Over the past couple of days we have seen the press pack reporting on the financial situations both in Europe and America in quite dark terms. There have been stories of the difficulties faced by Italy and Spain and how the cost of their borrowing has risen and the damage that is potential being done to the whole of the Euro zone. We have seen the reports coming from America on the hammering that the financial markets have taken over the last few days. What is interesting from my point of view as an external observer of the financial sector - I try to avoid having any direct contact with it - is that the markets tend to respond to media speculation just as much as to trader speculation. My concern is that we seem to have a disconnect between the reporting of the situation and the reality of the situation.
I think it is pretty clear to most observers that we are still in the depths of a financial crisis and will be for at least the next five years. Our situation is precarious and the measures that are currently being taken by our political leaders are at best applying a sticking plaster to a gaping wound. The banks are all in trouble and are pulling in their horns, companies are extremely wary of increasing much needed investment. The consumer marketplace is significantly compromised by the reduction in available credit and by the reduction in disposable income, and the level of confidence throughout the system is low. This situation has not changed radically in the last two years, nor is it likely to significantly change, and yet we have a media reporting the current round of difficulties as though they were earth shattering news.
I understand that there is a need within the media industry to sell papers and television advertising slots, and that the reporting of "news" plays second fiddle to scaremongering and hyperbole. It was ever thus, but I feel that in the current climate some level of restraint would perhaps be a better way forward. A frank and open policy of reporting and open-ness from our political and industrial leaders would allow for a more constructive approach to seeking resolutions to the problems that we face, rather than rushing headlong into panic and the poor quality of decisions that that mindset invariably brings.......
I think it is pretty clear to most observers that we are still in the depths of a financial crisis and will be for at least the next five years. Our situation is precarious and the measures that are currently being taken by our political leaders are at best applying a sticking plaster to a gaping wound. The banks are all in trouble and are pulling in their horns, companies are extremely wary of increasing much needed investment. The consumer marketplace is significantly compromised by the reduction in available credit and by the reduction in disposable income, and the level of confidence throughout the system is low. This situation has not changed radically in the last two years, nor is it likely to significantly change, and yet we have a media reporting the current round of difficulties as though they were earth shattering news.
I understand that there is a need within the media industry to sell papers and television advertising slots, and that the reporting of "news" plays second fiddle to scaremongering and hyperbole. It was ever thus, but I feel that in the current climate some level of restraint would perhaps be a better way forward. A frank and open policy of reporting and open-ness from our political and industrial leaders would allow for a more constructive approach to seeking resolutions to the problems that we face, rather than rushing headlong into panic and the poor quality of decisions that that mindset invariably brings.......
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