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City chief: green shoots are here
Jim Armitage25.03.09
ONE of the City's most respected economists tonight declared the global recession was coming to an end.
Larry Kantor made his assertion in an upbeat research document entitled: Global outlook - Green shoots have arrived.
The chief economist at investment banking giant Barclays Capital told his company's clients that the world economy was about to turn and advised them to "become more aggressive" and start buying shares again.
His 85-page report argues that factories which stopped or slowed their production lines have now run down their stockpiles of goods to such an extent that they will soon inevitably have to start gearing up again to meet demand.
That will trigger a dramatic jump in the world's economy or, in his words "a massive inventory correction".
The FTSE has jumped more than five per cent since US banking giant Citigroup said on 10 March that it was finally making a profit again. But few serious economists have so far been prepared to state in such bold terms that this is the beginning of the end of the crisis.
Acknowledging there had been previous rallies that had been followed by big crashes Mr Kantor said: "We believe that the latest rally will have stronger legs."
Mr Kantor argued: "The global recession is starting to bottom out and, although the turn could take some time, the economic news will go from all bad to somewhat mixed to better over the next three months."
His bullish view became the talk of dealing rooms in London and New York.
Philip Shaw of Investec Bank in London said: "This is extraordinarily confident stuff. We have to be extremely careful. There is still that risk that something can still go badly wrong."
Other economists pointed out that the data continued to be relentlessly bad.
Today the CBI reported a horrendous fall in sales from shops this month.
Reader views (24)
To make announcements like this smacks of arrogance to the poor people who have lost their jobs, their homes, their sanity. Complete nonsense.
- Wallytrader, London
It's interesting that a few countries have banks that are not in trouble (Australia, Canada, New Zealand, and others) although their economies are in recession due to a downturn in world trade. These three English-speaking countries never saw banking as a primary industry but insisted their farmers and manufacturers, the real creators of wealth, produce without subsidies. The British taxpayer has been propping up the loony-tunes Thatcherite economic thinking adopted by Blair and Brown for many years: all the pigeons are now coming home to roost. Off-book spending by Brown through PFIs are nothing short of dishonest: most PFIs will crash soon as the private sector finds them unprofitable and will walk away from them. This will add hugely to the taxpayers burden.
Spending beyond one's means is okay on a short-term project that will soon produce a return, but to keep on spending beyond one's means with no hope of a return, ever, is madness.
As an example of loony-tunes economic theory, I wonder how many Britons know how much of their weekly budget goes to prop up hopelessly inefficient farming practices, such as the subsidy paid to farmers to NOT spray weeds in their pastures to ensure the survival of wildflowers?
Blair, Brown and those who think that one can have something for nothing are either deluded or conmen.
Next time you buy a bottle of wine or leg of lamb or a nice thick steak from Aus or NZ, ponder on the fact that there is not one penny of subsidy in them.
- Kiwi Expat, London, UK
This wishful thinking sounds a bit like that other Cantor - Eddie, he was a Captain of comedy and rolled his large eyes. Maybe Larry has been listening to the hits from his 1930's show entitled "Whoopee"?
- Robert El-Cid., Hull, East Yorks.,
Without the scaremongering in the press, most of wouldn't even have noticed this so-called recession.
- Martin H. Watson, Teddington
Andrew W1, there's a relatively fine - but important - line between positivity and realism.
- Marianne, SW France
More spin from a Mandelson accolyte.
Needless to say it's absolute tosh and was released to try and cover up all the bad news about Brown today. Unfortunately it's not worked as we are wising up to the propoganda tricks this inept govt play on us.
- Margy, London
Once upon a time there were three wizards: Freddie the Shreddie, Darling the Dopie and Brownie the Wannabe PMee. All were knighted for their services to themselves and Mervin the King was locked up in the treasury.
- Frederick, London
Let us hope that these green shoots are not weeds which may choke the life out of the economy.
- Ronald Whitten, chesterfield derbyshire
Green shoots, eh? It's actually the mould on the decaying corpse of Brown's economic record. Go now, loser Brown, give the country a chance to salvage something from this basket-case economy you have delivered us.
- Johnny, Beijing China
Most of the contributors here seem to want to talk the economy down and make this Recession worse than it needs to be.
Many people are sick and tired of people trying to score political points through negativity. We should all be concentrating our efforts in tryingb to drag this country back out of the Recession.
It is about time we had some positive reporting to replace the doom and gloom that is prevelant at the moment.
Well done Evening Standard for putting good news first. Keep up the good work and start building up people's confidence.
- Andrew, London W1
The Banks are turning around because we have bailed them out by paying of their toxic debts.
The 'ankers might be fine; Meanwhile back in the bat cave, people are homeless, businesses closed and the country is broke.
Cheers Gordy, make sure you keep the planet spinning now, you hear?!
- Frank, Home Counties, England.
Get back in the market by all means but be sure to watch it like a hawk or youll be sat holding the duck that cant lay an egg ..... and of course the fund managers and economists will be no-where to be seen .....
- Simon, Barcelona,Spain
Long, long way to go yet - I cant believe he has the guts to talk such rot.
- Mark Russell, Limoges, France
Well donw Gordon Brown. The recovery is down to your leadership
- Keith Price, Luton, England
Another economist being 'encouraged' to be optimistic. The fund managers and their economist cronies must somehow persuade the retail investor to get in and reduce the fund managers losses. Their is no honour in this market. If you want to fall for it good luck to you.
- M Grelton, London
Larry is not like other economists. He forecast a 3% growth in the US economy in the second half of 2008. The US has a way to go to catch up with that!
- Maxmentor, Gerarrds Cross
Brown and King's disagreement will soon put an end to any possible green shoots.
Recovery can be talked up as well as it can be talked down.
I really think that this Country has had enough.
We must tell Darling MR Bean that we are truly Browned off, before ruin our lives
- Bernard Parke, GUILDFORD
Talk about looking at the world through rose coloured glasses. the recession started very recently. I think there is a long way to go yet. I doubt that many people feel the same way as Kantor
- Graham, Ilford Essex
Would this be one of the same city "experts" who on Monday predicted deflation, when the next day the statistics showed that we are still suffering inflation?
I don't think it's time to trust anything that bankers say, just yet.
- Nobby Clark, Perth, Scotland
I would like to be as happy as Larry so will he tell us the medication he's on ?
- Doug Watt, london e14
flying pigs and pink elephants.
wouldn't it be nice if true, but i fear it is just trying to talk up recovery, much like the halifax a few months ago when they said house prices had stabilised.
why would a man believe anything said by the 'expert economists' who totally failed to warn that the walls of the fools paradise were about to come tumbling down.
- M.O'Brien, london.uk
errr, does that mean i don't have to jump off a tall building now?
- Still Confused, london
Isn't he the same kind of extortionately paid 'expert' who was telling us 2 years ago that there was nothing to worry about?
- Anthony, London
Another fool, get rid of him.
- John Smith, London , England
