Thursday, 11 June 2009

Dead Cats a Bouncing?

Pound at its strongest against the Euro since start of 2009, signs in some latest surveys that the economy grew (fractionally) in March and April, and Ronaldo being transferred for a champagne popping £80 million from Man U to Real Madrid - signs that the recession is all but over?

Well that was quick wasn't it?

Not quite.

Green shoots are sprouting everywhere but some reasons to be suspicious:

1. London is suffering the second day of a tube strike induced by members of the RMT union who are demanding a gravity defying 5% pay rise. 1970s all over again?

2. The West Bromwich Building Society (Britain's 8th biggest) looks set to be rescued within days by the Bank of England - the latest failed institution which dabbled a little too far into the black arts of property speculation at the height of the boom.

3. I have just come back from a property seminar day and talk within the commercial property sector remains of a protracted slump as the Bank's continue to rescure their battered balance sheets and sleep walk into a "lost decade".

So to be gloomy or optimistic?

Well, we look set for a few months of growth at least, but the V shaped recession looks ever more likely to be a W come the Autumn. Then many commentators are expecting inflation, or worse stagflation, to see us into a double dip. As for industries dependent on debt (for which read commercial property) only rights issues will get more liquidity in the market anytime soon.

The classic dead cat bounce.

Don't take my word for it - a Noble Laureate is saying just this today too glancing across at other countries ongoing dismal economic news - not good for British exporters at a time when the pound is on rebound:

Oh, and as for a residential property recovery - personally I am not believing a word of it. The long term trend has to be further falls come late Autumn and Winter.

Monday, 1 June 2009


June 1st - flaming June and the advent of Summer.

It's been a while since I last posted and much to muse upon this warm, sunny eve:

1. The feverish condemnation and public humiliation of bankers everywhere, once April gave way to May turned into the public hanging of politicians of all colours in the MP's expenses (actually an allowance) scandal. At time of writing, the Chancellor looks to be hanging on to his job by a thread for claiming for service charges on a flat whilst enjoying grace and favour accommodation at No.11. Behind the duck ponds, moats, first home "flipping" and all the other tittle-tattle from this affair, one can but assume it is all but a facade for everyone to hide behind. Times are now tough and people have been caught out - sucked in as they were to the illusion of an endless age of riches. Now someone has to take the flack. But in blaming others for their greed, people avert their eyes from the mirror.

2. Britain's Got Talent has just ended and Big Brother, that ceaseless looking glass into the lives of Z-list Summer-long Celebs starts on Thursday. The former has highlighted real talent, the latter is full of wishful wannabees who can't make the former. Time to turn off that TV - the sun is shining.

3. If the expenses scandal and reality TV has not distracted the population too much they can vote on Thursday in the Euro Elections. There is lots to vote about at the moment, lets hope they do! Much to blog about later this week.