All the great extravaganzas of the world, from the football and cricket World Cups to the New Orleans Mardi Gras, have one thing in common. Ever notice the crazy hats?

Surprising as some of these confections of felt, feathers and fleece are, it is more interesting to find out that much of this headgear with a sense of humour has in the last decade or so come from Nepal. Like the yeti, the crazy hat business in Nepal has a complex genealogy. Every second person in the industry claims to have hit upon the idea of making the silly things in this country. But Nepal's madhatters are endangered, as the Alices of the world stop dreaming.

Take, for instance, Aruna Tripathi of Freak Street, where mad hat-making is rumoured to have begun. Tripathi sits bored, far from amused by the creations she is surrounded by. "Things are not the same anymore," complains this pioneer of absurd millinery. "This business has suffered the same disease as every other industry in Nepal. Unhealthy competition started as soon as we started doing well." In the heyday of the hat, some eight years ago, Tripathi frequently received orders for as many as 8,000 hats. In peak season-the height of worldwide festivities, not tourism-she would make a profit of as much as 25 percent on a hat that on the streets of Kathmandu cost Rs 250.

Tripathi, who scoffs at suggestions that her triumph was, well, trumpery, recalls with the hint of a tear in her eye how she would pick the finest Chinese velvet in all manner of virulent colours from Khasa, and pair that with the lightest material and fastest dyes from India, to ensure the hats gave even the sweatiest football fan no trouble.

Tripathi's is one of just four or five such businesses left of the dozen the country was home to just a few years ago. One of the others is The Kathmandu Madhatter, a once-proud bastion of baroque absurdity. This was a flourishing company that used to receive bulk orders for at least 15- 20,000 hats at one go. Each of its 25 workers could make between Rs 400-Rs1,000 a day, depending on how nimble their fingers were. Says a bitter Rajendra Deuja, owner of the Madhatter, "The wholesale market is decreasing, and what's more, our business has been taken away by the cheaper labour and goods markets in India and China."

The Kathmandu Madhatter factory is a dismal sight now, with just a handful of workers listlessly stitching up the last of the small, 6,000-hat Christmas order. That this industry, which did stellar service to modernise Nepal's image internationally and lighten the lives of so many Nepalis, is dying out, is yet another reminder of the ephemeral nature of life and its laughs.