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Economic news round up

by Scott Bicheno on 27 January 2009, 10:25

Tags: Philips (AMS:PHIA), Siemens

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The search for the bottom

Meanwhile the "search for the bottom" continues. Double entendres aside, this is what is uppermost in everyone's mind: have things got as bad as they're going to get? Of course the bottom of the market can only be diagnosed once the ‘green shoots' of recovery are spotted.

While we're on the subject of economic metaphors, one more that will be used a lot concerns the shape of the recession. This is in reference to a graph of economic growth, which for the past few quarters will have been in steep decline.

Evenually this decline will level off and then start to rise again. A ‘V' shape in that graph indicates a swift recovery, a ‘U' shape a period of flat growth before the recovery and a ‘W' shape an abortive recovery.

Most people are anticipating a ‘U' shape, but it would be a brave forecaster who says where on that curve we are or how long the bottom of it will be.


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