Each week we get bombarded with figures and indicators of business confidence and growth predictions. Some figures are looking at actual data and we try to make reasoned guesses as to what they mean for the future - 'past performance doesn't indicate future performance' is something the financial markets know about but often keep in their small print! Then there are the figures that are based entirely on what different groups think might happen. Different professions, different industries and different market sectors all seem to take great pleasure in announcing the best or the worst set of figures in so many years just so they can grab the headlines for themselves.
Just as no swallow ever makes a spring, no set of figures can be relied on to predict anything with any confidence. It could be said that the stock markets of the world are the ultimate arbiters of economic predictions since they build in assumptions on growth. But is this reasonable? Do the stock markets really represent the economic outlooks of the countries they reside in? Just how does the recent series of rises in stock markets around the world to levels not seen in years really tally with economic reality? The very real danger is that those involved in the world of buying and selling of stocks and shares are getting themselves into another groupthink situation and we could all be in for another reality check - after all, they do seem to happen every few years don't they.
No comments:
Post a Comment