News from the habitually miserable UK economy has been really rather better of late.
Indeed we are rather chipper about the outlook.
Hence I do not give a jot about Jimmy Carr’s tax returns nor really that NatWest’s ability to upgrade software is on a par with my own.
That’s because the cheap dosh for lending plan should feed through into lower mortgage rates quite quickly and should provide liquidity for the crucial SME part of the economy.
And we all tend to forget that when cycles turn, they create their own momentum.
Greater investment leads to higher employment, which in turn supports consumer expenditure and house prices. This in turn drives confidence and greater investment.
We will see the size of the state shrink across the developed worlds as over-leveraged governments retrench. The slack will eventually be taken up by the private sectors and a new cycle of growth will emerge.
Financial markets have priced equities and bonds for utter misery for decades to come.
Yet we said very purposefully in January that 2012 would be a year in which portfolios should produce much better returns. We remain absolutely adamant that will be proved to be right, primarily because asset prices are predicting a significantly worse economic scenario than we still think will happen.
Markets will eventually move on from their obsession with European debt and maybe are already doing so. Last year’s low point for the FTSE 100 was roughly four per cent above 2010’s, while May’s trough was around five per cent above 2011’s.
In a Met Office-tastic way, the lows are getting higher.
The best news from the past week has been Walgreen’s investment in Boots.
It is a big deal, rather than mega, but shows that companies, both public and private, have an awful lot of cash in the bank earning nothing that can easily be put to much better use, if only management and shareholders have the courage to do so.
Walgreen’s move proves there are still some proper investors around. There is hope left in the world.
It should be only a matter of time until a merger and acquisition cycle kicks off; all the ingredients are in place, it is just the criadillas that are missing.
* Jim Wood-Smith is head of investment research at Williams de Broe