MARKET COMMENTARY – JUNE 2008

IT’S a funny old world. Have you ever woken up in a sweat, having dreamt that you are still at school or university doing exams? Horrible. Spare a thought then for present day students of economics. It goes something like this:

Question 1: You have 45 minutes:

• Banks have been lending money to people who cannot afford to repay them
• Banks are laying off thousands of staff but have just paid record bonuses which amount to roughly the same as the money they have lost
• We are all facing a tough year ahead
• The UK has just had the largest annual increase in employment since 1997. The number of people in employment is the highest on record at 29.5 million. The number of vacancies is at a record high and redundancies are at a record low.
• Oil is at a record high of $135 per barrel and may hit $200 this year
• The newbuilding orderbook is a record 61% of the world fleet and steel prices have doubled
• A capesize bulker was recently fixed at a rate of $303,000 per day to carry iron ore from Brazil to China.

Discuss.

I think I’d run screaming from the room. And, indeed rather than even attempt to talk our way out of this economic asylum, we shall run away to Greece for this year’s Posidonia.