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01 March 2010 |
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators in the media. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor.
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators in the media. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor. Justin provides financial advice to clients of Kester Cunningham John Financial Planning LLP.
As the figures come through and the runes are cast by the legions of experts and economists, there seems to be a discernable trend developing. The politicians of all colours are telling us, and will continue to do so until we finally have an election, that they have the perfect plan to lead us from the 'slough of despond' to the sunny uplands of economic success and safety. Here we will find lush fresh green verdant fields of economic success; sadly however I think we can increasingly see that such optimism may well be illusory if not intentionally misplaced.
In all likelihood it looks as though we are going to be seeing an extended period of time with the image of a flat peat bog rather than sunny upland. Damp, soggy and difficult to get through it may be, but probably no more than we deserve after the recklessness of the past few decades.
So maybe this era may be known as the 'Big Sag' where, following the globe's largest economic stimulus in history, we could find ourselves sagging back into a duller period of lacklustre growth, weak supply of cash and capital, and a sour deflationary air.
Despite some stupid politicians still shouting to the contrary, we are not going back to the way things were before the financial crash. This, in spite of sounding so gloomy, does not mean that we have to go through a 1930's style Depression, but rather an extended period of lower, slower, growth. This of course will not be uniform as the national economies will be affected in different ways.
For the West and Japan or the post development nations, there is a need for the private sector to be reignited into action and investment, and especially as governments find themselves unable to sustain their expenditure and will be mired in debt for years to come. This revitalisation of the private sector will rely upon two factors in particular; firstly a willingness (with positive tax breaks) to invest in the first place and secondly a banking system capable of supplying the blood flow that is so vital. These are two areas where our government, both pre and post election could take some very decisive actions, but sadly to date show little sign of understanding, appreciation or intention.
Last week's US consumer confidence figures were truly awful, and in a nation which is so consumer dependent, not a good sign for any sustained recovery |
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