Wednesday, October 01, 2008

Sell or buy-polar disease

Am I the only one who finds the media fascination with the yo-yo-ing stock markets of the world a little tedious. I guess it stems from the fact that most people seem to think that the stock markets are some sort of economic barometer.

In reality they are as useful a guide to the national economy as the form guides in the Sporting Life are to house buying - which is to say, quite useful if you are looking for a gee-gee to put five bob each way on, but not very useful for telling you whether Newmarket is a better town than Ascot.

All it really tells us is that the money men have got the collywobbles one day followed by a resurgent bravado the next. If it reveals anything it suggests that the vast majority of traders are manic depressives who can't decide whether they are miserable or ecstatic.

The stock markets are just a glorified form of betting and like any sort of gambling, highly addictive, but it is silly to assume that they tell us anything interesting about the state of the economy. Like the local turf accountants, they are full of people who are taking a punt - some with more success than others, but ultimately they are all just guessing.

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