Let’s talk us into recession.

Applying any kind of critical thought to the optimistic fluff churned out by a lot of senior business people and their PRs at the moment is, it seems, tantamount to treason. As such, I’ve been told off/whinged at a couple of times in the last fortnight for contributing to the mysterious art of “talking us into recession”.

This is something that really gets up my nose. It’s a comment often levelled at journalists by evil capitalist sorts who are worried about losing a few quid as the value of their investment portfolio plummets. I take it as a compliment that they think I have any more of an impact on the fate of the global economy than my nephew’s late hamster, Nibbles. Which, of course, I don’t.

The reason the economy appears, quite suddenly, to be going down the toilet is nothing to do with journalists writing stuff. It’s to do with the actions of the people who engage in any sense with the global economy - i.e. just about everyone in the Western world and many of the remaining occupants of the planet as well. It’s like a massive ecosystem that follows its own rules based on the group mentality of billions of people.

Journalists, in contrast, are routinely ignored and/or hated and, except for a very few, have next to no grasp of the complexities of the global financial markets. What they say makes sod-all difference and only the paranoid or desperate would claim otherwise.

If anything, the media are guilty of glossing over trouble by serving up the friendly euphemisms fed to them by investment bankers (insert your own rhyming slang gag here). Just as weather forecasters describe a week of heavy rain as “unsettled conditions”, I’m getting tired of reading that the stock market is “volatile”. That word indicates some sort of fluctuation when, in fact, stocks have been going only one way since the start of the year, and that’s very sharply down.

So, I hearby predict the economy is about to fall over a cliff and we all may possibly die. Two events yesterday have sealed our fate. The first is the government deciding to bail out Northern Rock to the tune of £55bn. As Anatole Kaletsky wrote in an excellent, searing piece in the Times yesterday:

The Northern Rock bailout will demolish or, at best, discredit the entire economic policy framework created in 1997. Since the creation of this framework was his one unquestionable achievement, it seems fair to say that Mr Brown’s career as a serious politician ended yesterday.

The second is the US Federal Reserve’s decision to cut interest rates by 0.75%, which had the effect of propping up the stock market brilliantly… for about four hours. The FTSE 100 finished today down by 131 points, or -2.2%, completely wiping out yesterday’s gains. As I type, the Dow Jones is currently almost 300 points down, having lost 2.5% of its value so far today. All in all, then, a complete waste of time.

So, that being said, I’m off to sell my shares - and I suggest you do the same. QUICK!

Share / Save