‘I’m worried.’ 


‘Nothing new there, then.’   


‘No, I’m really worried.’  A few years ago when I sold my house,  I invested the majority of my assets in the stock market.  Alright, so I also put some money in building societies.  I tried to spread the risk and my forays into stocks and shares were very much on the cautious side.  And for a time they did well.  But I regarded the figures rather like monopoly money.  They weren’t real.  They meant nothing. Nothing, that is, until the stock market started to tumble and newspapers started writing about recession. 


My financial adviser, large, comfortable and ever-so-calm – though the bitten fingernails are a bit of a giveaway -, said just sit tight.  ‘It’s a wobble’, he commented   with a reassuring smile that needed some dental treatment, ‘what goes down must come up again.’ 


‘But the newspapers are predicting recession.’  I said.  ‘I could lose everything.’  


He gave me the same look that Michael Fish, had, when, before the great storm of  1987, he announced to the nation, ‘And to the lady from Portsmouth who wrote to ask if it was true there was going to be a hurricane, all I can say to you is we don’t get hurricanes in England.’  


‘There won’t be a recession, Nick.  It won’t happen.’ 


But how could he be so sure?  Is there no scientific way to predict what will happen? 


Last night at The Headingly Café Scientifique,  Doug Parker from Leeds University told us about the science of weather forecasting.  It is certainly much more accurate than it used to be.  Data from 30,000 weather stations scattered throughout the world, observations from satellites and high altitude readings from hundreds of weather balloons are pooled to provide a detailed map of the weather at any moment.  So since our weather comes from the west,  knowing what is happening out in the Atlantic, the rate of movement and pattern of development, it is possible to be pretty accurate about what the weather is going to be like over the next few days.  Beyond that, things are much more variable, you’d be as well off consulting the tea leaves. 


‘But’, Dr Parker remarked, ‘one large storm could throw all of the calculations out.’   


Was this what was happening to the stock market?  One big storm had thrown it all out and so we have no idea what will happen.  If that is a valid metaphor and I don’t think it is, we would have say that storms beget bigger storms until the whole weather system collapses. 


The thing is that the stock market doesn’t really work like atmospheric physics on things you can measure.  You’d think it would be, but it doesn’t.  If it did, we could reassure ourselves with the knowledge that we haven’t run out of money or oil or gold or any one ‘thing’.   No, what we have run out of is confidence and belief. 


I was probably correct in my assumption that my assets were not real.  When there is confidence in the stock market, it trades in virtual money – pretend pounds and delusional dollars.  Banks will borrow more than they can pay back, because they are confident their creditors will continue to deposit their money with them and they know how to invest it.  Companies will use credit to buy the raw materials because their shareholders have confidence there will be a demand for their products.  Governments will borrow more than they can pay back because they believe they can persuade the electorate to part with more in taxes. Building societies can offer people 100% mortgages because they know they want an affluent life style and in a booming economy can afford the interest.  It’s an economy for Never-neverland.  It depends on belief and confidence.  It’s not  the quality that that counts; it’s what we all believe is worth it. .  


As with everything in our society,  the people we love, the illness we suffer from, the treatments we take,  the products that we buy, the food we eat, the job we do, the place we go on holiday to, it’s not what they are that’s important, it’s what they mean to us, how we believe in them.  They are all symbols of who we are or what we can be persuaded to incorporate as part of our identity. 


So, to quote Barnes;  ‘It’s not that we’ve run out of money. Rather, we’ve run out of confidence.’  It’s not just me who is worried, we are all worried and it’s affecting the market.  ‘If we just believed there was money, there would be money. If we all had confidence, the problem would no longer exist.  The solution, then, is psychological.’


Barnes, chief sportswriter of The Times, compares the economic predictions, not to weather forecasting, but the performance of the England sports teams.  He would, wouldn’t he?  But it’s a good analogy.   The English football team had no confidence in its manager during the European Cup qualifiers, and went out to Croatia.  Bring in a new manager Fabio Capello , a charismatic new manager and they beat Croatia 4-1.  This last summer, the English cricket team lost the test series to South Africa.  They had lost confidence in their captain Michael Vaughan and so had he. Enter Kevin Petersen – no doubts there, and they win not only the next test, but all the one day matches.  They are unbeatable. 


It’s all boils down to leadership. 


Gordon, it’s time to go!  We have lost confidence in you.   


Barack Obama.  Your time has come.