What’s going on?
by Peter Switzer
At the moment the news is negative. While it’s not all negative, the negative is far more dramatic than the positive.
The latest bad news starred that way out and wacky North Korean leader Kim Jong-il who put his military on standby for combat following his armed forces identified as the being reason why a South Korean ship was sunk with the loss of 46 lives. This concerned investors yesterday, but reports have said since the country is not on military alert. However North Korea has moved to cut all ties with South Korea.
And the Bank of Spain took over a small, inconsequential bank — CajaSur a savings bank in Cordoba owned by the Catholic Church.
Spain wants small banks to merge with bigger banks but this one’s board said no and the Bank of Spain charged in.
- The Greek debt debacle,
- That damn volcano in Iceland.
- The Goldman Sachs allegations and charges.
- The US Administration’s push for more financial services regulations.
- And here we have had the resource super profits tax which has spooked foreign investors.
The end-result is investors are jumping at shadows and this will continue until there are some big, positive news shocks.
Over in America the economy keeps looking up. Economists had expected the S&P/Case-Shiller index of property values in 20 cities to register a strong rise, but it fell 0.5 per cent. However, the Conference Board said its consumer confidence index rose to 63.3 in May from 57.7 in April. It’s ironic but the US is showing jobs growth and consumers are becoming more positive but this steady improvement stuff can’t KO the bad news out of Europe in particular.
The time for economic leadership is crucial but at the moment Europe has a team of political pygmies running the show, the UK have a lame duck Coalition and what ever happened to that genius of a guy called Obama?
And let’s not talk about leadership at home. Thank God we’re linked solidly to China and we’re not carrying too much debt or we would be as badly placed as most economies in the world.
We’re in desperate need of a positive circuit breaker but I can’t see where that’s going to come from in the short-term.
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Published on: Wednesday, May 26, 2010blog comments powered by Disqus