDC, which is already one of the biggest investors in France, owning shares in about half of all the companies listed on the CAC index. But, in that wonderfully Chauvin way, he did suggest that the funds will be "used to promote the primordial economic interests of France". Whether they will be used for domestic investment only is not clear – primordial is quite a broad definition.

But if the funds were to be used for foreign investment, it would be a delicious volte-face. After all, it was only a few months ago that Sarkozy was ruminating about the dangers posed by the transfers of capital coming out of the Far East and Middle East sovereign funds, arguing that he would defend French companies against the foreign onslaught.

Frank Field has been more detailed in what he would like a British sovereign fund to do; unfortunately he doesn't have a CDC with which to do it. Field argues that the UK should set up a government fund to underpin a new pensions savings scheme. He wants to see an independent body rather like the Bank of England's Monetary Policy Committee, because as he wrote recently: "Pensions, underpinned by savings, must be universalised, and as no sensible person would ever trust the government with their savings, Britain's sovereign wealth fund must be at arm's length and clearly part of rebuilding civil society." This is not just a noble ambition but a really good idea.

As Labour rebuffed Field's earlier reforms, it's hard to imagine there is an appetite for his latest. But maybe it's one for the Tories – which have had many ideas stolen by the Treasury – to look into.

Why Delia is leaving Cullum out of her Norwich mix

What's the real recipe? With Marks and Spencer – and now Delia Smith in trouble – it's been an unsettling week for middle England. Delia's football team, Norwich City, is struggling in the Championship, so why is she refusing what appears to be a £20m offer to bankroll a promotion push from Peter Cullum, the billionaire chairman of Towergate, the UK's biggest privately owned insurance company? Cullum, Norwich born and bred, is passionate about the Canaries and says he wants to invest even though owning a football club will never make him money. But my sources tell me that Cullum's offer is not for the full £20m that he is promising. Apparently, Delia would prefer Andrew and Sharon Turner, who have a £275m fortune from their Central Trust personal finance business and who are on the board, to be the white knights for her yellow birds.