After nearly two years of financial and economic mayhem, this will be a year of a steadily improving economy. Incredibly, over the last nine months, the stock market has recorded the third biggest rise since 1693, according to the Bank of England, and if it carries on rising just a little more in January it will be the biggest sustained rise for 317 years. A stock market cannot jump on this scale and with this ferocity without matters quickly improving on the ground.
Amazing, innit? When stock markets don\’t predict what Will Hutton thinks will or should happen then the Efficient Markets Hypothesis is shown the door. Can\’t be true because it doesn\’t predict what I want to happen.
When markets predict what Will would like to happen then they\’re clear eyed prognosticators of the future.
Consistency, only for the little people.
Brilliant :the Stock Exchange where secondhand shares are sold at inflated prices is treated with exagerrated importance as per usual.Stock market indices are no more important than turnover figures for the large commercial bookmakers.Not as important as average wage levels in relation to average house prices and rents (The Henry George index,[not real I’ve just invented it].)
Again, I think he is saying that it will lead or contribute to a recovery, not predict it.
I think you misunderstand the Efficient Markets Hypothesis. It is not to do with markets’ ability to predict the future trajectory of the economy.
Oh for God’s sake. Interest rates at an all-time low, bond yields depressed, no liquidity in housing markets, of course the bloody commodity and equity markets are booming. It doesn’t *mean* anything.
I always understood the market was a forward looking index, something like 12 to 18 months. At least that’s what we were told in the 80’s.
A rise like that does seem t too good to be true, it might be time to switch the pensions in to cash funds.