THERE'S a (probably) apocryphal story that the business page of one newspaper greeted the 1938 Munich agreement with the headline: 'Shares fall on peace fears.' Not quite as perverse as it sounds given the big beasts of the stock market in those days included the likes of Vickers Armstrong, a major player in the world of armaments.
But what are we to make of last week, when 'fears' of a US recovery sent shares skidding? American jobs data and inflation rate pointed to an upswing across the Atlantic, and markets fell out of bed.
What is going on?
Simply this. The better the US (and British) economies perform, the sooner the powerful 'quantitative easing' drug will be taken away. This is the process whereby central banks create money out of thin air and use it to buy assets, usually the bonds issued by that country's government (convenient, huh?).
In our case, £375 billion of this new money has been created. Now the fear is that this massive stimulus is the only thing keeping the economy afloat and that any signs of a recovery mean the prescription will be cancelled.
If this sounds ludicrously the wrong way round, that is because it is. Trevor Williams, senior economist at Lloyds Bank Commercial, sounded a note of sanity. 'It is a little strange for investors to treat good news in this way. After all, economic recovery is what these stimulus programmes are for.'
Unless, of course, they are taking the view that the medicine and the recovery are tightly meshed together and that the 'recovery' is really nothing of the sort, merely a reaction to a massive stimulus. Maybe those clattering share prices are trying to tell us something.
1) Now we are ninety
ALWYN W. Turner's new book A Classless Society: Britain in the Nineties (Aurum; £25) is due to be published during the next few days. I caught up with the great man in London yesterday and took delivery of a copy. What a treat it promises to be.
I shall give you a full report when I have finished reading it, but one thing that struck me just browsing the photographs is how memory plays tricks. I could have sworn that The Darling Buds of May aired in the Eighties and that David Mellor's family line up, staged to show wife and children standing by him after a bout of amnesia concerning his marriage vows, was also an event of the previous decade.
Conversely, I had, until recently, always thought of Inspector Morse as the quintessential early Nineties television programme, beautifully filmed, well acted cerebral entertainment for those rather grim days at the start of the decade. Not true: the first series aired in January 1987 and the last in summer 1992, although there were some 'specials' later.
2) The way they were
AT the front of A Classless Society is a photograph of an impossibly-youthful John Major on his soapbox during the 1992 election, surrounded by supporters and opponents, at the back is a picture of a solitary Tony Blair on his campaign aircraft. The contrast is striking and had me thinking how traditional a figure was Major in contrast with what was to come.
I worked on a national newspaper at the time and followed current affairs quite closely, but I had no idea what television programmes he watched, nor see staged photos of him 'doing the school run'. I do not recall Major pretending to play computer games or to like the Arctic Monkeys (OK, Gordon Brown was apparently misquoted on this last point) or to follow keenly television talent shows.
From memory, here's what we knew. He was a cricket fanatic (as Attlee had been before him), he read Trollope, was interested in classical music and enjoyed gardening. That's it.
What a dignified contrast to the plausible young men who came after, the career politicians desperate to show their non-existent ordinariness with clunking references to football and popular culture. As the great lady said, you don't know what you've got 'til it's gone.
3) A pleasant (if hazy) memory
THE notion with which I started this post, that of a patient becoming over-fond of the medicine, reminded me a visit to the school medical officer when I was 15 to complain of a string of bad dreams that were giving me sleepless nights. This was obviously a little more interesting than the usual run of sports injuries and blatant attempts to get off games or lessons, and after consulting a pharmacopeia he prescribed some tablets, the name of which I cannot remember.
Somehow I worked out that were I to save up a week's-worth and take them all at once, I would experience a very, uh, pleasant feeling. Get high as a kite, in other words. Happy days/daze. I won't say it was a long time ago, but the Prime Minister's first name was Leonard, he had replaced a Prime Minister whose first name was James and the American president had been born Leslie Lynch King.
Trivia - don't you love it?
Thanks again for reading and enjoy the weekend.
dan.atkinson@live.co.uk
Going South: Why Britain Will Have A Third World Economy By 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan