The end of the beginning?

This made me laugh on my long train journey this morning. The FT’s Lex columnist muses on the shortest recession in history:

The end of the recession is nigh, at least if you believe investment banks. Merrill Lynch talks of a “three-dimensional recovery”; Deutsche Bank says “spring is in the air”; and JPMorgan believes “the end of the Great Recession is approaching”. Sentiment has turned on the thinnest of collateralised debt obligation tranches. At the start of the year, there was talk of a Great Depression. By March, that had become the End of the World. In April, however, the global economy faced merely a stiff recession. May has now ushered forth expectations of a self-sustaining recovery. At this rate, the boom will be back by summer.

If so, the “worst” global recession since the 1930s will have been a very short one.


Boosterish and self-serving recommendations need to be taken with a pinch of salt. Lending remains weak as banks that have yet to purge their balance sheets of toxic assets try to shrink their way back to health. Unemployment is rising. And house prices, the biggest asset class of all, have in many countries, including the UK, not yet stabilised.

True enough, but there has at last been some good news after months of the headlines getting worse each day.

I have no idea whether this is a false dawn and, given their failure to predict the crash, I don’t give much credence to the views of the experts. I can only judge from my own experience and, from what I have seen and heard, there does seem to have been a change of mood in the past few weeks.

For the first three months of this year, energy levels felt low in most of the organisations that my colleagues and I dealt with. After Christmas there is always a lull as people crawl back to work after their breaks. For the first couple of weeks in January, many organisations feel like mothballed power stations where the generators have to slowly gather momentum before they can run at full capacity again. It takes until the middle of the month for people to regain the energy they had before Christmas. This year, though, it was different. The post-Christmas dip lasted until the end of March.

Then, sometime in the middle of April, it was as if London woke up. Suddenly, companies and public sector organisations are starting new projects again. Admittedly some of this is re-organisation and cost reduction but at least business leaders are doing something decisive instead of sitting slumped in their offices waiting to see what’s going to happen. It’s almost as if people have thought, “Sod it, I’m sick of sitting here worrying, I’ve got to start doing something.”

And it’s not just me. Other people I know have noticed an increase in activity too. Before Christmas, my wife took voluntary redundancy. The job market was stagnant until the last week in April then suddenly she started getting calls from headhunters and interim agencies. This week the phone has been buzzing.

OK, all this is anecdotal and it may all fizzle out again with the next round of bad news. But recessions are, to a large extent, psychological phenomena. If people start feeling more positive and energetic it can only help.

I know it’s a cliche to quote Winston Churchill but I’m going to do it anyway:

This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

Well, let’s hope so anyway.

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1 Response to The end of the beginning?

  1. Wolfie says:

    We’re hiring, so you can add that anecdote to your list.

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