Stock values point to recovery

Strong gains on Wall Street and in Asia have seen the top shares open 0.7 percent higher today, which along with a 21 percent rally in the FTSE index this quarter has given signs that the global recession could be making a stronger-than-anticipated recovery.

Domestic forecasts also point to economic recovery. Philip Shaw, chief economist at Investec, said “we expect growth to return in Q3”. This comes as retailers reported a picking up of spending in the month of July. As ever, this comes with a note of caution; the Bank of England warned that it was no quick fix, and the long-term may still require pro-active intervention to bolster recovery.

In news even closer to home, Gordon Brown has been talking about cuts. It seems a point of break-even is a while away, as the government needs to borrow £2 for every seven it spends. But where to make cuts? The UK’s swollen public sector needs to retreat, but a hatchet-job certainly won’t do the trick. Though whether allowing state borrowing to rise further is a viable course of action remains to be seen. Feeding into this comes the revelation that the UK’s jobless rate now stands at 7.9 percent, or a total of 1.61 million people. There is no quick silver lining to this multi-part problem.

Escaping may be the best option, at least for now-former Barclays bankers Stephen King and Michael Keeley, who are leaving to set up C12 Capital Management in the Cayman Islands. The firm are buying $12.3bn of Barclays’ debt, which will not be removed from the bank’s balance sheet but will be treated differently – Barclays will no longer need to price its assets at current market values. It’s an obtuse set up in a climate where transparency and clarity are being promoted as the values to pursue, a move that has astonished many.

In a parallel world, traders have been using StockTwits, a Twitter-based service, to track relevant discussions on stock trends. Traders tweet their opinions which are picked up and displayed on StockTwits’ own website, making the formerly mantled compartment of finance as transparent and public as can be. There are currently 90,000 people signed up to the site, of which about 15,000 tweet. It’s easy to watch how amateur day traders operate and notice trends from the outside, and may be a valuable template to follow in this pro freedom-of-information world we’re moving rapidly into.