The Dow Jones suffered another disastrous day yesterday, falling 238 points. It is now 1,575 points down on the all-time high set on October 9 last year, which means it has now fallen by 11 per cent from its peak, meaning the US market is technically in correction territory.
The index has also fallen 675 points this year and at the time of writing is just 126 points above the opening position of last year.
It was another one of those days in which bad news came along like a string of buses. More data revealed woe on the US housing market, while allegations were thrown at US mortgage giant Countrywide that it had fabricated letters from a borrower involved in a bankruptcy case.
Yet there was a funny combination of good and bad news from a survey carried out by Bloomberg among 62 economists. The survey found that the economists only seem to think there is a 40 per cent chance of a US recession this year, and yet it is saying that while experts think the US will escape recession, don’t get too relieved, because it will feel like one.
Meanwhile, in the UK, the British government brought back memories of the 1970s with its plan to tie wage rises down to a three-year plan, and also in keeping with the 1970s, unions are up in arms. But the real worry relates to a comment made by Alistair Darling, which draws into question the independence of the Bank of England.
Meanwhile, in the world of black oozy liquids and shiny metal, gold and oil both hit the headlines. Oil, because an Indian minister predicted it would hit $150 a barrel within two or three years, and gold, because it hit a new all-time high.
All this talk of recession, soaring oil and union disquiet, is so very uncivilized, so be grateful then for French President Nicolas Sarkozy, who called for a policy of “civilization” by announcing plans to launch a French version of the BBC.
