22 May 2013

Here we go again? FTSE 100 hits high

Last night I found myself declaring that the London Stock Exchange had hit a height unseen since 1999. Last night I found myself declaring that this level was the fifth highest in history. Last night a pensioner tweeted that finally pension funds were going to find some market succour.

 

Not for the first time I find myself wishing that I had secured a higher economics A level result than an E (don’t knock it – it’s a pass – and followed a year of hard graft at Scarborough tech!). Indeed ever since the 2008 financial meltdown my day has started with a spirited perusal of the FT. Over time, my understanding of this strange non- manufacturing world has expanded.

When I began in journalism, my life was about east versus west, and left versus right. Now it seems to require an evaluation of right versus wrong.

This morning my FT tells me that the biggest name in worldwide banking – Jamie Dimon – has seen off a shareholder revolt and retained his position as chairman of JPMorgan. This is the bank that lost $6bn of its investors’ and savers’ money in London in a scandal identified as “the whale”.

More from Channel 4 News: Rising stock market still has ‘some way to run’

Let’s not go there right now, Jonah didn’t tell us much about whales, and I’m not sure we’d learn any more by investigating this one. It’s apparently dead, although its consequences live on.

Last week the US regulatory authorities stated that they were concerned about some “aspects of current lending”, which they described as “risky”.

Of late I have mentioned to several of my financial contacts that, even from my position of relative ignorance, I fear I am seeing a number of the same ingredients we saw in 2008 back in play. They have not disagreed. I’m just hoping that the zooming stock market is not one of them.

But then one thing that my economics A level lecturer, Mr Thomas (a part-time long distance truck driver to augment his income) did teach me, was that “hope” was not a good word when it came to the study of economics.

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12 reader comments

  1. Phil Dener says:

    You are right. QE is driving the markets and there is no real market in capital: the central banks are driving everyting to protect sovereigns and the banking system. Productive economies and the people in them are having to take the hits. This is not sustainable and the coming collapse is likely to be worse than tha last. Just imagine what happens when the BoE has to raise rates to protect the GBP if it starts to fall to levels which would fuel runaway inflation!

  2. Patrick Pending says:

    Just as well C4 news has the superb and very capable economics editor Islam Fasal to help you out on the tricky stuff……

  3. Peter Whipp says:

    Isn’t it now about 1% versus 99%?

  4. mathtimms says:

    … bad luck ! I got a D & went on to study it at University level …[these days everyone gets A’s or A* [but I promise you children are no more intelligent than we were !], thanks for your ”News” all at C4…

  5. mathtimms says:

    I don’t believe there is much ”good” in masses of money being tied up in the stock market or in stockbrokers pockets[or vaults]…

  6. mathtimms says:

    I ”hope” some people will become less GREEDY … but realistically laws will have to be introduced to curb voracious appetites for money….

  7. w g galbraith says:

    Ah, I see why you got an E, Jon. You see, financial meltdown doesn’t matter in the least. In fact it’s good for everybody. Keeps us on our toes. And we can all watch the bankers get their bonuses no matter what. And after all, they’re the only ones that really matter. Aren’t they? Now, if you’d realized that you would have got a Z, like me…

  8. Philip says:

    Part of the problem is that the financial gamblers in the City have to shop around to where they can make the most money. Shares appear to be one of the more lucrative areas at the moment. The problem is that few people really know whether the valuations placed on companies by current stock market prices reflect their real value or not – because an element of this is sheer gambling (cf 2005-8). Some of it is because bond yields are less attractive and QE has pumped vast amounts of money into the economy. It was supposed to “trickle down” – heard that one before? – to business investment, but in practice it’s just sat in banks’ and companies coffers. The banks needed to recapitalise anyway & companies aren’t investing because they can’t see stable growth in the UK economy because of the Government’s 1930s style austerity voodoo economics. So with all that cash sitting around in their accounts, they also look quite healthy – hence the stock market gambling. But how many of these companies whose share prices are rising are what Faisal Islam calles “zombie companies”?

  9. Oli says:

    In reality nothing actually changed after the 2008 crisis. The government made a lot of noise about tougher regulation and taking on the city but haven’t really done anything at all. Many commentators pointed this out at the time and expressed concern that another major crisis in a few years would be inevitable. It is however quite difficult for the government because these days it would not be that difficult for a bank to transfer all their business to another country if regulation became too tough in the UK. This would have fairly devastating short term consequences for the economy. We’ve got to an unhealthy situation whereby the country depends on the banks but the banks don’t depend on the country. I think we perhaps need some fundamental changes to the way our society is structured with regard to the financial system.

  10. margaret brandreth-jones says:

    I don’t suspect we will ever see the same comfort with lending again. Risky lending will be taboo, however with a recovery and years in between to dampen memory of this antiquated age laxity may slip in again.

  11. amari blaize says:

    Oh pleeeeeeeeese, I’ve got a headache. As a pensioner grappling with this whole murky world, I’m trying to understand the gobbledegook coming from ‘financial advisers’ – rip off merchants, everyone – on annuities…a veritable nightmare. Now that I have waded through their obfuscating sludge, I’ll do it myself before dementia sets in, and I don’t even have an F in economics.

  12. ANON says:

    Wish I understood how a man who oversaw a loss of 6 billion retains his position?. But is it not true that very often the bright ones are not promoted. So often their thinking causes discomfort amongst established policy makers..

    How often does the innovative and insightful thinker get ignored. It is difficult though as quite often ” innovation” is not based on sound principle but on headstrong and loud mouthed .publicity seekers.

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