Not gloomy enough
Back in January I went to a seminar organised by Société Générale featuring talks by long-time bears (or common sense thinkers – depends how you look at it) Albert Edwards and Dylan Grice. It was headlined “2012: The Final Year of Pain and Disappointment”.
We can’t yet be sure if they are to be right about the final year bit. But they were bang on with the pain and disappointment bit. For the first few months of the year it looked like we might get a relatively relaxed spring. Europe was quiet; America was growing; China looked stable; and even the Japanese market was soaring.
Not any more. Now Greece is in meltdown with Spain not far behind. There is a growing consensus that the eurozone will soon split – the Treasury, the Bank of England and the FSA have even been talking about how to deal with a Greek departure and DeLaRue is refusing to comment on whether it is or is not designing new drachma notes.
At the same time, the one-time saviours of the economic world are turning out to be just as sensitive to crisis and slowdown as the rest of us. In India, investment is falling; inflation is back into double digits; the public deficit is high (5.8% of GDP); industrial output actually fell 3.5% in March; and overall GDP growth is down to around 6%.
• Read the full editor’s letter here: Not gloomy enough.