Tuesday, 14 April 2009

Dollar traps and thaw

Snow has almost gone now and stockmarkets rally - in some places. But does this mean that the global economic outlook is also improving? Traders have always had a great capacity for turning gloomy depressison into exalted optimism (and back) in the course of minutes. Journalists are quick to follow suit. But mania does not mean that danger is over. Admittedly the pre-easter G20 did emit positive sounds but as Krugman suggests in "China's dollar trap", "... the crisis probably still has years to run".
Could it be that the Winter God's finger in all this is less significant than assumed and that the corellation between frost and recession is overstated?
This really needs to be discussed with this Italian scientist who established the link between camping trips and earthquakes.

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