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Black September?


Storm clouds gathering? Being an optimist by nature, I like to think not, but this is that time of year

September is traditionally the month for an economic crisis, which is a lovely thought to return from a bank holiday with. Not just economic of course, but political too with 9/11 being a prime example

One particular day stands out. 16th September was the day of Lehman’s collapse and Black Wednesday in back in 1991. It was also the day of the Battle of Britain and is also my birthday…….

So why September? I sense it is because like so many thinks in life, economics (and war) are driven by a mix of sentiment and hard facts. Throughout the summer the mood is optimistic and cares can be shunted to one side, but sooner or later the darker side has to raise its ugly head

Simplistic? Maybe but often its the simple instincts that are the most significant. Take for instance the little reported (i’m struggling to find the link) news that businesses are paying pay loans at a faster rate than at any time for over 20 years or so. What do we conclude from that? Some might say its good news and quite right too that they are doing so, but it is in fact quite the opposite. What it suggests is that businesses have the cash (in some cases) but not the confidence to invest.

As I suggested, sentiment over facts.

As for the coming month? My punt is that that the markets have reacted strongly enough to the dithering in the eurozone and the issues in the US (of which Standard and Poor’s downgrading was the least significant) and with luck we will see some calm. Lets hope so

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