A year ago, Ben Bernanke (head of the US Federal Reserve), startled financial markets with his claim that “green shoots” of recovery were now visible. This helped to lead to a major stock market rally, based on the sentiment that the US and other western economies would quickly bounce back to 2003-7 growth levels.
Observers such as Nouriel Roubini suggested that Mr Bernanke was confusing signs of restocking with real recovery. Sadly, as the chemical company Outlook comments show, Roubini has been proved right.
The new IeC Boom/Gloom Index above shows that sightings of ‘green shoots’ (green line) in the Financial Times have reduced to almost zero. In turn, the Boom/Gloom Index itself (blue column) remains below its highs of Q2 last year, and well below its highs prior to the Crisis in 2008.