Its still a mystery to me why the Footsie (news) not doing a lot better than it is. There is a feeling of summer about, with many people I speak to firmly believing that shares will take off pretty quickly.

There are the arguments against, of course. There are always two sides to the argument in the so-called science of economics. I say so-called, because if you take another science, say biology, you only say things when youre certain they are true, or at least that are likely to come true, like global warming.

But with economics, for everyone who says the slump is about to be history, there are an equal number of experts who say that its got a long way to go yet. And that we may not recover for ten or more years.

Nobody knows. And thats the answer. And whats the scientific value of an answer
like that?

Allow me to give you one good argument in favour of a share rally. There is a period at the beginning of a recession when everyone cuts down on stock to make up for falling sales and more importantly for expected falling sales.

After a while, their supplies and raw materials disappear to almost nothing and they have to restock fast. When they do this, prices rise with demand and the recession will take a knock. It wont be over, but it weakens, which helps confidence to creep back.

If this restocking is fast enough to save all the suppliers who are in trouble, the recession ma not survive much longer. And all those share prices, which fell so rapidly last September and October when the stocking stopped, will rally again.
Thats just one reason why share prices ought to be rising. There are a few others. And yet the Footsie, as I pen this, is moribund. Perhaps in a few weeks…? God bless.