The green shoot index went through the roof last week as economists forecast a v-shaped, trampoline recovery. They based their findings on figures from the OECD that suggested the economies of developed nations – excluding America and Britain – were showing signs of life. Or rather that they were showing signs of dying a little more slowly than had previously been forecast. Seasonally adjusted, this meant that the pushing-up-the-daisies index was in negative territory for the first time since a little while ago.
Or to put it in more statistically meaningful terms, the green shoots were growing backwards at a slower rate than they had been only last month. The world rejoiced at the news. Stock markets leapt and politicians turned to their expense accounts in relief. The mortgage lenders announced that the housing slump had been a sampling error and that house prices had actually been rising, credibility-adjusted, all along. The largest leap in unemployment in Britain for nearly thirty years was dismissed as a lagging indicator that could be discounted on the upside.
But the trampoline recovery was to be short lived. By mid week the killjoy Bank of England warned that the v-shape leap would likely be followed by a head-down slump as the economy bounced off the trampoline altogether and landed in the flower beds. In Britain the debt overhang, and the under-hang of bankers on lampposts, meant that there would not be sufficient finance for a v-shaped bounce to become a self-sustaining orbital high. The British financial services sector has given up on the real economy in order to focus on its core function, which is to deliver bonuses for bankers.
The Bank’s governor Mervyn King, warned that Britain could face the worst slump since the depression, or it might not. He unveiled a new fan shaped recovery graph which showed that, seasonally adjusted, the economy could grow a lot in the medium term or it could shrink a lot in the medium term, but that either way it would be bad for the brown-trouser index.
Shareholders rushed for the exit as the footsie stumbled over itself and fell headlong onto the downside. The Baltic Dry shipping index was soaked by renewed sentiment. Confidence in bank stocks rose on a counterintuitive anti-bear bull rally as hedge funds liquidated short positions in a profit-taking pause for breath.
Green shoots ended the week on a low high when Ladbrokes, the betting agency, announced that punters had got lucky in March. Bookie profits had been left standing when Mon Mome won the grand national on 100/1. Alistair Darling said that he intended to scrap the treasury in future and start putting the public finances on a Dundee Shuffle at Aintree since that was more reliable indicator than a statistically meaningful sample of economic forecasters.