S&P analysts pointed out today that over $3 trillion has been lost from global stock markets in June alone. To put that in perspective, that’s 8.18% of the total value of 52 equity indices lost in a single month.

July isn’t likely to be much better, either. Barclay’s Capital equity strategist Tim Bond is warning of a global financial shitstorm, as a result of an inflation shock. Anyone who has been reading this blog will know that that has been obvious for some time now, so its about time people like Bond began catching up. He is suggesting that US inflation will hit 5.5% by August.

“This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility,” Bond said.

In the meantime, still living in their delusion, earnings forecasts in Asian countries outside Japan are still for 11.6 percent growth over the next 12 months and 15.1 percent growth in calendar year 2009, according to Barclays Capital. Dream on.

Bond again: “[these estimates] are implicitly assuming that inflation will either miraculously disappear on its own accord or that central banks are not going to bother doing anything about it. Neither is particularly believable.”

David Owen at Dresdner Kleinwort thinks we are “staring recession in the face” in the UK. No, really?

“With house prices collapsing and manufacturing orders declining to their lowest level since 1998, can the UK avoid recession? Contrary to expectations, the saving ratio fell in Q1 from 3% to only 1.1%, the lowest figure on record. This helped keep the show on the road, but surely cannot continue, particularly with survey evidence now suggesting a marked deterioration in the labour market,” he spouted.

Another significant piece of wonderful news is that global unemployment rose by 9% in June, news which follows Eurostat’s announcement yesterday that it was revising Eurozone unemployment figures upwards for all months from December to May. The figure for May is now 7.2% and climbing.

There seems to be only one European finance minister talking any sense these days, despite thinly veiled threats from the British financial establishment. The question in my mind remains: when will the commentators and financial anal-ists catch up and realise that globalisation/free trade/fiat money/unbridled speculation/monetarism doesn’t work, and never has? (This links to details of an historical text that you should be able to access from your local library. Michigan University, in common with all members of Athens and JSTOR, does not allow the unwashed masses direct access to their online resources.)

This entry was posted on Wednesday, July 2nd, 2008 at 3:48 pm and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.