Green shoots notwithstanding, I begin to wonder if we have the collective strength to lever ourselves out of this mess. The experts have certainly started speaking of a recovery. Goldman Sachs has shown us again – that they have whatever it takes to survive ups and downs. The questions being asked now are about the shape of the recovery.
Certainly not the bang that we all hoped for. Sharp downturn, sharp upturn ‘V’ shaped recovery, it is not. Paul Krugman in an interview today spoke of a ‘W’ shaped recovery – where we see things get a bit worse before they get better. This is probably more realistic than the previous prediction of a long slow ‘U’ shaped recovery pattern. Just a little reminder – the letter is a combined letter – made of a ‘double U’ (not a combined V), the recovery too is likely to be the same.
There are signs of demand picking up in some sectors. Among other things that are seen as leading indicators such as real estate and gold, I tend to watch shipping rates. These have finally seen a bit of an upturn indicating a modest increase in international trade, albeit one way. The summer sales in the UK have been better than was feared. Demand data across the world sends mixed signals. China seems to be holding its end up. Investments are still largely government led – therefore a series of promises. Hope again rests on the BRIC countries.
For once, contrary to my instincts, I beleive that the answers to this tangle lies in the small picture. It is the time when we will have to depend on micro-projects, micro-finance and micro-entreprenuers to seize every mico-opportunity. This does not exclude the big players – but it does mean that they need to be able to spot the small gaps and opportunities that they would have ignored in better times. We live in times when we cannot afford to miss the smallest opportunity.
It is time for the Dunkirk strategy again. A flotilla of little ships to the rescue. And we survive to fight another day.