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a personal view from Erithacus
4th October 2003
Analysts blamed the early falls on sudden loss of confidence in the strength of the U.S. economy, combined with profit-taking at the end of the third quarter. Wednesday, however, saw much of the confidence returning, and despite continued nervousness which led to an uncertain day’s trading on London markets on Thursday, share prices generally followed an upward trend towards Friday’s close.
Despite the rises from midweek onwards which were led by a near 200 point rise on America’s Dow Jones Index on Wednesday, economic data from the U.S. left many analysts scratching their heads in puzzlement over where the surge in confidence was coming from. Described as "bad and worsening", figures for U.S. manufacturing, durable goods, factory orders and unemployment seem at odds with a stock market rally even though Friday’s jobs data indicated an unexpected rise in new jobs.
Although few are saying this recent rise is the return to a "bull market", many traders seem to agree that it is another indication of the new underlying strength of market sentiment which created the rapid bounce-back and which will ensure that future falls will be equally short-lived.
I am not so sure. The Nasdaq’s level at 70% higher than just one year ago strikes me as having all the makings of another bubble close to bursting point, and one which could bring the non-tech shares down with it. At the same time the economic figures from the U.S. really do show that full recovery is far from certain; many of the EU economies are not prospering the way that would be expected for solid, confident and climbing stock markets; the battle against terrorism has hardly started, let alone been won, and there remains a very real possibility of "attacks on capitalism" which will send the stock markets tumbling again; both here and in the U.S. governments face extensive criticism over their reasons for attacking Iraq, which is not going to disappear in a hurry; consumer borrowing here is undoubtedly at a dangerous level, and it would not take very much to tip confidence over the edge into panic. Quite apart from anything else, the last few days’ rises in the stock markets must surely have resulted, at least in part, from fund managers adjusting their portfolios for the new quarter rather than from any real return of general confidence.
In short, although there is no definite reason for stock markets to fall once again, I think there are too many potentially damaging factors still around to be able to be completely confident.
Not all experts, perhaps, but certainly a very substantial number of them.
I do not pretend to know more than they do, I just have what was a sneaking suspicion and has now become a palpable certainty that all too often the expert opinions jumped on by the media are plainly and simply wrong.
Experts have told us it is dangerous to eat eggs; then told us it is not dangerous.
Experts have told us we should eat more salt; then told us we should eat less; then told us we should eat more.
Experts have told us our future lies in genetic engineering; then told us it could destroy us.
Experts told us in the 1970s that world coal, oil and gas would run out before the year 2000.
And so on. And so on. And so on.
Writers (like me), and particularly journalists, have frequently been attacked for expressing an opinion any subject which they "know nothing about".
Experts will, and do, get it wrong from time to time as I and the thousands of other writers get it wrong, but woe betide anyone who tells them they are wrong. After all, they are experts.
"Experts are stupid. Experts are corrupt."
A terrible allegation. Should it be taken seriously?
Of course not. Although...
Who pays for the experts’ research? If you were paying, would you use experts who previously have come up with results that were not in your interests, or whose findings did not merit even a single line in the centre pages of a local newspaper?
Or would you use the experts whose findings had made headline news; whose findings had changed government policies; whose findings had altered the way much of the world acts and behaves?
Some years ago there was a drought in the UK, a serious water shortage which saw standpipes and water tankers in the streets in some areas and severe restrictions on the use of water.
"This is the result of global warming," said the experts. "This is the sort of weather we can expect. We will always be short of water in the future."
The next two years saw remarkably heavy rain, with severe flooding in many areas.
"This is the result of global warming, " said the experts. "We can now expect more extremes of weather."
And about fifty years ago some experts announced that weather in the UK (and, indeed, in the world generally) tends to go in cycles of around 400 years, with warming, cooling, extremes of wind, rain and snow all happening from time to time. Meteorological data does not go back 400 years, so I suppose we will never know for sure. That must have been one hell of a storm in 1287 that caused Hastings cliffs to collapse into the sea taking half of the castle with it and also altered the shoreline of much of southern England.......and the description of the typhoons that struck China in 1639 seems equally impressive, although it has to be admitted that experts writing in the Zhenhai County Gazette at the time, now in the Beijing library archives, do blame this particular catastrophe on "a mischievous dragon".
Experts, it seems, will often ignore facts in favour of opinion, particularly when those facts do not happen to fit in with whatever it is they are trying to prove. A recent report on global warming devotes some fifty pages to rising sea levels and their effect on the east of England, making no mention of the well documented geological fact that Britain is slowly tilting and much of the "rising sea level" they predict will in fact be the result of the land to the east becoming lower rather than the sea becoming higher.
Similarly, staying with global warming for the moment, when I see no mention of natural balancing effects in extensive reports by experts who tell me I should stop using my car because of the carbon dioxide it pours into the atmosphere, I have to wonder whether they are telling me the whole truth. Surely, I ask myself, do the plants and trees not thrive on slightly warmer conditions and air which is becoming slightly richer in carbon dioxide? Surely, if I remember my school biology lessons correctly, do the plants not then grow faster, greener and more actively? And surely do those plants and trees not then lock the carbon into their own growth and pump clean, cooling oxygen back into the atmosphere?
There may be a million and one reasons why this is not happening, or is not happening quickly enough to stand a chance of reversing the global warming we are warned about. But why have none of the widely published reports even mentioned it? Has no-one suggested we should be concentrating on encouraging plant growth to reverse the artificial changes we may be making to our planet with our unlocking of gases from the fossil fuels we use?
Or perhaps they have, but no-one took too much notice of it.
Is the question "Which experts do we believe?" or "Do we believe the experts at all?"
Should we ask "Why should I believe you?" or "When should I believe you?"
Are we critical of our governments because they followed the experts’ advice, or because they failed to follow it?
Worse still, are we listening only to the experts who have the "ear" of the writers and journalists?
So should I give up smoking and take up drinking because red wine will lengthen my life but the cigarettes will give me cancer as well as heart and blood vessel problems? Or do I carry on as I am because the cigarettes will lessen the risk of Alzheimer’s Disease and the red wine will increase it?
Do I run another Marathon because the exercise will be good for my heart, or do I stop running because my knees and hips will be more likely to need major surgery in later life?
Shall I.........? So many questions. So many different answers. And if I wait a few years I have absolutely no doubt that at least half of the answers will be completely different.
I hate experts.
4th October 2003
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