Tuesday, June 23, 2009
Even 'green shoots' wither on the vine
If you believe today's newspapers, the much-heralded 'green shoots' are dead amid "uncertain prospects for a global recovery" and "growing pessimism about the prospects for a global economic recovery".
This type of reporting is, quite frankly, nonsense. Stock markets have fallen 2%-3% because investors have been selling shares to profit from the recent market bounce. They haven't had many opportunities to make money in the last 12 months and so they are taking advantage now.
Nothing - repeat, nothing - about the global economic outlook has changed substantively in the last 24 hours.
As a former stock market reporter for a daily newspaper, I know only too well the pressure that financial journalists come under to conjure up sweeping explanations for significant market moves.
During the volatile months between the collapse of Northern Rock and the collapse of Lehman Brothers, I often ended up writing the"markets tumble because of fears about the global economy" story one day, only to be forced into writing the "markets soar on hopes that world can avoid recession" story the next day, when stock markers inevitably bounced back following the sharp dip.
It's a thankless task.